The Insolvency and Bankruptcy Code (IBC) fee waiver provision in the Telecom Bill was removed. In view of the objections of the ministries of Finance, Corporate Affairs and Commerce and Industry, the Department of Telecommunications (DoT) has removed the provision for insolvency of telecom operators and payment of license fee from the draft Telecom Bill. It has been decided to remove the provisions related to defaults. The ministries had said that the Department of Telecommunications (DoT) cannot make laws on subjects which do not fall entirely within its jurisdiction and impact on the government’s revenue. A provision in the draft stated that in the event of insolvency proceedings against a telecom service provider, the company will have to pay the dues to the government, otherwise the spectrum will be taken back from the company. This is in accordance with this policy of the Department of Telecommunications (DoT). The reason is that the bankruptcy resolution of Aircel and Reliance Communications is stuck in litigation since 2018.
Putting this into law has raised objections from the ministries of finance, corporate affairs and commerce and industry. The contention of the Department of Telecommunications (DoT) is that once a company defaults in spectrum payments, the default will be charged to the government as per the license agreement. The right to take back spectrum from the company. Spectrum is not the property of the defaulting company, but a leased asset. However, spectrum is also key to the functioning of a telecom service firm and if it is snatched away, Neither process can proceed. The second issue on which objections were raised, following which the Department of Telecommunications (DoT) decided to remove the provision from the Bill, is related to providing relief measures to telecom companies. In September 2021, the Department of Telecommunications ( DoT) had offered moratorium to telecom companies, under which they deferred the payment of their adjusted gross revenue dues for four years. On the same lines, the Department of Telecommunications (DoT) had made a provision that in future also if the service provider If the government is under financial stress, it will have the power to give a relief package in terms of making delayed payments, waiving off penalties and interest charges. However, objections were raised by the Finance Ministry that such measures affect the government’s revenue. Therefore, such cases should be examined on a case-by-case basis and any relief granted should be based on inter-ministerial consultation and Cabinet approval rather than a blanket legal provision. The Department of Telecommunications (DoT) later clarified That the department will only consider regulation of communication apps. The Ministry of Electronics and Information Technology (MeitY) has also recently objected that such apps fall under its domain.
Department of Telecommunications
- Department of Telecommunications is a department of the Ministry of Communications, Government of India.
- Telecommunication infrastructure has been considered an important factor for achieving India’s socio-economic objectives.
- The Department of Telecommunications is formulating development policies for the rapid growth of telecom services.
- This department is also responsible for granting licenses to various telecommunication services like Unified Access Service, Internet and VSAT service.
- Performs the responsibility of frequency management in the field of radio communication by establishing close coordination with international bodies.
- The department also monitors and enforces regulatory measures for wireless transmission to all users in the country.