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Policy & Regulation
Thursday, January 17, 2019
Do not extend deadline for implementing new FDI policy for e-commerce sector: CAIT

Do not extend deadline for implementing new FDI policy for e-commerce sector: CAITTraders’ body CAIT on Sunday urged the Commerce and Industry Ministry not to allow private labels to be sold on e-commerce marketplaces and desist from extending the February 1 deadline for implementation of the changes to FDI policy for the e-commerce sector.

In a letter to the Secretary in the Department of Industrial Policy and Promotion (DIPP) Ramesh Abhishek, the Confederation of All India Traders (CAIT) requested him to make it explicitly clear whether private labelling or branding is allowed under the foreign direct investment (FDI) policy in the e-commerce sector.

“It is submitted that if it (labelling) is allowed it will run contrary to the intention of the government to make e-commerce free from evils and malpractice and to provide an equal level playing field with fair competition. Such e-commerce companies will continue their ulterior motives through such loopholes as they are doing since last many years and small retailers will be killed,” CAIT alleged.

The government, earlier, had clarified that private labels were not banned from being sold on e-commerce marketplaces. One of the big players, however, stated that private labels are a small component of the business and that the government needs to address the larger issues at hand.

Private labels, often sold at lower prices, allow e-commerce companies to control quality and even offers better margins than big, established brands. Over the last few years, e-commerce players have introduced private labels across a variety of categories including apparel, home furnishing and grocery.

Large e-commerce marketplaces could approach the government seeking extension of the February 1 deadline as compliance with the recent changes would require at least 4-5 months at operational level, multiple sources said earlier.

However, in the letter to the DIPP Secretary, CAIT said it will strongly oppose any such extension. “The modus operandi of these e-commerce companies for seeking extension is to keep delaying fair execution of the policy and they may continue with their sinister designs of operating all kinds of malpractices,” it said. “Therefore, it is strongly submitted not to fall prey under malicious agenda of such e-commerce companies and no extension should be allowed under any circumstances,” the traders’ body claimed.

New rules
The government’s move to tighten norms has hit Amazon and Flipkart the hardest as the new regulations bar online marketplaces with foreign investment to sell products of companies where they hold stakes as well as ban exclusive marketing arrangements.

Another provision states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 per cent of the vendor’s purchases are from the marketplace entity, including the latter’s wholesale unit.

The move is aimed at ensuring that the marketplace entity or its related companies cannot control inventory under the FDI rules. (The Hindubusiness Line)

DoT’s request for formula irks Trai

DoT’s request for formula irks Trai The telecom regulator is peeved at a request of the Department of Telecommunications (DoT) to explain the calculations that the watchdog has used to arrive at the starting price it has recommended for auctioning 4G and 5G airwaves. Senior officials at the Telecom Regulatory Authority of India (Trai) said DoT had exceeded its brief as per rules.

“Look at it from the legal point.
The Trai Act says the government will seek recommendations from the regulator, then if the government disagrees with the regulation, they would write back to the regulator, asking it to reconsider,” said an official.

“Now, the regulator can disagree or agree with the government. Then the government can decide whether they agree or they disagree with the regulator.

So, where does the question of ‘give us the rationale’ for our methodology or calculations come in,” the official said.

Another official said the entire mode of communication between Trai and DoT has been laid down in the Trai Act. “The relationship should be as clear as defined as under the Act”.

The internal Trai views come in the backdrop of a request from DoT, which seemed to raise doubts over the calculation of the reserve price of the airwaves, an exercise routinely undertaken by the telecom regulator.

While the top two telecom companies, Bharti AirtelNSE 0.79 % and Vodafone Idea, have called the proposed base auction prices high, Reliance JioInfocomm has backed the prices and said it was willing to buy airwaves at the earliest.

Explaining why the regulatory authority was stung by the department’s communication, the second official said: “It feels like the examiner has said, now you have submitted your answer sheet but we would also like to see the rough work behind the computation.

Excel sheets and working sheets accuracy needn’t be checked by the department.”

The official said Trai had submitted a 160-page recommendation, which had everything.

Amid this back and forth between DoT and the regulator, Trai has decided to start a consultation process to change the methodology to compute the starting price of bandwidth.

It proposes to take a lot more factors into consideration while calculating the price, including health of the industry.

The idea is to find ways to lower the base price at which bids will be sought in future auctions, moving away from its usual practice of mechanically hiking the starting price in every successive sale. Trai’s current methodology has resulted in the spectrum prices in India being among the highest in the world.

DoT has also discounted Trai’s views that there shouldn’t be any delay in auctioning the available spectrum, as it pushed back the auctions for multiple bands of 4G and 5G airwaves to the second half of 2019 — this means, the auction would happen almost a year after the regulator gave its recommendation.

The first official said the government must auction airwaves and not make the outcome of the auctions a matter of prestige. (Economic Times)

Government notifies rules for in-flight, maritime mobile phone services

Government notifies rules for in-flight, maritime mobile phone servicesIndian and foreign airlines and shipping companies operating in the country can provide in-flight and maritime voice and data services in partnership with a valid Indian telecom licence holder. People will soon be able to make calls and access internet through their phones during air travel and ship voyage within Indian territory as the government has notified rules for providing such services. Indian and foreign airlines and shipping companies operating in the country can provide in-flight and maritime voice and data services in partnership with a valid Indian telecom licence holder.

"These rules may be called the Flight and Maritime Connectivity Rules, 2018. They shall come into force on the date of their publication in the Official Gazette," the notification dated December 14 said.

The in-flight and maritime connectivity (IFMC) can be provided using telecom networks on ground as well as using satellites.

The services can be provided by a valid telecom licence holder in India through domestic and foreign satellites having permission of the Department of Space, it said.

"In case of using satellite system for providing IFMC, the telegraph message shall be passed through the satellite gateway earth station located within India...and such satellite gateway earth stations shall be interconnected with the NLD (national long distance) or access service or ISP licensee's network for further delivery of service," the notification said.

The IFMC services will be activated once the aircraft attains a minimum height of 3,000 metres in Indian airspace to avoid interference with terrestrial mobile networks.

The IFMC licences will be granted against annual fee of Re 1 for a period of 10 years and the permit holder will have to pay licence fees and spectrum charges based on revenue earned from providing services. (Source: ETtelecom)

Govt to launch broadband readiness index of states: Telecom Secretary

Govt to launch broadband readiness index of states: Telecom Secretary Telecom Secretary Aruna Sundararajan said the Ministry of Electronics and IT has also shown interest in states readiness index and want to expand it further The government is planning to launch broadband services readiness index of states based on parameters like infrastructure, approval processes and utilisation of high speed Internet, a top telecom department official said Sunday. “According to a study by ICRIER (a research firm), $ 100 billion investment will have seven-fold multiplier effect on GDP. There is a need of a national mission to make this happen. We are going to launch broadband readiness index for states which will be vital for investments,” Telecom Secretary Aruna Sundararajan told PTI. She said the Ministry of Electronics and IT has also shown interest in states readiness index and want to expand it further.

The telecom ministry will hold first workshop on implementation of the National Digital Communications Policy (NDCP) which envisages $100 billion investment in telecom sector by 2022, broadband connectivity at 50 megabit per second speed to every citizen, telecom connectivity at every corner of India and creating 40 lakh jobs.

“This is first preparatory national workshop on implementation of NDCP in which 25 states have confirmed to participate. Here we will launch National Broadband Mission to achieve objective of broadband for all,” Sundararajan said.

Industry leaders and associations will discuss at the NDCP workshop issues they are facing in states especially in rolling out telecom infrastructure which in turn impact investments. “We want to ensure that 5G is not limited to urban areas. It should reach rural areas. For this, we have to work with states to ensure that there is 100 per cent penetration of optical fibre cables. Without massive OFC penetration, 5G services will not expand. States have to provide smooth right of way permissions,” Sundararajan said.

5G networks are said to provide broadband speed of 1 Gbps. theoretically, a high definition 2-hour video can be downloaded in 5 seconds at this speed. The telecom secretary said there is a need to increase mobile tower base by three times and OFC rollout by four-folds to achieve ‘broadband for all’ target under the National Broadband Mission.

“We have to roll out wifi services in rural and urban areas. To deliver benefit of NDCP to people and create jobs, states have to come forward. We will do comparative evaluation of all states and highlight best policies for other states to adopt it,” Sundararajan said. The telecom ministry has floated tender to roll out 10 lakh wifi hotspot across all 2.5 lakh village panchayats. At present, 1.21 lakh panchayats are ready with broadband services infrastructure. The DoT has awarded task to roll out wifi services in 62, 0000 panchayats to Telecommunications Consultants India Limited (TCIL) and is working with ITI for setting up wifi hotpsots in other panchayats.

“Broadband services have been started in all panchayats covered under Phase 1. Now we are looking at utilisation of broadband where states need to come forward and identify institutions like school, police stations etc that are to be connected with wifi,” Sundararajan said.

She said states have to ensure that there is enough electronic equipment available at their institutions to start using BharatNet broadband network for various services like tele-medicine, e-health, e-education etc. “DoT is working to create state-of-the-art telecom infrastructure in next four years and we want states to draw a road map to start using it. At the workshop, we will work on yearly targets that states need to achieve,” Sundararajan said.

She said the telecom ministry will discuss with states usage of broadband for development at aspirational districts, enhancing connectivity in Naxal-affected areas, north eastern states and islands. (Source: Mint)

NASSCOM raises concerns over US govt’s H-1B visa proposal

NASSCOM raises concerns over US govt’s H-1B visa proposalNasscom has raised concerns over the US government’s latest proposal that will require H-1B visa-seeking firms to electronically register their petitions in advance, saying this will lead to “uncertainties” and could put US jobs at risk. The IT industry body, in a statement, said it will carefully review the 139-page proposal and evaluate its implications for US companies and the economy, and then submit comments.

The Trump administration on Friday proposed major changes to the H-1B application process, aimed at awarding the popular American work visa to the most skilled and highest paid foreign workers.

“There is not much time between now and when the next H-1B lottery season opens in April. Companies have already begun assessing their needs and planning their submissions for next year, so we are concerned about the uncertainties that could arise as the government seeks to implement another major change in the H-1B process during that timeframe,” Nasscom said in a statement.

It added that it will review the proposal before submitting comments and “take other actions as appropriate to best ensure that the process makes sense, is fair, and does no harm.”

The US Department of Homeland Security said public comments on the proposed rule may be submitted starting December 3, when the proposed rule is published in the US Federal Register, and must be received on or before January 2.

“To the extent US policy makes it more difficult and costlier for global IT service companies to provide their expertise in the US, it will weaken the US companies that depend on them to help fill their skills gaps. Contrary to what is intended, this action could put US jobs at risk and create pressure to send more IT work abroad, rather than performing it in the US,” NASSCOM pointed out.

Under the new rule, the US Citizenship and Immigration Services (USCIS) would also reverse the order by which it selects H-1B petitions under the H-1B cap and the advanced degree exemption. (Source: The Hindu BusinessLine)

Telecom department eyes reverse auction to meet fiscal needs

Telecom department eyes reverse auction to meet fiscal needsThe Department of Telecommunications (DoT) is considering a reverse auction model to ensure that the government is able to raise timely money from sale of bandwidth for meeting fiscal needs without further adding to the financial stress of mobile phone operators. “The industry is divided; some operators want airwaves at current price, rest want it either at a reduced price or don’t want an auction right now,” a senior DoT official told ET.

“Under the reverse auction model, one could put up all bands for auctions. The bandwidth which doesn’t elicit any response will automatically see a cut, say of 10% in the reserve price. This can once again be repeated till we hit a floor cap, say of 25% below the reserve price, after which we pull the particular bandwidth out of the auction and continue to sell the rest,” the official added.

As reported earlier by ET, new entrant Reliance Jio Infocomm has backed an auction of both 4G and 5G airwaves in the current fiscal year at the prices recommended by the sector regulator, Telecom Regulatory Authority of India. Second largest telco Bharti AirtelNSE -1.46 %, however, is keen on a sale of only 4G airwaves in the current fiscal year and has sought a reduction in the price of sub 1GH bands.

Market leader Vodafone Idea doesn’t want auctions till 2020. Its chairman, Kumar Mangalam Birla, has recently told top finance and telecom ministry officials that the severe liquidity crunch it was facing may force the telco to default on a Rs 900 crore spectrum-related charge it must pay the government in March.

This has nudged the government to consider some relief measures for the sector at large, with telecom and finance ministry officials having discussed Birla’s proposals that the period of payment for spectrum purchases be increased to 18 years from the current 16, extending the two-year moratorium to three, besides spreading the payment of Vodafone Idea’s Rs 900 crore into 12 instalments.

Birla also flagged high levies in the telecom sector — nearly a third of a telco’s revenue goes to the government in the form of different levies — and the recent hike in import duty of telecom equipment apart from the Rs 30,000 crore that is locked up on account of GST payment under the 'reverse charge mechanism'.

“The way out of such a problem is to not only ease the stress on the sector but to also ensure it grows which will help to revive the sector faster. Thus, the auctions must be designed keeping these points in mind,” the senior official said. Further, DoT feels that auctions should be made an annual event, with the government putting up for sale whatever bandwidth it has.

“See, all players want different things, we want to ensure that we sell bandwidth on time and of course at prices which are not exorbitant for the sector, and that is why we are now considering the reverse auction model,” the official said, adding that the petroleum ministry is currently following the model.

“This way, we don’t lose value of the precious spectrum lying with us and whosoever wishes to buy or needs more bandwidth can buy. If any bandwidth fails to generate demand after it hits the floor price also, then we put it up for auction next year,” the official added. (Source: Economic Times)

Trai to meet CEOs of telecom, broadcasting firms in December

Trai to meet CEOs of telecom, broadcasting firms in December Telecom regulator has called a meeting of chief executive officers of telecom and broadcasting firms next month in order to set the agenda for the upcoming year. The plan is to understand the issues plaguing the sectors and accordingly come up with consultation papers to frame new policies or revise the existing ones, a senior official from Telecom Regulatory Authority of India (Trai) told DNA Money.

While the meeting with chiefs of telecom companies is expected to happen on December 4, the regulator is likely to hold talks with heads of broadcasting firms on December 7, sources said.

The main agenda of the meetings would be to gauge the situations impacting these sectors, see what could be done further to improve ease doing of business and discuss other existing policies that need a relook.

For telecom, the government is likely to go for an auction of 5G spectrum next year. While it is learnt that Reliance Jio is in favour of an auction, other telecom firms are unwilling because of the financial stress. The Department of Telecommunications is likely to ask Trai to reconsider the spectrum prices suggested in its recommendations.

In broadcasting, there has been a shift in the entire framework of the TV industry after the Supreme Court upheld the Trai's tariff order and interconnect regulations for pricing and packaging of TV channels.

• The meeting with telecom chiefs is likely on December 4. Trai may meet broadcasting CEOs on December 7

• The plan is to understand the issues plaguing the sectors and come up with consultation papers (Source: Mint)

Data & cyber security may come under Trai, Telecom Commission

Data & cyber security may come under Trai, Telecom Commission The remits of the telecom regulator and the Telecom Commission are in the process of being widened that may see them overseeing issues such as data privacy, security and cybercrime, which are currently being looked into by the IT ministry, people familiar with the matter said. According to officials in the Department of Telecommunications and the Telecom Regulatory Authority of India (Trai), these changes, which will come through an amendment in laws, underline the fact that consumers access most of their data via mobile phones, and hence the telecom department will need to get involved.

“We have to realise that subjects such as data privacy and security all flow through the telecom network. In fact, 93% of all such data is consumed on telecom networks, for example ecommerce, etc,” said a senior government official, who did not want to be named.

“Aspects of data privacy etc should all come under one ambit, and that should be the Digital Commission and the Digital Communications Regulator,” the official said.

Any change in the regulatory ambit of one of the two institutions — the Telecom Regulatory Authority of India (TRAI) or the TC — needs to be complemented by a similar widening of the scope of the other. This, since all of the regulator’s recommendations need to be cleared by the Telecom Commission (TC).

Recently, the cabinet approved renaming the Telecom Commission to the Digital Communications Commission (DCC) while industry watchdog Trai became Digital Communications Regulatory Authority of India. “These cannot be just name changes. One needs to keep in mind that this will be the policy of the government, not of any ministry. Some changes need to be made in the remit of the Digital Commission and the Trai Act as well. It’s a work in progress,” said another senior official of the telecom ministry. Currently, the TC—an inter-ministerial body, which is the highest decision-making authority of the DoT—is headed by the telecom secretary.

The full-time members of the commission are member (finance), member (production), member (services) and member (technology). Part-time members of the TC are CEO of NitiAayog, secretary (Department of Economic Affairs),

Secretary, ministry of electronics and information technology (MeitY) and secretary (Department of Industrial Policy & Promotion). The TC was set up via a government resolution in 1989. Trai, on the other hand, is governed by the Trai Act of 1997.

An inter-ministerial team was formed three months ago which is working on ways in which many aspects related to data privacy and data security are moved under telecom, said another DoT official. The official added that the team of experts includes officials of MeitY and the ministry of information and broadcasting (I&B).

“We have instructions from the top officials in the government to see how all privacy and datarelated issues can be seamlessly looked into under the governance of TC,” the official said.

A senior Trai official also confirmed that meetings are on and this would also lead to additional responsibility for the sector regulator, which currently regulates all matters related just to the sector, with consumer interests at the heart of its actions. “The jurisdiction of TC will increase keeping cybercrime in mind. It is still in the planning stage but talks are on to ensure that all the work that is done by DoT in dealing with data safety is put forward,” said another official aware of the developments.

The government plans to table the draft personal data protection bill submitted by Justice BN Srikrishna Committee in Parliament by December after holding consultations with different ministries, industry representatives and the public.

The bill, submitted to the IT ministry, recommends a layered consent architecture and bringing in key principles of personal data processing, whereby companies should collect only the required data from an individual, state the purpose of its use explicitly, and store it only for as long as it is required.

As per the draft bill, citizens and internet users will have the final say on how and for what purpose personal data can be used, and they will also have the right to withdraw consent.

The Trai, on its own, in mid-July had released its recommendations on the subject titled ‘Privacy, Security and Ownership of Data in the Telecom Sector’, which are applicable for apps, browsers, operating systems and handset makers.

DoT limits subscriber enrolment during network test to 5%; trial phase to 180 days

DoT limits subscriber enrolment during network test to 5%; trial phase to 180 days The telecom department has restricted enrolment of test subscribers on network of a new mobile operator to 5 per cent of its network capacity during trial phase and testing period to maximum six months. "The number of test subscribers that can be enrolled by a licensee in licensed service area (LSA or telecom circle) shall be limited to 5 per cent of its installed network capacity for that LSA," the department said in its order.

The order has come in to effect from October 9.

The telecom operator will need to submit details of network capacity to the Department of Telecom (DoT) and Telecom Regulatory Authority of India at least 15 days before commencing enrolment of test subscribers.

The guidelines come following issue of continuous enrolment of test subscribers when Reliance Jio started its network test. Rivals of Jio approached the DoT and the telecom regulator to act against the practice, alleging that Jio is on-boarding customers by masquerading them as test subscribers.

MukeshAmbani led Jio started testing of 4G network with its employees first in late 2015 and gradually opened it for all customers without announcing final date for commercial launch of its 4G service. The company had enrolled around 15 lakh customers before commercially starting its service on September 5, 2016.

The DoT order restricts network test to 90 days and on case-to-case basis the test phase can extended to 180 days.

"There shall be limit of 90 days on the test phase involving test subscribers. However, if the TSP fails to conclude network testing due to valid reasons, it may make representations to DoT seeking additional time for network testing giving detailed justification...the total time period for network testing provided to the TSP shall not exceed 180 days," the order said.

During the test phase, the subscriber on the network will not be able to avail mobile number portability service.

The order bars telecom operator testing network from charging any fee from subscribers and the company will also need to share likely date of commercial launch of service before starting the process, according to the order. (Source: Economic Times)

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