The Telecommunication Act debate
Mushfique Wadud talks to different stakeholders in the telecommunication sector about their concerns over the proposed amendments to the Telecommunication Act
The recent amendment proposal for the Telecommunication Act 2001 has sparked a debate between the mobile telephone operators and the government. The government justified the proposal for amendment citing the need to prevent illegal voice over internet protocol (VoIP) as well as to put a check on mobile crimes. Meanwhile, mobile operators believe that some of the provisions in the proposed amendment are unfavourable to their business and may hinder future investment.
Nonetheless, on June 13, the Bangladesh Telecommunication (Amendment) Bill, 2010, was placed before the Parliament.
According to a newspaper report, the Post and Telecommunications Minister Raziuddin Ahmed Razu, defending the proposed changes, said that the amendments were required to 'legalise' VoIP (phone calls via internet) business and issue call termination operator licences to generate employment.
'If the Bill is passed, it would help curb illegal use of telecom technology and increase revenue incomes,' he is quoted as saying by the newspaper.
Mobile, Public Switched Telecom Network (PSTN) and other operators through their organisation, the Association of Mobile Operators of Bangladesh (AMTOB) reasserted their qualms over the proposed amendment, highlighting some of the provisions as not being investment friendly while urging the government to review those provisions.
According to them, the proposed amendments will create an air of uncertainty over investments, which could potentially render poor performances in terms of mobile penetration in the country.
According to a New Age report, the Association of PSTN, Internet Service Providers Association Bangladesh and the BTRC, in separate letters to the parliamentary committee, also expressed the concern that the government's proposals, if incorporated in to the law, would hamper further investment in the growing telecom industry, which drew approximately Tk 32,000 crore in the last decade.
'When one wants to amend any law, there must be some problems with the existing law. I have been working in this sector for 13 or 14 years but I am yet to identify a problem in the existing law that requires amendment,' says Barrister Tanjib-ul Alam.
'The amendment proposals show a lack of foresight or any consideration for the future of the sector. When someone plans on investing in a sector, he or she seeks a level of certainty in the sector for it to provide returns on the investment. But the provisions in the amendment leave no space for that certainty. For example, if any operator violates a condition, he or she may be fined a maximum of Tk 300 crore,' he adds.
'The amendment will inculcate greater risks into the sector,' says Ashraful Haq Chowdhury, secretary of Association of Mobile Operators of Bangladesh (AMTOB).
'Investors always want safety and security. When there is a provision of imprisonment without any appeal, there is always a possibility that it will be misused. In this case, people will not come to invest and at the same time, few would want to be employed in this sector,' he adds.
'The telecommunication sector has vast potential. It is possible to bring huge investments into this sector. However, in the last two years, apart from Air Tel, no one has shown much willingness to invest here. If such a tough law is enacted, the investment situation will be even worse,' he further says.
'We have been warning about the amendments not being investment-friendly from the very beginning,' says Mahmud Hossain, head of corporate affairs at Grameenphone. 'In the amendment, there is no provision for appeal if an operator is accused of a breach. We hope that in a democratic society, there will be a provision to allow for an appeal,' he adds.
In 2001, the Telecommunication Act was first formulated. Subsequently, the Bangladesh Telecommunication Regulatory Commission (BTRC) was created under the Bangladesh Telecommunication Act, 2001 (Act no. 18 of 2001) and began functioning from January 31, 2002.
According to the amendment, 'The Telecommunication Act 2010' envisages the transfer of supreme power to the telecom ministry to regulate the sector, from the existing independent body, the Bangladesh Telecommunication Regulatory Commission.
'First, an independent body in BTRC was created to make dealings more transparent and now, the power is passed on to the Ministry of Telecommunication. The government's policy here seems totally self-contradictory,' Tanjib adds.
However, the Bill, after being placed before the parliament, was sent to the parliamentary standing committee, which was asked to submit a report on it to the house within 15 days.
Newspapers also reported that Hasanul Haq Inu, chairman of the parliamentary standing committee on post and telecommunications, said the committee would stand against the proposed amendment.
'I don't believe the parliament will pass the Bill without making it suitable for the industry,' a newspaper quoted him as saying.
According to a New Age report published on July 5, the World Bank Dhaka office has requested the government not to proceed with the amendment proposals in the telecom law.
'The proposed transfer of certain regulatory powers such as licensing and tariff-setting from the Bangladesh Telecommunications Regulatory Commission to the ministry of post and telecommunications is a cause for concern,' the report quoted the WB country director in Dhaka, Ellen Goldstein, as saying, in a letter to the finance minister, Abul Maal Abdul Muhith, recently.
'On behalf of the World Bank, I would like to take this opportunity to voice concerns over some of the proposed amendments, which could be expected to discourage investment and growth in the sector, by undermining international standards of best practice and creating a high degree of legal and regulatory uncertainty,' said the WB Dhaka chief in the letter.
The letter said that the separation of policy and regulatory functions between a government ministry and a regulatory agency, as provided for in the 2001 Act, is consistent with international best practice.
However, according to sources, such a tough law was first drafted during the army-backed caretaker government. But WB did not express such concerns at the time.
During the tenure of the BNP-led four party alliance government, there were allegations against political leaders and operators for manipulating illegal VoIP which resulted in huge losses being incurred in the government's revenue collection.
As such, after assuming power, the army-backed caretaker government took tough measures against people involved with illegal VoIP alongside a few mobile operators who were fined.
The caretaker government then formulated a tough law against those involved in illegal VoIP and other telecommunication irregularities in December 2008.
An ordinance was issued to make it official during that time. The ordinance was supposed to be ratified in parliament to make it law but that is yet to be the case. Instead, the government placed another Bill before parliament.
Stakeholders in the telecom sector feel that the Bill has kept intact almost everything proposed by the then-interim government, altering only one provision which reduces the maximum imposable fine from Tk 500 crore to 300 crore.
AMTOB and other operators inform Xtra that they have expressed their concern over five issues of the proposed amendment of the Telecommunication act. Firstly, as per amendment, an individual could face imprisonment of up to five years, or a maximum fine of Tk 300 crore or both for 'activities against national harmony, public security and friendly relations with neighbouring countries' through the use of telecom or radio apparatus.
'When such a hefty fine is involved, there is always a scope for it to be misused,' says Mahmud.
'Some of the operators will not be able to stump up such amounts and it is absurd compared to other South Asian countries. The government must select the fine in accordance with international standards,' Ashraf says.
'The fine will be considered as a source of revenue collection which is also abnormal as we handover portions of our revenue to the government already,' he adds.
The second concern for operators is that the Bill has left no room for any appeal by operators against a regulatory decision. The draft law allows law enforcers to arrest any official in the telecom industry without a warrant.
'Not only is an appeal provision in place in the telecommunication laws in other countries but it is also present for other sectors in our country,' Mahmud adds.
'We think that anyone who commits a crime should be punished. But at the same time, it is only equitable for there to be a provision for an appeal against possible punishment. Without an appeal provision, there is a strong likelihood that the law will be misused,' Ashraf says.
The third concern from operators is that all offences would be considered cognisable. The regulator or police could file a case based purely on the premise of suspicion.
'With this provision, the employees will always be in fear. And again, this too can be misused if there is any personal conflict with the concerned authority and the employees of the operators,' Ashraf adds.
Another concern the operators have expressed is that under the proposed Act, the BTRC would be able to change operators' license terms without consultation. 'Such a provision will introduce a risk factor to the sector for future investment,' Mahmud adds.
'We propose that if such a provision has to be added, there should be another provision which will ensure that the regulator can change the terms after discussion with the operators,' Ashraf adds.
And their fifth concern is the social obligation fund. According to the amendment, the operators have to create a social obligation fund. The operators think that such a fund is not necessary as they are conducting social works through corporate social responsibility.
There have been different allegations against some operators about illegal VoIP and high call rates among others. While experts believe that this should be strongly monitored by the government, they feel that the government should discuss any possible consequence with the operators before issuing a step.
'We also think that there should be a check and balance. But the monitoring system should be in line with international standards and it should be put to use after a discussion with the different stakeholders,' Ashraf says.
'If anyone commits a crime, the government can punish him or her. But there should not be any law which allows for the harassment of stakeholders,' he adds.
'The punishment is proposed for any one who will conduct illegal VoIP. Why shouldn't there be a punishment for the offenders?' says an official of the Post and Telecommunication Ministry, who does not want to be identified.
'There should be a system so that there is a level playing field for both government and non-government operators,' says Dr Akbar Ali Khan, former chairman of Regulatory Reforms Commission.
'If any commission cannot work independently and they have to work according to the directives from the government, there is no point of having a commission,' he adds.
'I will try to strike a balance among the regulatory commission, government and the stakeholders before finalising the report,' the chairman of the committee, Hasanul Haq Inu, told New Age.
He said that the committee would try to protect the interests of the investors, subscribers and the country which was pursuing a vision for Digital Bangladesh
Meanwhile, on July 5, the parliamentary standing committee on telecommunications ministry finalised its recommendations on the telecommunications Bill.
Though it did not recommend any changes to the provision, which would force the Bangladesh Telecom Regulatory Commission to take prior approval from the government for issuing licences and setting tariff rates, it inserted some new provisions to the Bill.
The parliamentary standing committee on telecommunications ministry inserted a new provision for the creation of an Appeal Board to dispose of telecom-related offences or breach of telecoms rules within 60 days
The standing committee also added another section to the Bill, authorising the government to appoint an administrator to oversee any errant organisations, which operate under telecom laws.
According to a report in bdnews24.com published on July 5, Hasanul Haq Inu, the committee chairman, told reporters that the Bill 'would only ensure the government's role in the telecom sector.'
He claimed the autonomous BTRC would not lose its powers such as issuing and cancelling telecom licences, allocation of frequency and other day-to-day businesses with prior permission from the telecommunications ministry.
The committee also did not recommend any changes to the provision on social responsibility fund, something which the operators have expressed their dissatisfaction over earlier. But the committee has recommended the telecom ministry sit with the license holders, if the government wants to change the terms and conditions of the licenses.
Despite repeated attempts, Post and Telecommunications Minister Raziuddin Ahmed Razu and the secretary of the ministry, Sunil Kanti Bose could not be reached to comment on this issue.
Cornered
· According to the amendment, an individual could face imprisonment of up to five years, or a maximum fine of Tk 300 crore or both for breach of law
· The bill has left no room for an appeal by an operator against a regulatory decision
· Under the draft law, the BTRC will be able to change operators'
Nonetheless, on June 13, the Bangladesh Telecommunication (Amendment) Bill, 2010, was placed before the Parliament.
According to a newspaper report, the Post and Telecommunications Minister Raziuddin Ahmed Razu, defending the proposed changes, said that the amendments were required to 'legalise' VoIP (phone calls via internet) business and issue call termination operator licences to generate employment.
'If the Bill is passed, it would help curb illegal use of telecom technology and increase revenue incomes,' he is quoted as saying by the newspaper.
Mobile, Public Switched Telecom Network (PSTN) and other operators through their organisation, the Association of Mobile Operators of Bangladesh (AMTOB) reasserted their qualms over the proposed amendment, highlighting some of the provisions as not being investment friendly while urging the government to review those provisions.
According to them, the proposed amendments will create an air of uncertainty over investments, which could potentially render poor performances in terms of mobile penetration in the country.
According to a New Age report, the Association of PSTN, Internet Service Providers Association Bangladesh and the BTRC, in separate letters to the parliamentary committee, also expressed the concern that the government's proposals, if incorporated in to the law, would hamper further investment in the growing telecom industry, which drew approximately Tk 32,000 crore in the last decade.
'When one wants to amend any law, there must be some problems with the existing law. I have been working in this sector for 13 or 14 years but I am yet to identify a problem in the existing law that requires amendment,' says Barrister Tanjib-ul Alam.
'The amendment proposals show a lack of foresight or any consideration for the future of the sector. When someone plans on investing in a sector, he or she seeks a level of certainty in the sector for it to provide returns on the investment. But the provisions in the amendment leave no space for that certainty. For example, if any operator violates a condition, he or she may be fined a maximum of Tk 300 crore,' he adds.
'The amendment will inculcate greater risks into the sector,' says Ashraful Haq Chowdhury, secretary of Association of Mobile Operators of Bangladesh (AMTOB).
'Investors always want safety and security. When there is a provision of imprisonment without any appeal, there is always a possibility that it will be misused. In this case, people will not come to invest and at the same time, few would want to be employed in this sector,' he adds.
'The telecommunication sector has vast potential. It is possible to bring huge investments into this sector. However, in the last two years, apart from Air Tel, no one has shown much willingness to invest here. If such a tough law is enacted, the investment situation will be even worse,' he further says.
'We have been warning about the amendments not being investment-friendly from the very beginning,' says Mahmud Hossain, head of corporate affairs at Grameenphone. 'In the amendment, there is no provision for appeal if an operator is accused of a breach. We hope that in a democratic society, there will be a provision to allow for an appeal,' he adds.
In 2001, the Telecommunication Act was first formulated. Subsequently, the Bangladesh Telecommunication Regulatory Commission (BTRC) was created under the Bangladesh Telecommunication Act, 2001 (Act no. 18 of 2001) and began functioning from January 31, 2002.
According to the amendment, 'The Telecommunication Act 2010' envisages the transfer of supreme power to the telecom ministry to regulate the sector, from the existing independent body, the Bangladesh Telecommunication Regulatory Commission.
'First, an independent body in BTRC was created to make dealings more transparent and now, the power is passed on to the Ministry of Telecommunication. The government's policy here seems totally self-contradictory,' Tanjib adds.
However, the Bill, after being placed before the parliament, was sent to the parliamentary standing committee, which was asked to submit a report on it to the house within 15 days.
Newspapers also reported that Hasanul Haq Inu, chairman of the parliamentary standing committee on post and telecommunications, said the committee would stand against the proposed amendment.
'I don't believe the parliament will pass the Bill without making it suitable for the industry,' a newspaper quoted him as saying.
According to a New Age report published on July 5, the World Bank Dhaka office has requested the government not to proceed with the amendment proposals in the telecom law.
'The proposed transfer of certain regulatory powers such as licensing and tariff-setting from the Bangladesh Telecommunications Regulatory Commission to the ministry of post and telecommunications is a cause for concern,' the report quoted the WB country director in Dhaka, Ellen Goldstein, as saying, in a letter to the finance minister, Abul Maal Abdul Muhith, recently.
'On behalf of the World Bank, I would like to take this opportunity to voice concerns over some of the proposed amendments, which could be expected to discourage investment and growth in the sector, by undermining international standards of best practice and creating a high degree of legal and regulatory uncertainty,' said the WB Dhaka chief in the letter.
The letter said that the separation of policy and regulatory functions between a government ministry and a regulatory agency, as provided for in the 2001 Act, is consistent with international best practice.
However, according to sources, such a tough law was first drafted during the army-backed caretaker government. But WB did not express such concerns at the time.
During the tenure of the BNP-led four party alliance government, there were allegations against political leaders and operators for manipulating illegal VoIP which resulted in huge losses being incurred in the government's revenue collection.
As such, after assuming power, the army-backed caretaker government took tough measures against people involved with illegal VoIP alongside a few mobile operators who were fined.
The caretaker government then formulated a tough law against those involved in illegal VoIP and other telecommunication irregularities in December 2008.
An ordinance was issued to make it official during that time. The ordinance was supposed to be ratified in parliament to make it law but that is yet to be the case. Instead, the government placed another Bill before parliament.
Stakeholders in the telecom sector feel that the Bill has kept intact almost everything proposed by the then-interim government, altering only one provision which reduces the maximum imposable fine from Tk 500 crore to 300 crore.
AMTOB and other operators inform Xtra that they have expressed their concern over five issues of the proposed amendment of the Telecommunication act. Firstly, as per amendment, an individual could face imprisonment of up to five years, or a maximum fine of Tk 300 crore or both for 'activities against national harmony, public security and friendly relations with neighbouring countries' through the use of telecom or radio apparatus.
'When such a hefty fine is involved, there is always a scope for it to be misused,' says Mahmud.
'Some of the operators will not be able to stump up such amounts and it is absurd compared to other South Asian countries. The government must select the fine in accordance with international standards,' Ashraf says.
'The fine will be considered as a source of revenue collection which is also abnormal as we handover portions of our revenue to the government already,' he adds.
The second concern for operators is that the Bill has left no room for any appeal by operators against a regulatory decision. The draft law allows law enforcers to arrest any official in the telecom industry without a warrant.
'Not only is an appeal provision in place in the telecommunication laws in other countries but it is also present for other sectors in our country,' Mahmud adds.
'We think that anyone who commits a crime should be punished. But at the same time, it is only equitable for there to be a provision for an appeal against possible punishment. Without an appeal provision, there is a strong likelihood that the law will be misused,' Ashraf says.
The third concern from operators is that all offences would be considered cognisable. The regulator or police could file a case based purely on the premise of suspicion.
'With this provision, the employees will always be in fear. And again, this too can be misused if there is any personal conflict with the concerned authority and the employees of the operators,' Ashraf adds.
Another concern the operators have expressed is that under the proposed Act, the BTRC would be able to change operators' license terms without consultation. 'Such a provision will introduce a risk factor to the sector for future investment,' Mahmud adds.
'We propose that if such a provision has to be added, there should be another provision which will ensure that the regulator can change the terms after discussion with the operators,' Ashraf adds.
And their fifth concern is the social obligation fund. According to the amendment, the operators have to create a social obligation fund. The operators think that such a fund is not necessary as they are conducting social works through corporate social responsibility.
There have been different allegations against some operators about illegal VoIP and high call rates among others. While experts believe that this should be strongly monitored by the government, they feel that the government should discuss any possible consequence with the operators before issuing a step.
'We also think that there should be a check and balance. But the monitoring system should be in line with international standards and it should be put to use after a discussion with the different stakeholders,' Ashraf says.
'If anyone commits a crime, the government can punish him or her. But there should not be any law which allows for the harassment of stakeholders,' he adds.
'The punishment is proposed for any one who will conduct illegal VoIP. Why shouldn't there be a punishment for the offenders?' says an official of the Post and Telecommunication Ministry, who does not want to be identified.
'There should be a system so that there is a level playing field for both government and non-government operators,' says Dr Akbar Ali Khan, former chairman of Regulatory Reforms Commission.
'If any commission cannot work independently and they have to work according to the directives from the government, there is no point of having a commission,' he adds.
'I will try to strike a balance among the regulatory commission, government and the stakeholders before finalising the report,' the chairman of the committee, Hasanul Haq Inu, told New Age.
He said that the committee would try to protect the interests of the investors, subscribers and the country which was pursuing a vision for Digital Bangladesh
Meanwhile, on July 5, the parliamentary standing committee on telecommunications ministry finalised its recommendations on the telecommunications Bill.
Though it did not recommend any changes to the provision, which would force the Bangladesh Telecom Regulatory Commission to take prior approval from the government for issuing licences and setting tariff rates, it inserted some new provisions to the Bill.
The parliamentary standing committee on telecommunications ministry inserted a new provision for the creation of an Appeal Board to dispose of telecom-related offences or breach of telecoms rules within 60 days
The standing committee also added another section to the Bill, authorising the government to appoint an administrator to oversee any errant organisations, which operate under telecom laws.
According to a report in bdnews24.com published on July 5, Hasanul Haq Inu, the committee chairman, told reporters that the Bill 'would only ensure the government's role in the telecom sector.'
He claimed the autonomous BTRC would not lose its powers such as issuing and cancelling telecom licences, allocation of frequency and other day-to-day businesses with prior permission from the telecommunications ministry.
The committee also did not recommend any changes to the provision on social responsibility fund, something which the operators have expressed their dissatisfaction over earlier. But the committee has recommended the telecom ministry sit with the license holders, if the government wants to change the terms and conditions of the licenses.
Despite repeated attempts, Post and Telecommunications Minister Raziuddin Ahmed Razu and the secretary of the ministry, Sunil Kanti Bose could not be reached to comment on this issue.
Cornered
· According to the amendment, an individual could face imprisonment of up to five years, or a maximum fine of Tk 300 crore or both for breach of law
· The bill has left no room for an appeal by an operator against a regulatory decision
· Under the draft law, the BTRC will be able to change operators'
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