Telecom, IT associations oppose move to regulate cloud service providers

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Published: May 15, 2020 1:30 AM

Major CSPs in India include Amazon Web Services, Microsoft Azure, VMware, Google compute engine, Netmagic, Red Hat, Salesforce and Zoho.

COAI, DoT, coronavirus pandemic, telecom department, telecom operators, telecom sectorThe creation of a regulatory framework does not fall within the ambit of the Telegraph Act and Trai Act, as cloud service providers (CSPs) cannot be classified as telecom operators.

Telecom and information technology associations including Nasscom and the Cellular Operators Association of India (COAI) have opposed the proposal of the Telecom Regulatory Authority of India (Trai) to set up a regulatory body for cloud service providers, as it would negatively impact the growth of the industry. Moreover, the associations felt that the creation of a regulatory framework does not fall within the ambit of the Telegraph Act and Trai Act, as cloud service providers (CSPs) cannot be classified as telecom operators.

Major CSPs in India include Amazon Web Services, Microsoft Azure, VMware, Google compute engine, Netmagic, Red Hat, Salesforce and Zoho.

It must be mentioned that Trai had issued a consultation paper on October 23, 2019 seeking comments from stakeholders regarding registration of an industry body for CSPs and what should be the terms and conditions for the same.

The consultation paper was issued after the Department of Telecommunications (DoT) sought recommendations for the same from Trai. Earlier, DoT in December 2012 had sought Trai’s recommendations on the broad aspects of cloud computing. The regulator gave the proposals in August 2017, which included legal and regulatory framework for cloud services.

But the latest consultation paper has irked the information technology (IT) sector as it is seen as an overlap on the mandate of the ministry of electronics and IT (Meity). As per IT industry association Nasscom, the CSPs in India should not be subject to regulation by DoT or Trai, directly or indirectly. Nasscom said if any additional regulation is required, it should be left to Meity.

“The consultation by Trai overlaps with the regulatory scope of Meity,” Nasscom said in reply to the consultation paper. It added there are existing laws and regulations that govern the CSPs in India like the IT Act, Consumer protection Act and the upcoming data protection rules. The association said any regulation will in turn only hurt the Indian government’s flagship ‘Digital India’ programme and the goal of creating a $1-trillion digital economy by 2025.

Among other things, the industry body would be required to impose a mandatory code of conduct on CSP members, comply with directions or orders issued by DoT and furnish information to DoT or Trai on demand. The associations feel that “instead of promoting a self-regulatory approach developed by industry members themselves, such a registered industry body will negatively impact the growth of cloud services industry”.

But notwithstanding the opposition from the sector, Trai went ahead and conducted an open house discussion on February 28 this year. During the discussion, almost the entire industry felt that there was no need to for any body to regulate CSPs.

In a joint letter by industry associations Nasscom, COAI, ITI and ACTO to Trai, it has been urged that the concerns should be taken into account before giving recommendations to DoT.

The associations said they represent members of an industry with great growth potential and which has contributed to Digital India. It is estimated that cloud spending in India will grow at 30% per annum to reach $7.1-7.2 billion by 2022. In 2019, India’s public cloud services recorded the third-highest growth rate globally.

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