Fiber Opportunity In India: Regulatory Framework And Right-Of-Way Management
With increasing demand for high-speed internet, 5G roll-out and data center growth, deployment of a robust and reliable optic fiber cable (“OFC”) infrastructure has become essential to support India’s expanding digital ecosystem. Fueled by this market opportunity, companies are focusing on expanding their OFC networks and investors are exploring potential opportunities for fiber investments in India. Several telecom operators have already consolidated their fiber assets in a path towards monetization of such assets.
This note explores the legal framework and recent developments regarding Right-of-Way (“RoW”) for OFC in India.
FIBER DEPLOYMENT MODELS
In India, fiber assets are typically owned by one of the following entities:
1. Unified license holders, such as telecom operators and internet service providers, which are permitted to own, establish, operate and share dark fiber, duct space and RoW with other licensees.
2. Passive infrastructure providers, such as tower operators and fiber operators, that hold Infrastructure Provider – Category-1 (“IP-1”) registration and are authorized to establish and maintain assets such as dark fibers, RoW and duct space, for the purpose of granting such assets on lease, rent or sale basis to telecom licensees.
3. Public sector undertakings, such as RailTel and PowerTel, and state transmission utilities that use their existing OFC network for providing telecom infrastructure.
FOREIGN INVESTMENT
India permits 100% foreign investment in fiber operators, subject only to the condition that investments by an entity of a country which shares land border with India (each such country, a “Restricted Country”) or where the beneficial owner of an investment into India is situated in or is a citizen of any such Restricted Country will require prior approval of the Central Government.
REGULATORY FRAMEWORK
The Department of Telecommunications (“DoT”) regulates activities of companies owning and/or operating fiber networks, including issuance of licenses and registrations as well as introduction of reforms in the process of RoW permissions.
The Government of India has been promoting enhanced fiberization of the telecommunication infrastructure with the objective of enhancing telecommunication and broadband connectivity. To that end, the Government implemented the ‘Fiber First Initiative’ in the National Digital Communications Policy, 2018 issued by DoT.
While these policies helped in achieving the goal of increased fiberization, there were certain challenges in obtaining RoW permissions, which are critical to the deployment of OFC infrastructure given that a majority of OFC networks in India are underground. Acquiring access to the land is therefore essential for the uninterrupted laying of cables.
One such challenge was that under the erstwhile Indian Telegraph Right of Way Rules, 2016, which was applicable to the establishment and maintenance of underground and overground telegraph infrastructure by licensed telecom operators, telecom licensees were required to submit RoW applications on different platforms of states/union territories and various authorities (such as the Ministry of Railways, Ministry of Power, Ministry of Road Transport and Highways, and local municipal authorities). This often led to project delays and cost escalations due to increased timelines.
In this background, the DoT introduced the integrated and centralized Gati Shakti Sanchar Portal in May 2022 as a single window mechanism for all RoW applications by telecom licensees as well as infrastructure providers to enable timely disposal of such applications to enable faster laying of optical fibre cables.
Consistent with such efforts to promote ease of doing business and streamline the RoW permission process for telecommunication networks (including terrestrial, satellite and submarine networks), the DoT has notified relevant provisions of the Telecommunications Act, 2023 (the “Act”) and the Telecommunications (Right of Way) Rules, 2024 (the “RoW Rules 2024”). Key features of the Act and the RoW Rules 2024 applicable to laying of underground infrastructure are set out below:
- Expanded definition of “facility provider”: Section 10(a) of the Act defines a facility provider to mean the Central Government or any authorized entity, including any contractor or subcontractor or agent working for the Central government or authorized entity and includes their successors and assignees.
Unlike the Indian Telegraph Right of Way Rules, 2016 which permitted only telecom licensees to apply for a RoW, the new definition expands the scope of eligible entities entitled to seek a RoW to include contractors, subcontractors or agents, such as EPC contractors, appointed by the authorized entities.
- Expanded definition of “public entities”: Section 10(b) of the Act defines a public entity to mean the Central or State Government, local authority, any authority/body/company/institution established by the Central/State Government or under any statute or any non-government entity vested with the ownership, control or management of any public facility.
Public entity refers to the owner of the public property over which the facility provider intends to develop the telecommunication infrastructure (including the laying down of OFCs).
The definition of public entities has been broadened to include government agencies, local bodies as well as public-private partnership projects like airports, seaports, and highways.
- Procedure for seeking RoW over public property: Pursuant to Section 11 of the Act and Rule 6 of the RoW Rules 2024, a facility provider is required to submit the RoW application to establish underground telecommunication network through the Gati Shakti Sanchar Portal, together with supporting information/documentation such as a copy of the Central Government authorization (i.e., the unified license or the IP-I registration) or the exemption from such license/registration requirements, details of the underground network proposed to be laid, a copy of as-built drawings, estimated duration of the work and specific measures to mitigate public inconvenience.
- Definite timelines: The RoW Rules 2024 provide detailed specific timelines for the application process. Rule 7(6) provides that if no decision is given by a public entity within 67 days from the date of receiving the application, the RoW permission is deemed to be granted. Further, any rejection should be based on reasonable grounds to be recorded in writing after providing an opportunity to the facility provider to respond to the grounds for rejection.
For a facility provider, these timelines coupled with the provision for deemed approval is beneficial as it would ensure timely disposal of RoW applications. As the entire process is through a single-window portal, the facility provider would not need to approach different ministries for the RoW. Further, the requirement of disclosing the reasons for the potential rejection of an application could potentially minimize rejection of RoW applications for extraneous reasons.
- Validity of the RoW permission: RoW permissions granted to a facility provider under the RoW Rules 2024 will be co-terminus with the term of authorization or license (or exemption from such authorization or license) and remain valid unless terminated.
- RoW over private property: The RoW Rules 2024 provide two routes for seeking RoW over private property, either by:
o mutual written agreement between the facility provider and the owner of the property (specifying inter-alia the consideration payable by the facility provider, steps to be undertaken in case of damage to the property and damages payable if the required steps are not taken) as provided in Rule 15 of the RoW Rules 2024, or
o in the absence of mutual agreement, the facility provider may submit an application through the Gati Shakti Sanchar Portal to the district collector to exercise its powers under Rules 16 of the RoW Rules 2024 to determine whether such RoW is necessary in public interest, and if the district collector determines it to be so, it is required to pass an order granting permission specifying the charges payable by the facility provider and other conditions.
ROLE OF STATE GOVERNMENTS
Recognizing the key role of state governments in the RoW process, the DoT has instructed all states to mandatorily implement the RoW Rules 2024 without any need for separate adoption process. Recently, the Delhi government issued a notification implementing the RoW Rules 2024 in the NCT of Delhi. A uniform implementation of RoW Rules 2024, which simplifies the RoW approval process across public and private properties, is expected to ensure efficient development of fiber infrastructure in the country.
CONCLUSION: THE WAY FORWARD
The success of OFC deployment, which is fundamental to India's digital economy, depends largely on the ability of both Central and State governments to work together towards uniform, transparent and efficient RoW frameworks. Implementation of the Gati Shakti Sanchar Portal and adoption of the RoW Rules 2024 are a step in the right direction.
Moving forward, a well-coordinated approach between various levels of government and uniform implementation of the RoW Rules 2024 across states will ensure that India is better positioned to meet its fiberization targets and facilitate the rapid deployment of 5G technology.