Telecommunication Law and Regulatory Framework in Nepal

Telecommunication Law and Regulatory Framework in Nepal Advocate Babu Ram Aryal Chairman, Center for Law and Technology, Kathmandu, Nepal

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 This is prepared for the Broadband Policy Course in Nepal Jointly Organized by LIRNEasia, ISOC Nepal and Center for Law and Technology at Dhulikhel, Nepal on 14-17, July 2017. 2

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Telecom Regulation in Nepal Operating any form of telecommunication service In Nepal dates back to 1970. However, telecom service was formally provided mainly after the establishment of MOHAN AKASHWANI in B.S. 2005. Later as per the plan formulated in the First National Five year plan (2012-2017 Department was established in B.S. 2016. BS); Telecommunication To modernize the telecommunications services and to expand the services, during third five-year plan (2023- 2028), Telecommunication Department was converted into Telecommunications Development Board in B.S. 2026. 3

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 After the enactment of Communications Corporation Act 2028, it was formally established as fully owned Government Corporation called Nepal Telecommunications Corporation in B.S. 2032 for the purpose of providing telecommunications services to Nepalese People. Nepal Telecommunications Authority as an autonomous regulatory body has been established on March 4, 1998 as stipulated within the framework of the Telecommunication Act 1997 A.D. and Telecommunication Regulation 1997 A.D. 4

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Major Telecom Laws and Policies Telecommunication Act, 1997 Telecommunication Rules, 1997 National Broadcasting Act 1993 A. D. Telecommunication Policy 2004 A. D. ICT Policy 2015 Broadband Policy 2015 Spectrum Policy 2013 (ammedment-2017) 5

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Telecommunications: Meaning "Telecommunications" means the act of emission, transmission or reception, through the agency of electricity or electromagnetism, of any sounds, signs, signals, writings, images or intelligence of any nature, by the wire, radio, optical or other electromagnetic systems, whether or not such signs, signals, writings, images, sounds or intelligence have been subjected to rearrangement, computation or other change in any manner for their emission, transmission or reception. 6

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Regulatory Framework: NTA Telecommunication Licenses are given by Nepal Telecommunication Authority 7

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Nepal Telecommunication Authority 8

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Nepal Telecommunications Authority is an independent body founded under the Telecommunication Act 1997. The NTA is responsible for regulating all matters related to telecommunications (wireless, cellular, satellite and cable) of Nepal. The then Government of Nepal's on December 25, 1995 (2052/09/10) decided to welcome private sector into the telecommunication sector in the country. This decision of the cabinet was meant to be a liberalization policy in the ICT for development. 9

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Formation of the Authority As per the clause 5 of the Telecommunication Act 1997 A. D. , the Authority shall consist of five Members including the Chairman who are qualified and experienced, as prescribed in the technical and administrative, market management, accounts and auditing or legal field relating to the Telecommunications Service. Nepal Government shall constitute a committee comprising of experts from the related sectors, to make recommendation for the appointment of the Chairman and Members of the Authority and Nepal Government shall on the recommendation of the said committee appoint the Chairman and Members of the Authority. The Authority may, if it deems necessary, invite any expert to participate in the meeting of the Authority an observer. 10

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 The current members of the Authority are: Mr. Digambar Jha, Chairman (since 4 ,Dec,2012) Mr Dhan Raj Gnyawali , Member (since 4 Dec,2012) Mr Tika Prasad Upreti, Member (since13 Nov,2014) 11

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Function and Power To provide suggestions to Government of Nepal on the policy, plan and program to be adopted by Government of Nepal for the development of the Telecommunications Service. To make the Telecommunications Service reliable and easily available to the public. To make necessary arrangement to avail basic telecommunications Service and facilities in all rural and urban areas throughout the Nepal. To involve the national and foreign private sector investors in the operation of the Telecommunications Service. To make arrangement for the coordination and healthy competition among the persons providing Telecommunications Service and facilities, so as to provide such service and facilities to all public in general. 12

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Functions: To prescribe, fix and approve the standard and quality standard of the plant and equipment relating to the Telecommunications and the Telecommunications Service. To regularize and systematize Telecommunications Service To grant the license to operate the telecommunications service To approve and regularize the fees to be collected by a person having obtained License for providing the Telecommunications Service. To perform the functions relating to the frequency in accordance with the policy determined by the Radio Frequency Policy Determination Committee. 13

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Functions: To carry out or cause to carry out the research about the development and use of new technology in the field of Telecommunications. To cause to develop the skilled human resource for the Telecommunications Sector. To develop and extend or cause to develop and extended the Telecommunications Service in such a way that it protects the rights and interests of the consumers. To develop or cause to develops Nepal as an International Transit for Telecommunications. To carry out necessary and appropriate functions for the development and promotion of the Telecommunications Service. 14

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Type of Operators Voice [Telecom Operators]: Internet Service Provider Network Service Provider Rural Internet Service Provider 15

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Frequency Management in Nepal The Spectrum Policy, 2013 (Amendment, 2016), strategizes to form a Procedure for frequency policy determining committee to process a plan, redistribute frequency, in a more transparent, objective, and business effective manner. When the Spectrum Policy was issued in 2013, 2100 MHz was identified for 3G and 700 MHz, BWA 2300 MHZ and 2600 MHz were identified for 4G and supposed to call for auction. But, there was no any auction then. For both the band, 900 MHz and 1800 MHz have become more useful now. But, these frequencies are not available as they are already allotted. Considering the changed importance and utility of 900 MHz, 1800 MHz and 2300 MHz band, the Spectrum Policy was also amended in 2016. It was also realized to identify the range, minimum and maximum Bandwidth and the 2016 amendment settles these issues. 16

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Quality and Standard of Service NTA shall determine the quality and standard of the machine, equipment and facilities relating to the Telecommunications and the Telecommunications Service. The Authority shall Prescribe the minimum standard to be maintained by a License in operating the Telecommunications Service. 17

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Telecommunication Act, 1997 To develop and extend or cause to develop and extended the Telecommunications Service in such a way that it protects the rights and interests of the consumers. [S. 13(m)] 18

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Telecommunication Act, 1997 In case it requires to stop the transmission of information or to control transmission system due to the state of emergency or national security, Government may carry out the following acts: - To take temporarily the Telecommunications Line and the Telecommunications System installed, operated or supervised by the Licensee under its possession, To order to tape the information, to trace the transmitter of the information or to stop such information related to any specific subject, person or community. [S.19(1)] 19

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Power to Issue Orders or Directives NTA may, in view of the policy and guidelines of Government of Nepal, issue necessary orders or directives to the Licensee and it shall be the duty of the concerned person to comply with such orders or directives. NTA may require the particulars of the activities carried out by the Licensee and the particulars related to the Telecommunications Service operated by the Licensee and it shall be the duty of the concerned person to provide such particulars. 20

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Power of Inspection & Investigation The Authority may, if it deems necessary, inspect or investigate the activities carried out or the services provided by the Licensee, at any time. The Authority may, for the purpose of inspection or investigation pursuant to Sub-section (1), designate any person or body of the Authority. It shall be the duty of the concerned Licensee provide information or particulars and documents required by the Authority or the person or body designated pursuant to Sub-section(2) in course of the inspection or investigation. The procedures to be followed in course of inspection or investigation pursuant to this Section, the report thereof and the provisions relating to the execution of the report shall be as prescribed. 21

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Special Powers of Government 22

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 State of emergency/National security To take temporarily the Telecommunications Line and the Telecommunications System installed, operated or supervised by the Licensee under its possession, To order to tape the information, to trace the transmitter of the information or to stop such information related to any specific subject, person or community. After the expiry of the circumstance stated above, the telecommunications Line and Telecommunication System so possessed by Government of Nepal shall be returned to the concerned Licensee. 23

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Power to Issue Directives: Government of Nepal may, from time to time, issue necessary directives to the Authority in connection with Diversification, extension and regularization Telecommunications Service in line with the Telecommunications policy of the country of the It shall be the duty of the Authority to comply with such directives. 24

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Tariff Approval and Taxation Service charged shall be proper and reasonable and have to be approved from NTA as well as shall have to be published as directly by NTA. In the same manner Section 5.13 of the Telecommunications Policy, 2056 (1999) requires that tariffs for telecommunications services are to be cost based to the extent possible. For Rural Telecommunications Services operator, the requirement of cost based tariff is not applicable. No licensee is allowed to use the revenue earned from one service to another service as cross subsidy. All licensees are required to establish a separate company or profit center-based units to run the services specified in the license. All licensees are required to establish and maintain separate accounts for each service specified in the license.In the cost based tariff model, the maximum allowed rate of return on investment should be 25%. 25

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Tariff Approval and Taxation Fixed Tariffs: The tariffs, which are approved by NTA, shall remain unchanged until a new proposal is present and approved by the NTA. Maximum Tariffs: The tariffs, which is fixed as maximum by NTA. The operator can decrease tariffs without prior approval from the NTA but prior notification is essential. Non- regulated tariffs: The tariffs, which are not regulated by NTA. The operator can decrease or increase tariffs without prior approval from the NTA but prior notification is essential. Festival offer and similar other offer is of this category. 26

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Taxation of Telecom Service Total Bill Amount: XXXX Telecom Service Charge: XXXX*10% Value Added Tax: *13% (XXXX+XXXX*10% ) Total : XXXX+TSC+VAT Besides, there is 2 % tax (Rural Telecommunication Development Fund, an USF Fund) on total transaction of the Company and 4 % royalty to be submitted to the NTA. 27

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Privacy and Data Protection 28

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Babu Ram Aryal et al. v. Government of Nepal et al. (2016) Privacy is an individual s personal and inherent rights. Guarantee against any unnecessary intervention by the government or any third party in an Individual personal work and activities is the objective and substance of the modern era privacy rights. The Privacy is any individual s rights to be alone or it is related with right to be alone . This concept fully denounces any intervention of the government or the third party in any individual s life. That s why it is also said that a man without privacy is a man without dignity. 29

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 The Judgment . Operators are under the obligation of of the Constitution and other laws. As the Privacy is the fundamental rights guaranteed by the Constitution, it is their obligations too to protect this rights through their service. Giving and Receiving the individual s private phone call details and SMS and use for any other unpermitted objective amounts illegal. I such situation, individual s privacy always deemed in danger. Retaining the the CDR and SMS unauthorized collection by security agency is irrelevant and illegal. 30

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 The Judgment . Operators are under the obligation of of the Constitution and other laws. As the Privacy is the fundamental rights guaranteed by the Constitution, it is their obligations too to protect this rights through their service. Giving and Receiving the individual s private phone call details and SMS and use for any other unpermitted objective amounts illegal. I such situation, individual s privacy always deemed in danger. Retaining the the CDR and SMS unauthorized collection by security agency is irrelevant and illegal. 31

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 The Judgment . As Executives themselves can perform their function within the scope of the law, uncontrolled access to the information is nor prerogative rights. Institutions or the Departments who store(retain) the information or the custodians of the information can not make the use of them as their discretionary issue. They should preserve the information databank at any situation and even in the absence of legal protection, except in exceptional case, have to deny unauthorized access to the information. Not able to protect information remained with them by fear or any influence amounts the failure to perform their responsibility and in extent it is unlawful/illegal. From this, rather than protection from criminals, there is possibility of protection of criminals themselves and state itself become insured. 32

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 The Judgment . The implementation of the Article 28 (Right to Privacy) is a mandatory and hereby directs [..the Court] the concern government agency through a directive order to make a necessary law adopting the universal principle of the privacy. Until any legal arrangement made, if there any urgent situation arises in the course of investigation of any crime to collect such information, pursuant to any law, it is directed to make arrangement to receive mandatory approval from the district court. 33

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Q&A ! 34

Advocate Babu Ram Aryal, Chairman, Center for Law and Technology 3/15/2025 Thank you Babu Ram Aryal Chair, Center for Law and Technology baburam@cltnepal.com /@merobabu/@cltnepal 35