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May 12, 2023

Cloud service providers are not subject to DoT regulation

Cloud service providers are not subject to DoT regulation

The Telecom Regulatory Authority of India (Trai) proposed that the Department of Telecommunications (DoT) regulate cloud service providers (CSPs) such Amazon Web Services, Google Cloud, Microsoft Azure, Salesforce, and Zoho. The Department of Telecommunications (DoT) rejected the idea.

According to authorities with knowledge of the situation, the department believes that the Ministry of Electronics and Information Technology (Meity), which oversees such entities, should maintain the current mechanism.

Officials claim that after reviewing the regulator’s 2020 recommendations on the matter, DoT opted against accepting them. The regulation of cloud service providers has been done by Meity, and this system should continue. We have provided Trai with our point of view,” a DoT official told ET.

The telecom, IT, and cloud services sectors all rejected the Trai’s recommendations and wrote to the DoT to argue that the services did not belong under the purview of telecommunications.

The government opted against drafting any new policy for regulating the CSPs and to stick with the current framework since everyone—including the tele-com operators—was against Trai’s suggestions, the officials added.

The development of an additional regulatory framework, according to a number of industry organisations, would hurt efforts to draw capital to the cloud business.

Organisations like Nasscom, the Cellular Operators Association of India, the Information Technology Industry Council, the Software Alliance, etc. had advised the DoT that the telecom department should not regulate CSPs because they were not like telephone operators. They had emphasised that the MeitY has been overseeing CSPs throughout the nation and has established the requirements for their empanelment for government functions.

The IT Act of 2000, the Indian Contract Act of 1872, the Consumer Protection Act of 2019, and other laws are among those that apply to CSPs.

According to Trai’s September 2020 recommendations, DoT should start the process of establishing a CSP industry-led agency to oversee the sector’s regulation. According to the recommendations, telcos shouldn’t be permitted to share telegraph or telecom-related infrastructure and platforms with a CSP who isn’t a member of the industry-led group registered with the DoT. Everyone rejected the suggestions since they were so harmful to both CSPs and telcos.

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