Can regulate cloud service companies under Trai Act: RS Sharma

NEW DELHI: The Telecom Regulatory Authority of India has claimed complete jurisdiction to regulate cloud service providers such as Amazon Web Services and Microsoft Azure, even as the industry contended that it is already regulated by the Ministry of Electronics and Information Technology (MeitY).

“CSPs are service providers under the Trai Act and, therefore, we are dealing with this issue,” Trai chairman RS Sharma said on Friday.

He was speaking at an open house discussion on a Trai consultation paper seeking suggestions for a framework to set up an industry body to regulate cloud service providers (CSPs) like Amazon Web Services, Microsoft Azure, VMware and CtrlS.

Trai secretary SK Gupta said, “Anything which is wired/wireline, audio, sound, image…everything is covered under telecommunication and therefore, well within the framework of the Trai Act.”

The Trai officials were responding to comments from officials of Amazon, Microsoft and telecom body Cellular Operators Association of India (COAI) who argued that CSPs are already regulated by MeitY and any additional regulation by the telecom department or TRAI will lead to an overlap.


A representative of Amazon Web Services said all the issues raised in the Trai consultation paper are already governed by some law or the other, be it data processing or compliance needs. “RBI, Sebi and IRDAI (insurance regulator) have very strict outsourcing guidelines that are enforced as well on us,” the official said. “Overarchingly, you've got the IT Act in place that governs each of our offerings along with a contract law.”

Sharma countered it, saying all Trai recommendations are sent to the Government of India and not to any single department. The regulator had also sent recommendations to BN Srikrishna committee when it was deliberating on the draft of Data Protection Bill, 2019, he pointed out.

“Let us not lambast Trai for trying to interfere in the area,” Sharma said. “We are not trying to regulate it. We floated a consultation paper to see whether the industry could voluntarily come out with a code of conduct or best practices.”
Sunil Bajpai, advisor, Trai, said previously recommendations on CSPs have been approved by MeitY along with DoT.

Trai had in October sought public views on parameters for companies to become members of a cloud industry body and the likely governance structure.

Stakeholders such as COAI and Microsoft wanted to know where did the question of a CSP association come from, when there was no mention of it in Trai’s first consultation process back in 2017?
“Neither the creation of this body nor the mandate to listen to this body is something for which that it should be a public discussion,” said telecom consultant Mahesh Uppal. “I think these are best left to market players.”

Devashish Bhattacharya from Broadband India Forum said setting up of a self-regulatory body may lead to additional business compliance costs for CSPs, which startups in the space may not be able to afford.

Reliance Jio Infocomm, though, contradicted the industry body’s stand by backing a “light touch regulation” for CSPs through a not-for-profit industry body.