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Explained | Why is the government pushing for regulatory mechanisms for OTT services?

Why is the Telecom Regulatory Authority of India seeking opinions on the selective banning of OTT services like WhatsApp, Facebook, and others? Why are Telecom Service Providers advocating for regulation? Does a ban conflict with net neutrality principles?

The story unfolds as follows: On July 7, the Telecom Regulatory Authority of India (TRAI) called for feedback on a consultation paper regarding the regulation of over-the-top (OTT) communication services. The paper also discusses the possibility of selectively banning these services. With most stakeholders having submitted their responses by the September 1 deadline, it is likely that the TRAI will issue guidelines soon, determining whether OTT services should be subject to regulation or allowed to continue as is.

So, what led to this discussion? The debate surrounding the selective banning of OTT services stemmed from a notice issued by a Parliamentary Standing Committee to the Department of Telecom (DoT). This was in response to concerns arising from these platforms, which have a wide-reaching impact.

It's essential to clarify that the consultation paper solely addresses OTT communication services like WhatsApp, Signal, Meta, Google Meet, Zoom, and others. It does not cover content-based OTTs like Netflix and Amazon Prime, as content regulation falls under the jurisdiction of the Ministry of Information and Broadcasting (MIB) rather than the TRAI.

Additionally, the TRAI has called upon stakeholders to define OTT and provide suggestions regarding cost-sharing arrangements between Telecom Service Providers (TSPs) and OTT services.

Now, let's explore the conflict between TSPs and OTTs. Telecom Service Providers argue that OTTs should be regulated and charged because they rely on the infrastructure established by operators over the years. Currently, they operate without such regulations.

According to the Cellular Operators Association of India (COAI), representing telecom giants like Jio, Airtel, and Vodafone Idea, "OTT communication services have eroded telcos' revenues. These platforms offer a range of services, including multimedia messaging, instant messaging, and voice and video calls, over the internet. This reduces the need for traditional telecom services, such as voice calls and text messages, leading to a significant drop in telecom companies' revenue streams."

COAI asserts, "OTT communication service providers do not contribute financially to the government and do not invest in building network infrastructure in the country. They benefit from TSP-funded networks without contributing to the establishment and maintenance of digital infrastructure for access networks."

What is the proposed solution? COAI demands a policy framework that ensures large OTT service providers contribute fairly to telecom network operators based on criteria such as the number of subscribers or data usage. This contribution would compensate for increased data demands and support network expansion, ultimately benefitting the government financially.

Similarly, the Internet Service Providers Association of India suggests that if OTT services are substitutable services offered by licensed service providers, they should be subject to the same rules as telecom services, whether provided on an operator's network or over the internet.

But not everyone agrees with these proposals. The Internet and Mobile Association of India (IAMAI) argues that cost-sharing models, where the sending party network pays (SPNP) the network operator, would effectively charge consumers twice for the same service. This would increase the cost of accessing free or affordable content and contradict the principles of net neutrality, which call for network neutrality in transmitting all information.

The Internet Freedom Foundation also expresses concerns about the idea of selectively banning OTT services.

So, why would someone argue for banning OTT services? COAI suggests that licensing OTT communication services would make it easier to implement location-based access restrictions, thus giving the government more control. They propose source-level blocking to achieve desired outcomes without significant complications.

On the contrary, IAMAI believes that additional regulations for OTT services are unnecessary, and a selective banning framework is not required. The Broadband India Forum (BIF) firmly opposes selective bans, as they argue that OTT services are already adequately regulated under existing laws such as the IT Act, 2000, and the Consumer Protection Act, 2019.

In conclusion, the TRAI's consultation paper has sparked a lively debate about the regulation and potential banning of OTT communication services, with Telecom Service Providers and OTT service providers advocating different positions. The outcome of this debate will likely have significant implications for the future of digital communication in India.

Photo Credit: REUTERS