Contrary to telco demands, Broadband India Forum opposes OTT regulation

BIF has emphasised that as OTTs are currently regulated under the IT Act 2000 and other related legislation, additional regulations under the Telecom Law are not necessary, allaying fears of Telcos over security and lawful interception

In its counter-comments to the TRAI Consultation Paper titled "Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services," the Broadband India Forum (BIF) stated that telecom operators' demands for network usage fees from OTTs are out-of-date and would be in violation of net neutrality principles.

When the telcos request that the OTTs pay Network Usage Fees for carrying the significant amount of traffic that the former generates, BIF observed that "Telcos wish to cling to an old, legacy, and obsolescent system of "Sending Party Network Pays (SPNP)," common during the voice telephony era of the 1990s."

BIF President, T V Ramachandran said, "OTTs (content and applications over the internet) have been empowering individuals by boosting productivity and socio-economic standing in addition to having massive economic spillover effects on the nation's prosperity. Overregulation of the OTTs would be counterproductive, as this will lead to a higher cost to customers and reduce consumer choice. Besides, it would also adversely impact innovation, lead to discrimination, adversely impact smaller entities and startups, and lead to a violation of Net Neutrality guidelines."

The "sending-party-network-pays (SPNP)" principle, which telecom operators are citing as justification for their demand for network usage fees, was built into the previous generation of voice telephony systems in the 1990s, according to BIF. On the internet, things work differently because consumers want to always be connected to content, programmes, and services in addition to communicating with one another. The imbalance in internet traffic between content and application providers and internet access providers can be attributed to this.

The only instance of South Korea listed in the context of SPNP, according to Broadband India Forum, is one with known to have had unsatisfactory results, with the parties involved (SKT and Netflix) recently opting to mutually withdraw the agreement between them. Additionally, according to BIF, a number of minor players were forced to leave the nation as a result of legal disadvantages.

The Telecom Regulatory Authority of India (TRAI) on 7th of July, this year released a Consultation Paper on Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services. Department of Telecommunications (DoT), through a letter dated 07.09.2022, requested TRAI to reconsider its recommendations on Regulatory Framework for Over-The-Top (OTT) Communication Services dated 14.09.2020 and suggest a suitable regulatory mechanism for OTTs, including issues relating to 'selective banning of OTT services' as part of its recommendations.

Department of Telecommunications' letter mentioned that, "the humongous growth of OTT services in the recent past and these services having reached a matured stage, there is a need to holistically look into the various aspects of these services including regulatory, economic, security, privacy, and safety aspects.

This is also in keeping with para 2.2 of the National Digital Communications Policy -2018 which mentions the policy goal for "Ensuring a holistic and harmonized approach for harnessing Emerging Technologies' It has been mentioned therein that a policy framework for 'Over the Top'services will be developed."

In this regard, a Consultation Paper on Regulatory Mechanism for OverThe-Top (OTT) Communication Services, and Selective Banning of OTT Services, seeking inputs from stakeholders, was published by TRAI.

A violation of the 2016 Net Neutrality principles and guidelines, according to BIF, would result from recent telco claims that OTTs must pay for network usage costs and government intentions to impose telecom licencing frameworks on OTTs. This would give telcos the authority to slant the playing field in favour of one OTT over another, resulting in discrimination, stifling innovation, and having a negative effect on the startup ecosystem.

BIF has emphasised that as OTTs are currently regulated under the IT Act 2000 and other related legislation, additional regulations under the Telecom Law are not necessary, allaying fears of Telcos over security and lawful interception. BIF's counter-remarks come as an important step in the continuing discussion around OTT regulation in India.