With data services encompassing every aspect of our lives through OTT (over-the-top) services, the question of whether OTT apps should be brought under the ambit of regulation is looming large.
The symbiotic relationship between telcos and OTT players has played out well where the OTT has contributed to enhanced data usage in mobile users, while telecom service providers have been investing heavily in network expansion and upgradation. This has led to the debate about whether OTT should play its role in setting up network infrastructure by paying a fair usage charge to telecom providers.
Currently, there is no regulatory framework for OTT services.
Telecom regulator Trai had in 2020 recommended against any regulatory intervention for OTT platforms and advocated a market-driven approach. The first consultation paper to this effect was issued in 2015.
In August 2023, Trai again revisited the issue by coming out with a consultation paper on ‘Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services’. It is expected that recommendations will be out soon. In September last year, the government announced the draft Indian Telecommunications Bill, 2022. It proposed to regulate OTT communication apps through the Bill.
The war of words between telcos and OTT industry has been ensuing since then. Telcos have been arguing over ‘same service same rules’ and demanding that it be applicable to the OTT industry, including WhatsApp, video and audio streaming apps, and internet-based calling apps, among others. The OTT industry has been contesting this saying the services are not comparable. Apart from this, telcos have raised concerns about national security, the creation of a level playing field, and huge investments done by the telecom industry in network creation which also involves USO (universal service obligation) fund obligations. They have also raised the issue that unregulated OTT platforms fuel cyber fraud.The arguments are not restricted to the Indian market but have been in discussion at a global level.
Korea has been the first country to implement a network use fee for OTT players. However many analysts say the networks have become slower and the user experience is not up to the mark post levying a network use fee. In the US and Europe, the issue is being deliberated, though any final decision is yet to be made.
TRAI’s consultation paper mentions – BEREC (Body of European Regulators for Electronic Communications), set up by the European Commission found no evidence that OTTs are free riders saying that the OTT traffic is caused by and paid for by users. It also noted that the proposal (to charge OTT players) could present various risks for the internet ecosystem and the internet has proven its ability to adapt to changing conditions, such as increasing traffic volume and changing demand patterns.
Amidst all this, TRAI is walking on a tightrope. It needs to balance internet innovation to assist in India’s Digital Revolution, and at the same time keeping in mind national security and level playing field concerns of the telecom industry.