IAFI urges TRAI to allow market forces to respond to OTT services

IAFI in its comments to the Telecom Regulatory Authority of India’s (TRAI) Consultation Paper regarding the Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services, urges that the market forces be allowed to respond to the situation without prescribing any regulatory intervention for OTT services, and only specific regulatory interventions be made for achieving better consumer experience. Such regulatory intervention should ensure that all OTT platforms behave in a fair way online, noting that it links a large user base to a large number of businesses.

IAFI is against any “selective” or otherwise banning of OTT services in any form.

IAFI notes that TRAI’s the consultation paper already deals with the length and breadth of different aspects of OTT services. OTT services, as the name implies, operate over the top of the internet services provided by telecom service providers (TSPs). TSPs charge their subscribers the full amount needed by them to run their network and as such should have no further claim vis-a-vis OTT services, who provide services using the internet.

As per the guidelines already issued by the Department of Telecommunications (DoT):

• Internet service providers (ISPs) should not use any discriminatory tactics with respect to hosting of content.
• ISPs shall not charge different rates from different applications, websites and other content providers over the Internet to host their content and to make it accessible to the general public.
• The terms of various license agreements’ governing provisions of Internet services shall be amended to include provisions of non-discriminatory treatment, applications, exclusions and exceptions.
• The terms of license agreements shall also include necessary traffic management practices as formulated by the DoT.
• All specialized services as prescribed by the government, such as automatic driving, remote diagnosis, and all services running on IoT are excluded from the applicability of net neutrality. These services can be prioritised for faster internet lanes.
• All content delivery networks shall not be included within scope of any restriction unless directed by the government.
• All monitoring and enforcement functions shall rest with DoT.
• The licensee is prohibited from entering into any agreement or arrangement having the effect of discriminatory treatment of content.
• ISPs shall not engage in blocking, throttling or paid prioritization of any website or any content.

In effect, Net neutrality or network neutrality should ensure that all data on the internet should be treated equally by ISPs and governments, regardless of content, user, platform, application, or device.

In light of this, IAFI therefore strongly recommends that there is no need bring OTT communication services under any licensing/regulatory framework. However, some limited regulatory interventions may be needed to ensure interoperability amongst OTT platforms.

So far, India’s existing Competition Act, 2002 governs traditional Indian markets with digital market competition being outside its purview. The Standing committee on Finance (Ministry of Corporate Affairs), vide its 53rd Report (Dec 2022) have discussed various issues related to needs of ex-ante regulations to regulate the growing digital markets which are at a nascent stage. It has highlighted the need for having India’s Digital Competition Act which is being prepared by the Ministry of Corporate Affairs and the Ministry of IT.

It has been observed that under traditional telecom services, interoperability was an essential component. Different platforms were asked to provide suitable interfaces for a proper interconnect with other platforms. Such a mandated provision helped with the growing of different technologies and platforms in most competitive way resulting in a healthy penetration and adoption of telecom technologies in India. However, a similar interoperability does not exist amongst various OTT platforms.

IAFI has also noted that the impact on consumers due to lack of interoperability was the main focus of the recently implemented Digital Market Act (DMA) by the European Union. The Act also manages various other issues including some highlighted by TRAI in the consultation paper. It is observed that under traditional telecom services, interoperability was an essential component. Different platforms were asked to provide suitable interfaces for a proper interconnect with other platforms. Such a mandated provision helped growing of different technologies and platforms in most competitive way resulting in a healthy penetration and adoption of telecom technologies in India. However, a similar interoperability is not existing amongst various OTT platforms and such an interoperability will help further growth of OTT services. IAFI recommends that while there is no need bring OTT communication services under any licensing/regulatory framework, however some limited regulatory interventions may be needed to ensure interoperability amongst OTT platforms : Interoperability means the ability to exchange information and mutually use the information which has been exchanged through interfaces or other solutions, so that all elements of hardware or software work with other hardware and software and with users in all the ways in which they are intended to function. To ensure transparent interoperability, there is a need to create a ‘Gatekeeper’. The gatekeepers would be required to ensure, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same operating system, hardware or software features that are available or used in the provision of its own complementary and supporting services and hardware. Such access can equally be required by software applications related to the relevant services provided together with, or in support of, the core platform service in order to effectively develop and provide functionalities interoperable with those provided by gatekeepers. The aim of the obligations is to allow competing third parties to interconnect through interfaces or similar solutions to the respective features as effectively as the gatekeeper’s own services or hardware. The lack of interoperability allows gatekeepers that provide number-independent interpersonal communications services to benefit from strong network effects, which contributes to the weakening of contestability. In this process, to ensure interoperability amongst various platforms, adoption of necessary protocols which were should be mandated in India.

Consequently, IAFI is of the view that the “market forces may be allowed to respond to the situation without prescribing any regulatory intervention and no regulatory interventions are required in respect of issues related to the OTT services. IAFI is against any “selective” or otherwise banning of OTT services in any form. However, regulator should ensure that all these platforms behave in a fair way online, noting that it links a large user base to a large number of businesses”.

CT Bureau