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OTT players must contribute toward creation of telecom network infrastructure

Telecom operators in India have long argued that communication over-the-top (OTT) players, such as WhatsApp and Telegram, should be brought under a regulatory regime to ensure a level playing field in the sector.

The three private operators – Reliance Jio, Bharti Airtel and Vodafone Idea – this week again made a strong appeal for this during a meeting with the chairman of the Telecom Regulatory Authority of India (TRAI), P.D. Vaghela.

ThePrint takes a look at the reasoning behind telecom companies wanting OTTs to be regulated.

‘Not un-equals’
The telecom companies, represented by the Cellular Operators Association of India (COAI), have previously reasoned that regulation of OTT players is needed for a level playing field among all technologies — ‘same service, same rules’ — to ensure fair and healthy competition in the industry.

According to COAI, services such as voice calls and video calls, whether provided by TSPs or the OTT apps, operate on the same layer, essentially riding on the network layer. “Since OTTs and TSPs provide the same voice/video/data communication services, they operate in the same situation, and hence should not be seen as un-equals,” the industry body had said in a press statement issued in October 2022.

It was also of the “firm view” that all OTT players (both communication and non-communication OTT providers) should meet the requirements of national security and consumer rights.

It has also pointed out that OTTs are free from a number of obligations TSPs have. These include a government-mandated process for allocation of right to use of spectrum, numbering resources, etc. by undertaking critical commitments in terms of deliverables defined by the licence agreement, and investing heavily in setting up networks.

Despite this, it’s argued, OTTs enjoy all the privileges of delivering the same services, without having to bear any of the regulatory obligations, security obligations, investment or network requirements.

“In fact, regulatory disparities exist presently in provision of essentially same communication services between TSPs, who are subject to various regulatory obligations such as security, QoS, subscriber verification, anti-spam, strict compliance required under unified license provisions instructions, various audits, etc., and OTT communication service providers who are not subjected to any form of regulation. This seriously dents the level playing field in the market,” the COAI said.

Going a step further, the COAI, in a letter dated 25 November 2022 to Department of Telecommunications (DoT) secretary K. Rajaraman had sought the setting up of a regulatory framework that would enable the operators to charge a ‘usage fee’ from communication applications such as WhatsApp, Telegram, Signal and Google Duo.

The letter suggested that, “OTT players pay to the TSPs for use of TSP network for providing their OTT services to the customers in a fair and equitable manner by way of an equivalent of ‘usage charge’ for the actual traffic carried by these OTTs on TSPs’ network which can be easily measured.”

This charge, the industry body said, should be mutually agreed between the TSPs and OTT players, and should ideally be paid to the TSPs directly. Additionally, in case OTT players and TSPs do not agree on the ‘usage charge’, then an appropriate licensing and regulatory framework should be in place that governs the contribution of OTT players towards the creation of network infrastructure, it said.

In a separate note, issued to the media in December, the COAI had said that OTT players are ‘free riding’ on the TSPs’ networks while using the TSPs’ consumer base for monetising their services and earning massive profits and benefits.

The note said, “Apart from investing massive amounts in creating the network infrastructure and incurring huge operational expenses in terms of meeting various regulatory compliances, TSPs also pay exorbitant levies and taxes in terms of Licence Fee, Spectrum Usage Charge (SUC), GST, etc. On the other hand, OTT communication service providers, who are enjoying huge direct/indirect benefits and revenues by utilising the TSPs’ networks, are not subjected to such taxes and levies, thus causing loss to the government exchequer.”

It added that, “TSPs have contributed an amount of approx. Rs 17,627 Cr. towards Licence Fee and Rs 7,073 Cr. towards Spectrum Usage Charges (SUC) for the FY 2021-22 alone.”

OTTs’ ask
This followed a letter by another industry body to the DoT, Broadband India Forum (BIF), representing technology companies such as Meta, Google, Amazon and Microsoft, which countered the COAI’s demand in December 2022. The BIF said that if the concept of paying network access charges is to be accepted, the telcos should also pay the OTT platforms.

The BIF argued that OTTs are not free riders and are actually responsible for more than 70 per cent of the telco traffic, and that “the revenues earned by the infra provider should also be shared with the entity using it in the same proportion.”

On its part, the government had, in November 2022, introduced a draft telecom bill wherein it proposed bringing OTT platforms within the ambit of telecom services that require a licence to operate. However, the central government has also proposed in the draft bill that it would have the power to grant exemptions from the requirement for a licence if it’s in the public interest to do so.

During a conference after the release of the draft bill, telecom minister Ashwini Vaishnaw, in reply to a query on the licensing of OTT apps, had said that these are already covered under regulation under the Indian Telegraph Act as the interpretation of ‘telegraph’.

“What is already telegraph – from the interpretation of the service you use today … is it telegraph? It is not. But over time, the first of all the services you use, it is interpreted under the telegraph…what we build in 2022, we need to consider the reality of 2022. This has been done to bring clarity,” Vaishnaw had said.

Recently, Vagehla, in an article for a magazine, said it was important that the critical aspect of security, both for the nation and law-abiding citizens, not be overlooked while dealing with OTTs.

“The alarmingly rise in cases of fraud and scams on OTT platforms make it imperative to focus on the security and privacy of the users. OTTs adhering to the security requirements like KYC, as done by telcos, will help prevent and counter this menace effectively, as the culprits can be identified and traced for taking appropriate legal action.The draft telecom bill aptly provisions penalties and punishments for perpetrators of such unlawful activities via communication OTT platforms,” he wrote.

He pointed out that while telecom services are monitored, OTTs can upgrade or downgrade their services. “Therefore, it is only a reasonable ask that OTT players contribute towards the creation of the telecom network infrastructure in India,” he said. Theprint

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