Govt not considering a revenue share model between OTTs and telcos

The central government is not considering enabling a revenue sharing model between over-the-top (OTT) players or apps and the telecom service providers for using the telcos’ networks for carriage of the apps, said a top official in the ministry of communications.

“There is no thinking of creating revenue sharing mechanism between telecom service providers and OTTs,” the official said, seeking anonymity. The official refuted reports suggesting that such a mechanism was in the works by the government. “There has been no proposal to that effect.”

For a while, telcos have been demanding a share of the revenues earned by OTT platforms considering that some streaming apps have started offering bandwidth-heavy services and generating disproportionately high traffic, which is forcing telcos to upgrade and enhance the capacity of their networks. Therefore, telecom service providers are seeking a contribution from the OTTs for network expenses.

In fact, Cellular Operators Association of India, which represents interests of carriers, has argued that large OTT players earn from consumers as well as advertisers, and hence suggested that a ‘fair share’ of revenues must be share with the telcos that do not earn from carriage fees for the content.

OTT platforms, represented by Internet and Mobile Association of India (IAMAI), have opposed the move terming the demands as unreasonable and argued that such a move will hurt the net neutrality rules announced by the ministry of communications in 2018.

The views, shared publicly, have also been shared with the Telecom Regulatory Authority of India (Trai) that recently floated a consultation paper on “Regulatory Mechanism for OTT Communication Services, and Selective Banning of OTT Services”.

Last week, Trai extended the date for submission of feedback till month end, following representation by stakeholders. The telecom regulator reportedly plans to issue a consultation paper on the regulation of OTT services.

The official said OTT across the board, including communication apps will be regulated by the ministry of electronics and information technology under the IT Act, and it was left out of the Cabinet-approved Indian Telecommunications Bill. “Anything to do with OTT will be in the IT Act. OTT will not be part of the new telecom bill,” the official added.

While the new telecom bill is likely to be taken up for passing during the winter session of Parliament, the IT Act itself is undergoing a revamp and will be refreshed as the Digital India Act, the draft of which will be brought out for stakeholder consultations by the end of the month.

“A balanced approach will be taken for the regulation of OTTs in the Digital India Act,” the official said. Livemint