IAMAI, BIF reject telcos’ demand to regulate OTTs, charge ‘fair share’

Net neutrality is back to being a contentious topic after India’s top telcos sought to impose a ‘fair share’ charge on over-the-top (OTT) services, while industry bodies and civil society organisations are pushing back on the demand.

Telecom service providers Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) have told the Telecom Regulatory Authority of India (TRAI) that large traffic generating (LTG) OTT players should pay telcos for telecom network costs based on the traffic these platforms generate and other such parameters. However, many believe that this proposal can dilute net neutrality principles and drive smaller players out of the market, limit user choice, etc.

Net neutrality encompasses the idea that internet service providers (ISPs) and telecom companies should treat all online traffic equally, and refrain from any form of discrimination or favouritism towards specific websites, applications, or online services.

The Internet and Mobile Association of India (IAMAI) stressed that OTT Services are comprehensively regulated, and robust regulatory frameworks for digital service providers already exist in India, notably under the IT Act, IT Rules and DPDP Act. The industry body added that introducing a telecom regulatory regime for OTTs would be over-regulation. In addition, a revenue-sharing agreement requiring the largest OTT service providers to pay TSPs for data used by consumers would lead to TSPs effectively charging twice for the same service – as they already charge consumers for data, its statement said. Such a mechanism where the OTTs pay the provider would disincentivise growth for OTT-based businesses.

The Broadband India Forum (BIF) said the demand for network usage fees from OTTs by telecom operators is outdated and would violate net neutrality principles. In a statement, BIF President TV Ramachandran said overregulation of OTTs would be “counterproductive” as it would lead to a higher cost on consumers 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,” he said.

“Telcos wish to cling to an old, legacy, and obsolescent system of ‘Sending Party Network Pays (SPNP),’ prevalent during the voice telephony era of the 1990s,” he stressed, adding that the internet operates differently.

The Information Technology Industry Council (ITI) said that OTT services are not substitutes for traditional telecom or broadcasting services, but are additives.

“OTTs provide bundled services that cannot be separated out into “OTT Communication Services,” “OTT Broadcasting services,” etc. making defining OTT overall or subsets of OTT for regulatory purposes near impossible. However, the functions of these services are already regulated under the IT Act,” the ITI said in its counter comments. It added that OTT services and TSPs have a symbiotic relationship as the content provided by OTT service providers drives demand for network services and in turn benefits TSPs in increased data usage.

The Alliance of Digital India Foundation said the telcos’ demand is “grounded in the misperception that OTTs are benefiting without making any contributions, while TSPs are burdened with infrastructure and licensing costs.” It added that a volume-based revenue-sharing system could impede the sustained expansion of digital enterprises, and introduce an additional cost associated with accessing free or affordable content.

The Consumer Unity & Trust Society (CUTS) International said OTT services are already subject to a myriad regulations under the IT Act and the various rules, which will likely continue under the forthcoming Digital India Act.

“Additional regulation of OTTs through proposed means like licensing, would potentially stifle innovation and hinder economic growth, and could also have implications for privacy and data protection of consumers. This could have a chilling effect on investment and entrepreneurship in an emerging sector,” it said.

“TSPs may discriminate between OTT services that pay them and those that do not and block or slow the content of OTT players that do not enter into cost-sharing arrangements with them. This can impair consumer choice available to consumers for accessing services they desire,” it said.

The Internet Freedom Foundation said the “same service, same rules” argument (for things like voice calling and messaging) seems to be driven “by an instinct to regulate the internet per se from the lens of TSPs rather than to satisfy any regulatory need.”

However, the Cellular Operators Association of India (COAI), whose members include the TSPs, said in a statement that it is “concerning to see such misleading and speculative views being promoted by certain quarters, with an intention to misguide and confuse the people regarding the idea of the proposed ‘Fair-Share’ charge”.

COAI Director General SP Kocchar said that the proposed fair share charge does not affect access to an open internet. “The content and services for consumers would remain fully accessible with no traffic management/differentiation. Further, there will be no throttling, no blocking and no paid prioritization for any service/application irrespective of the fair share charge paid,” he said. PTI