OTTs are not free riders on telecom infrastructure, counters BIF

A day after the Cellular Operators’ Association of India (COAI) urged government to empower telcos to levy usage charge on OTT (over-the-top) players, the industry representative of Big Tech companies contended that it should be the other way around.

In its letter to telecom secretary K Rajaraman, the Broadband India Forum (BIF) said OTTs are not free riders on telecom infrastructure and are actually responsible for more than 70% of the telco traffic. The telcos owe their infrastructure utilisation to the OTTs and should be indeed grateful to them, it said, adding that in the absence of OTT players, their networks would have remained idle.

On Tuesday, COAI wrote to the telecom secretary regarding inclusion of regulations related to usage charges for OTTs in the draft telecom Bill. The association has been pushing for the need of a compensation from OTTs for using the infrastructure of telecom companies and earning profits indirectly. “Any person (OTTs) using telecommunication services/infrastructure/network setup/provided by an authorised entity (TSPs) must pay reasonable usage charges to such provider,” SP Kochhar, director general of COAI, had said in the letter.

BIF, however, has called out such arguments regarding payment from OTTs as misleading. In its version of argument, BIF said that the concept of paying for the use of infrastructure is an excellent concept. However, the revenues earned by the infrastructure provider should also be shared with the entity using it in the same proportion.

Going by the concept of compensation regarding use of infrastructure, BIF argued that the infrastructure for any communication network also includes data centres, under sea cables, content hosting centres, content delivery networks, etc, which are built by the OTT platforms. “If the concept of paying network access charges is to be accepted, the telcos should also pay the OTTs for all the above (infrastructure). Given the cost of the other infrastructure is far greater than the cost of the access network, it is quite likely that telcos may end up paying to the OTTs besides sharing their revenues with them,” BIF said in its letter.

BIF also gave reference of a recent report by the European Union telecom regulator BEREC, which said there was no evidence that OTTs ride freely on the network of telcos as the costs for internet connectivity are typically covered and paid for by internet service providers. The BEREC report also expressed concern that direct compensation from content and applications like OTTs could endanger the principle of net neutrality.

Since OTTs account for driving majority of the revenues by telecom companies, they should be named as Rich Interactive Applications or Content & Applications, BIF said. Financial Express