Revenue sharing between OTT and TSPs to violate net neutrality, IAMAI

The Internet and Mobile Association of India (IAMAI) doesn’t want a scenario where the OTT (over-the-top) players have to share their revenues with the telecom service providers (TSPs). For the unaware, the Telecom Regulatory Authority of India (TRAI) recently floated a consultation paper on “Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services”. Some industry associations have called for the need to regulate OTT players and also indulge in a revenue-sharing model.

Background of the Matter
The basic argument is that if the OTT players are earning through the infrastructure that TSPs have built by investing all of their money, then the TSPs should be entitled to get a share of the revenues that OTT players are making. This has never happened in India since the time the internet first came. However, now, because the traffic that different OTT players get puts stress on the networks of the TSPs for which the TSPs have to invest on further to improve network capacity.

The TSPs are not happy with the fact that the OTT communication players such as Telegram, WhatsApp, and more offer voice calling, video calling and texting services on their networks to their customers without having the need to undergo any regulations from the government. While TSPs, who offer the same service, have to meet several regulatory norms and also pay statutory dues. Thus, the telcos have asked the government to bring the OTT players under regulation and also get a share of their revenues.

What Does IAMAI Think?
However, the IAMAI does not agree with the notion that the TSPs are pushing. In response to the TRAI’s paper, IAMAI said, “Such demands are based on the erroneous notion that OTT service providers consume bandwidth, and disregard the fact that not OTT players but consumers themselves independently transact and purchase data from TSPs.”

The association said that if you charge the OTT players a fee or get a share of their revenues, then the telcos will be earning twice for the same service. The TSPs have already charged their consumers to pay for the data, and then getting more revenues on top of it because they have traffic on their networks because of the OTT players is an absurd notion, as per IAMAI.

“Revenue-sharing mechanisms would essentially mean charging twice for the same service as consumers already pay TSPs for the data they consume. In any scenario, the amount of data that is consumed – and the resultant ‘pressure’ put on the infrastructure of TSPs – is directly dependent on the amount of data sold by telecom companies to consumers,” said IAMAI.

According to IAMAI, if the OTT players are asked to share their revenues with the TSPs, then it will hurt the Net Neutrality rules announced by the Ministry of Communications in 2018.

“Implementing revenue-sharing mechanisms would also mean adding a cost to accessing free or cheap content, which may eventually be passed onto consumers, thus raising the cost of internet usage. Prima facie, the ‘’collaborative frameworks’’ proposed in the consultation paper might lead to a violation of the net neutrality framework,” the body added in its response. Telecomtalk