Telecom Bill leaves room for state discretion on OTT service classification

While the first reactions to the telecom bill tout that there is no coverage of OTT services in the law, a closer reading of the bill reveals that the state can use its discretion to classify OTTs as a telecommunication service.

This was one of the key controversial aspects of the bill when the government explicitly classified OTT (over-the-top) services as a telecommunications service during the consultation process of the bill.

Explicitly held
The definition of telecommunications services is absent from the bill, which in its 2022 draft was defined as “means service of any description (including broadcasting services, electronic mail, voice mail, voice, video, and data 6 communication services, audiotex services, videotex services, fixed and mobile services, internet and broadband services, satellite-based communication services, internet-based communication services, in-flight and maritime connectivity services, interpersonal communications services, machine-to-machine communication services, and over-the-top (OTT) communication services).” It can be clearly seen that OTT services in the 2022 draft were explicitly held to be under the ambit of the telecom bill.

However, the new bill, which has been passed by both houses, has retained its previous definition of telecommunications itself. This broader definition, as outlined in Section 2(p) of the bill, states that ”Telecommunication” is defined as the transmission, emission, or reception of any messages via wire, radio, optical, or other electromagnetic systems. This definition applies regardless of whether these messages undergo rearrangement, computation, or other processes at any stage during their transmission, emission, or reception.”

In essence, as an expert explained to businessline, the telecom bill grants the Government of India the discretionary power to classify OTTs as a telecommunication service if it chooses to do so.

Communication OTTs like WhatsApp, Signal, etc. have long held that they cannot be considered to be proxies for telecom operators since they do not own the internet networks through which these communications are held. Operators, however, long held that since internet communication companies were offering the same services as Indian telcos, they were obligated to follow the same rules as the telecom operators.

Publicly, the government has tried to distance itself from regulating OTT firms in the future. In the aftermath of releasing the bill, Minister of Communications Ashwini Vaishnaw told the media, “OTT has been regulated by the IT Act of 2000 and continues to be regulated by the IT Act. There is no coverage of OTT in the new telecom bill passed by the Parliament.”

Interpreting Vaishnaw’s comments, an expert said, “Definitional ambiguity in the bill means that the DoT is not looking to regulate OTTs in the short run. However, they are keeping the option open for the future.”

However, definitional ambiguity regarding OTT services means that concerns from tech firms regarding additional regulation stemming from the Department of Telecommunications are now a reality. The Hindu BusinessLine