Industry bodies urge TRAI to exclude OTT players from licencing regime

In response to the Telecom Regulatory Authority of India’s (TRAI) consultation paper seeking inputs on service authorisations under the Telecommunication Act, 2023, telecom operators are once again pushing the regulator to bring over-the-top (OTT) players under a licencing or authorisation regime, as they provide similar services to those offered by mobile phone operators, industry bodies said on Monday.

Several industry bodies, including the Internet & Mobile Association of India (IAMAI), Asia Internet Coalition (AIC), Nasscom, Broadband India Forum (BIF), and US India Strategic Partnership Forum (USISPF), have cautioned against this through their comments and counter-comments submitted in response to TRAI’s consultation paper on the ‘Framework for Service Authorisations to be Granted Under the Telecommunications Act, 2023’. There will be an open house discussion on August 21.

“IAMAI, in its counter-comments, has said that OTT services are not within the scope of the Telecommunications Act, 2023, highlighting that when the Telecom Act was introduced in Parliament, Ashwini Vaishnaw (the then Telecom Minister) clarified that ‘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 Parliament,’” said IAMAI in its statement.

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Further, it said that OTT services are comprehensively regulated in India under the Information Technology Act, 2000 (IT Act), the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules), and the Digital Personal Data Protection Act, 2023 (DPDP Act).

They are also required to comply with the Consumer Protection Act and Rules for consumer welfare, as well as the Competition Act for economic regulation. IAMAI’s submission also reiterated that OTT services are inherently different from telecom service providers (TSPs). From a technical perspective, TSPs operate on the network layer, while OTT providers operate on the application layer, it said.

Therefore, there is a clear distinction in the operational and technical nature of OTT service providers and TSPs. Clarifying that OTT services do not “free ride”, as they are significantly driving the revenues generated by TSPs, it is the demand for online content and applications provided by OTT providers that is driving an increase in the demand for Internet access supplied to consumers by TSPs.

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TRAI, in its Consultation Paper ‘Regulatory Mechanism for OTT Communication Services, and Selective Banning of OTT Services’, rightly recognises the contribution of OTT service providers to the growth in revenue of TSPs, it added.

Nasscom’s counter-comments have also stated that OTTs are not covered under the ambit of the Telecommunications Act, 2023. There is no need to bring OTTs under Service Authorisation and impose any additional regulatory burden on them. It also said that the public clarification provided by Vaishnaw, clarified that OTT services are excluded from the scope of the Telecommunication Act, 2023.

“OTT Communication services are covered under the new Telecom Act as an access service. All such statements by these few stakeholders (TSPs) are incorrect, motivated by their narrow commercial interests, and devoid of any basis. The majority of stakeholders have not even mentioned this as an issue for discussion,” BIF said.

The stakeholders supporting this measure are seemingly driven by their individual commercial interests to reduce their regulatory burden and compliance costs at the expense of broader industry growth and consumer benefits, it said.

“The larger motive seems to be a reduction in competition. None of these stakeholders have taken into consideration the adverse impact that such a pan-India unified service authorisation is likely to have on smaller and niche service providers who offer specific services in specific service areas,” BIF added.