Regulatory Mechanisms for OTT Services


    Syllabus: GS2/Government Policies and Interventions


    • The Telecom Regulatory Authority of India (TRAI) recently invited responses to a consultation paper released on a regulatory mechanism for over-the-top (OTT) communication services. 


    • The paper mentions the selective banning of OTT services, the discussion on which came after a Parliamentary Standing Committee suggested exploring this option due to the unrest caused by these platforms which have mass reach and impact.
    • It is important to note that only OTT communication services like WhatsApp, Signal, Meta, Google Meet, Zoom, X, etc. were discussed in the consultation paper and not the ‘content’ OTTs such as Netflix, Amazon Prime etc.
      • Content regulation is an altogether different subject and it comes under the ambit of the Ministry of Information and Broadcasting (MIB) and not the TRAI.
    • The TRAI has also asked stakeholders to define OTT, and a proposal on cost-sharing mechanisms between Telecom Service Providers (TSPs) and OTT services.

    What is the Conflict Between TSPs and OTTs?

    • Telecom Service Providers are of the opinion that OTTs should be regulated and charged because they use and thrive on the infrastructure built by operators over the years. Currently, they aren’t.
    • OTT communications services have led to erosion of revenues for the telcos. 
      • These platforms offer users an array of services (MMS, instant messaging to voice and video calls) which circumvents the need for traditional telecom services, particularly voice calls and text messages, leading to a significant reduction in the revenue streams of telecom companies.
    • OTT communication service providers neither contribute to the exchequer nor make investments like the TSPs in the spread of network infrastructure in the country. 
    • The OTT communication service providers take a free ride on TSP funded networks without contributing to the setting up and maintaining digital infrastructure for access networks.

    What is the Demand?

    • There should be a policy framework to enable fair share contribution from large OTT service providers to telecommunication network operators based on assessable criteria like number of subscribers or data usage. 
    • To ensure fairness and compensate for the increased data demands, OTTs should pay a fair and reasonable fair share charge to TSPs.
    • The funds received by TSPs from OTTs will support the expansion of networks and enhance contribution to the exchequer. 
    • OTT services should be considered as the same services offered under the telecom licence granted by the Government.
    • All OTT services should be governed by the same set of rules irrespective of whether they are provided by an operator on its own network or through the internet.

    What is the Argument for Banning OTT Services?

    • OTTs obtain the location of the customers and can easily bar access. Once the OTT communication services are under license this barring will be much easier to implement. 
    • TSP’s networks are capable of selectively blocking the OTT subject to details like IP addresses provided by the Competent Authority.
    • The IAMAI believes that there is no need to implement additional regulations governing OTT services, or even a regulatory framework for the selective banning of OTT services, as they are adequately regulated under the existing IT Act, 2000, Consumer Protection Act, 2019, and other associated Acts and Rules.

    Source: TH