It's fair for telcos to demand usage charges from OTTs says industry body COAI

After the Internet and Mobile Association of India (IAMAI) slammed it for raising the 'revenue sharing' demand for telecom service providers (TSPs), the Cellular Operators Association of India (COAI) on Monday said the telcos' demand for reasonable 'usage charge' from OTT providers is fair and rational.

The COAI reiterated its position that the demand of telecom operators for a reasonable 'usage fee' from OTT communication service providers for leveraging their networks to provide profitable services would aid in developing the country's digital infrastructure while contributing to the economy.

"Certain entities with vested interests are misdirecting the issue of the need for a regulatory framework for the communication OTTs and the need of usage charge to be paid by OTTs to the TSPs, by bringing in the aspect of net neutrality in a misleading manner, to make it a populist issue," said Lt Gen Dr SP Kochhar, Director General, COAI, without naming the IAMAI.

The COAI said that there seems to be a lack of appreciation of the fact that net neutrality pertains to the non-discriminatory treatment of content which has no nexus to the usage fee issue.

"Telecom service providers are committed to following the net neutrality principles, as per their license conditions, as also all other regulatory and security compliances which the TSPs undertake to safeguard consumer interest and security -- which OTTs presently do not," it argued.

The COAI has been advocating for a model where the sending party network pays (SPNP) model would allow telecom service providers to exploit internet businesses by formalising rent-seeking.

"The SPNP model would be a death knell for the digital economy and the creative ecosystem which it sustains," IAMAI had said last week.

Calls for an SPNP mechanism have re-emerged even though the demand for telecom services is entirely dependent on the ability of OTT services to attract users.

The COAI said that OTT platforms take a free ride on TSP-funded networks "without contributing to the setting up, operating and maintenance costs either directly or indirectly or for the expansion of networks".

In fact, many OTT communication players are contemplating/already charging subscribers a significant fee for verified accounts, adding further leads to their revenues.

"It is ironic that representatives of entities profiting themselves by levying charges on subscribers while riding free on the telcos' network are stating that paying for usage would effectively raise costs for users," commented Kochhar.

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