Netflix, Amazon Prime and Hotstar are next in line to face new regulations in India

TRAI Chairman, RS SharmaBCCL

Telecom regulator Trai on Monday said the scope of its consultation process on over-the-top applications (OTTs) is limited to examine if there are any regulatory imbalances between telecom service providers (TSPs) and OTT players and will see if it can come out with a regulation or recommendation or order on the issue in the next one month.

"This paper has limited scope and TSPs have been saying there is a regulatory imbalance because OTTs also provide same or similar services. TSPs are governed by a different set of obligations under their licensing conditions which are, however, not applicable on the OTTs, therefore there is a demand to check this regulatory imbalance," Telecom Regulatory Authority of India (Trai) Chairman R S Sharma said here while participating in an open house on the issues of OTTs.

"So, this consultation paper is focussed on this aspect as the central issue. The central theme of this paper is concerning the regulatory imbalance between these two set of services which are similar or substitutable. We have received large number of comments and counter-comments and we will come out with our recommendations or regulations or order in a month's time," Sharma added.

Sharma's views comes amid reports that the regulator could come out with a separate consultation paper on video OTTs like Sony Liv, Hotstar, Netflix, Amazon Prime, and Voot among others to regulate them in future. Sharma declined to comment on this.

Asked if Trai would focus on a separate consultation paper on the video part or the video OTTs, he said: "We are not talking about the type of applications."

He said the issue of OTTs also intersects with a number of other issues like data localisation, national security, data privacy, data portability and inter-operability.

If Trai issues recommendations then it will need the Department of Telecom's (DoT) approval before being implemented but if it comes as regulation then its application starts immediately.

Telcos have been demanding a level playing field here with regard to OTTs who don't have to face any regulation as the telcos. Reliance Jio in its presentation said OTT providers have their servers outside India which leaves Indian security agencies powerless to exercise their rights.

So some sort of regulatory framework needs to be evolved so that national security and privacy issues are addressed.

State-run BSNL says OTT applications have taken over the data space in a big way and are now directly competing with the basic telecom being offered by TSPs.

Vodafone says a new framework should be implemented that encourages innovation but which is also strong enough to protect consumers and ensure that there is a level playing field in relation to the same services.

Airtel stressed that currently TSPs and OTT communication service providers offer the same services such as voice. While TSPs are subject to a number of regulatory and licensing requirements, such as payment of licence fee, taxes and security conditions, OTT communication service providers have no such obligations.

Earlier OTTs or Over-The-Top (OTT) services were limited to Whatsapp, Hike, Skype and Viber. But with the popularity of streaming video content and TV channels, Video OTTs have also started playing out on telecom networks in a big way.

The regulator had sought the industry's views on which OTT services should be regarded as the same or similar to those offered by telecom operators, and if "substitutability" should be the main criteria for comparison of regulatory or licensing rules applicable to TSPs and OTT service providers.

OTT services refer to applications and services that are accessible over the Internet and ride on an operator's network.

Trai has, however, made it clear that the scope of its current consultation would be on regulatory issues and economic concerns pertaining to those OTT services that are "same or similar" to the services provided by telecom service providers (TSPs).

Its discussion paper is aimed at analysing and discussing "changes that may be required in the current regulatory framework to govern these entities and the manner in which such changes should be effected."

It has also asked whether "regulatory or licensing imbalance" is impacting telecom investments especially required for capacity expansions and technology upgradations, and how OTT service providers can participate in infusing investment in telecom networks.

Trai has also asked if there are issues surrounding lawful interception of OTT communication that need to be resolved in the interest of national security and whether responsibilities of OTT service providers and TSPs should be distinct.

Another issue being debated is whether there is a "non-level playing field" between OTT providers and TSPs and the regulator has sought suggestions on whether regulatory or licensing norms should be imposed on OTT service providers to fix such regulatory imbalance.

Telecom companies in India have long been demanding that OTT players be brought under the ambit of the regulatory framework, as they offer similar services without attached licencing obligations, conditions and levies (such as licence fee). However, OTTs argue that a regulatory regime for them would stifle innovation.

T.V. Ramachandran, President, Broadband India Forum (BIF), however, on the issue of regulation of OTT services demanded by TSPs said: "BIF believes that OTTs are not gatekeepers and do not control broadband access. They also do not own or control network infrastructure. Hence there is no case to regulate them. Any attempt to regulate them would only stifle their innovative, ultra-low cost services to the public and thus harm society and the economy."
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