A Tip on OTT and the Telecom Bill

The Indian Telecommunications Bill, 2022 | Photo credit: KAMAL NARANG

The inclusion of Over The Top or OTT (communications services) as part of the Indian Telecommunications Bill, 2022 which was recently unveiled for public comment is a feature that has attracted a lot of attention and comments . What does it mean? And why is this such a big deal? Is this a concern only for telecom operators and technology companies? Or are there bigger implications that concern the average citizen? Moreover, how will this affect the digital ecosystem in India?

The main argument behind its inclusion is the “same service, same rules” principle. At first glance, it seems logical that communication services, whether provided by telecom operators or OTTs, should be treated the same. However, this is completely wrong. The same service means that as a user I should be able to substitute one for the other at my own will. But no OTT provider, including those who provide communication services such as WhatsApp, Zoom, email, etc., can reach a customer without the intermediation and services of a telecom service provider. But the reverse is not true. The absence of OTT does not prevent a telco from providing its services. OTT communication services are value-added communication applications or services that rely on the basic communication services provided by telecommunications operators. The latter falls within the domain of transport and the former within the domain of applications such as group communication and video, encryption, etc.

So why do telecom operators want OTT communication services to be included in the new telecom bill? It is quite simply the desire to preserve the arbitration that exists between voice and data tariffs. In OTT services, the telecom operator gets lower data, not a higher voice/SMS rate. This arbitration is in any case doomed to failure and will be extinguished as soon as possible. Biting the bullet now makes more sense than introducing a convoluted interpretation of the law.

Heavy or light regulation

Conversely, there are compelling arguments as to why OTT communication services should be excluded from the scope of telecommunications law that regulates land transport. OTT communication services are already covered under the existing IT Act and presumably will continue to be covered under the proposed Digital India Act. Whether it involves encryption, data storage, interception, or cooperation with law enforcement, OTTs can and are regulated, but not licensed or pre-licensed.

So why should there be so much shouting if OTT communication services are moved from the scope of computer law to telecommunications law? Simply put, the proposed Telecommunications Bill and the current Telegraph Act are based on the principle that the provision of telecommunications services is the exclusive privilege of the government, except to the extent that private entities are permitted – read licensed or authorized. On the other hand, the Computer Act, which regulates the use of technology, is based on the exact opposite: everything is permitted, except what is specifically and explicitly prohibited and subject to mandatory requirements that must be met. . A similar principle applies to content, which the Ministry of Information and Broadcasting, Prasar Bharti and the Censor Board regulate. It is precisely this wide latitude in technology/applications and content that enables and encourages creativity, innovation, new products and venture capital funding.

More worrying is that the influx of venture capital funds to OTTs would be strongly discouraged. It is almost impossible to distinguish an OTT communication service from another OTT platform because every OTT platform such as Flipkart, Ola, MakeMyTrip has an integrated messaging element. How do you distinguish between an OTT communication service provider and any other OTT platform or service that includes communication services? It is an impossible task. Only lawyers would celebrate the legal quagmire that would result from such an attempt.

What if only the communication component of OTTs were regulated? This would be equally problematic because requiring a license or authorization for an element inherent in the activity of a platform would amount to controlling the entire activity. Innovation licensing is a contradiction in terms.

Another factor is that the Telecom Bill will only impact India-based OTT players. Those operating from overseas would not be impacted. This would seriously handicap Indian service providers vis-à-vis their foreign competitors. Do we want this? It is no coincidence that the exclusive privilege of the government is limited to transport limited to geographical limits.

Regulating OTT communication services

The bottom line is that the inclusion of OTT communications service providers under the Telecoms Bill is a deeply misguided idea that could seriously undermine the energy, innovation and funding that characterizes the industry today. ecosystem of Indian startups. Hardly any other country has equated OTT communication services with core telecommunications services. Instead, the government would be well advised to include all the controls deemed necessary in the soon to be unveiled Digital India Act.

Rentala Chandrashekhar is President of the Center for The Digital Future, former Secretary of IT and Telecommunications and former President of the National Association of Software and Services Companies (NASSCOM)