The TRAI in November, 2018 released a consultation paper on regulation of OTT services. Yesterday, IFF made its submission on it.
Highlights:
- Licensing the internet: The proposals dangerously veer towards posing regulation on online services and platforms under a test of, “substitutability” with telecom services. The TRAI poses this may be necessary for continued investment in network infrastructure.
- Questions on policy and economic basis: We found from data that telecos are in a phase of intense price competition and these strains cannot be a justification for licensing or imposing regulatory burdens on internet services. This constitutes a faulty public policy proposal.
- Protect users, not telecos or platforms: At the same time we recognise the need for legislative action and regulatory action in the domains of privacy, consumer protection and competition law frameworks. When it comes to internet policy, internet users are the most important stakeholders.
On November 11, 2018 India’s telecom regulator, the Telecom Regulatory Authority of India (TRAI) released the consultation paper on Over-The-Top (OTT) Services. A consultation paper is the usual method how it, provides a background and draws in comments from the public prior to forming a policy position. To help greater engagement we made a brief summary of this paper.
A public consultation is an important exercise, it furthers transparency and engagement by people and stakeholders from different walks of life. For instance in the #SaveTheInternet movement for net neutrality in India more than a million people from all over India emailed TRAI and participated in an earlier public consultation.
The core submissions made in the #SaveTheInternet movement was to first protect net neutrality and second, to prevent licensing online platforms. Both of these objectives are tied to public welfare, better online services which provide value, innovation and protect the rights of individual internet users in India. Subsequently, the TRAI took a range of decisions from banning zero rated services, and making recommendations that become telecom licensing conditions to protect net neutrality. India in large credit to the stance of TRAI has become a world leader on net neutrality, though some concerns on its enforcement mechanism remain.
That said, the contentious issue of licensing of online service platforms and services remained. This was originally a proposal by telecom companies, which had argued in 2015 that they were suffering losses due to increased data use, and shift of users from SMS and Voice services to internet calls and messaging. This was subsequently shown to be incorrect as data revenues continued to rise. However, this proposal was still kept pending. Now, with the latest consultation paper on “OTT services”, which is a telecom industry vernacular the TRAI has again put the question of licensing and imposing regulatory burden on internet platforms and services.
This round of the stated justifications proceed on a slightly more nuanced basis however we fear their end would be the same. The TRAI has opened this round of consultations in the backdrop of falling revenues for telecom companies and the existing regulatory burden on them which may make continued investment in network infrastructure. At the same time with the growth of high speed mobile internet some would argue that 3G and 4G calling is, “substituting” voice calling and an SMS now being nothing more than a minority on smartphone usage which basks in the perpetual pings of internet messaging. This also comes against a backdrop of a growing, “tech-lash” in which sentiments of pessimism dominate the growing power of a handful of growing platforms. However, the basis for this consultation remains economic viability of the continued investment in telecom infrastructure.
Here, it becomes important to take a step back and examine the economic premise individually before we proceed to each issue with the specificity that it demands. To do this, we did a bunch of things. We first made a summary of the paper and released it on social media which brought in a wide diversity of views. The communities at Reddit and Twitter were particularly helpful. Next, we put out our presumptive views and then, separately an economic analysis. The economic analysis mapped the earnings of all major telecom companies on a range of metrics, juxtaposed a variety of industry analyst reports and even statements of their own company heads. We came to the clear conclusion that there is little which will be achieved by licensing or imposing regulatory burdens of the telecom industry on online platforms and services.
This all flowed into our submission to the TRAI.
Finally, we are aware that there is a regulatory need for intervention and even legislative action on online platforms and services. To us, this first, most immediately requires privacy protection. This has to include a comprehensive privacy law, but may also be supplemented by actions by the TRAI, particularly in the domain of surveillance reform as we have submitted often in previous rounds of submissions. There is also a need for India to examine the adequacy of its consumer protection and competition law frameworks as many countries are doing abroad. We again hope that India, the world's largest digital democracy can take the lead as it did in net neutrality. We are optimistic and hope 2019 will see us engage with the challenges of growing digitisation which at its root is providing immense benefit to millions of Indians, at work, play and home. A link to all our documents is contained below.
Link to our documents
- Summary and an analysis of the OTT Consultation Paper
- Financial spreadsheet of Telecos
- Submission on OTT Services to the TRAI
About IFF
- Work: The Internet Freedom Foundation (IFF) is a civil liberties non-profit working on technology and fundamental rights. We work across a wide spectrum, with expertise in free speech, digital surveillance and privacy, net neutrality and innovation to champion of human freedom in the digital space. To ensure that people in the world's largest democracy use the internet with liberty guaranteed under the Constitution of India.
- Transparency: We are a non-profit registered under Section 80G of the Income Tax Act. Aimed towards greater accountability to our donors who are ordinary internet users in India like you we have published detailed financial information that is updated regularly.