We send counter-comments to the terrible proposals of Telecom Companies in TRAI's #OTTConsultation #SaveTheInternet

In November 2018, TRAI released a consultation paper on the regulation of OTT services (basically online platforms and services). We submitted comments on 8th January 2019 and our counter comments yesterday night, i.e. January 21, 2019.

Highlights:

  • Licensing the Internet: The proposals pose a test of substitutability to assert that OTT and TSPs (telecom companies) provide similar services and that they should be regulated similarly. They say this is necessary for continued investment in network infrastructure.
  • Questions on policy and economic basis: We found from data that the economic stress on telecos comes from the intense price competition they face due to extremely low prices of their competitors. There is also no clear data on the amount of investment needed in the sector. To pose regulation for internet services in the absence of not only causation, but even a credible correlation to economic losses of telecom companies is a harmful public policy choice.
  • Protect users, not telecos and platforms: We call for legislative action and regulatory reform in the domains of privacy, consumer protection and competition law frameworks. When it comes to internet policy, end users are the most important stakeholders. TRAI's consultation queries fall outside the jurisdictional scope of telecom regulation. At the same time we suggest that it must conduct a specific consultation on interception and surveillance reform in the telecom sector.

Analysis

In their consultation paper on Over-The-Top (OTT) Services, released on November 11, 2018, India’s telecom regulator, the Telecom Regulatory Authority of India (TRAI) resurfaced the issue of licensing of online services and platforms. We and others in the throes of the #SaveTheInternet movement made a clear demand that this should not be done. However, this proposal was today again surfaced as an issue which required a fresh round of consultation in a more structured manner indicating the need to protect the revenues and continued investment in the telecom sector.

To help you better understand this paper we made a brief summary and then we made a presumptive analysis and an economic analysis.

Following this, IFF filed its comments with the regulator on January 8, 2019. We submitted that the paper set multiple faulty premises to pose queries and was thereby representative of inaccurate information which would lead to problematic regulations. To summarise:

  • Firstly, the paper has applied a reductive definition of digital applications to catch them in a regulatory net, which will hamper end-user experience. They base their definition on a test of ‘substitutability’ which puts forward that these services are ‘functionally similar’ and therefore should be regulated the same. This test ignores context and would thereby also allow airplanes and trains to be regulated the same despite functioning in different contexts and thereby having different regulatory requirements.
  • Secondly, it tries to argue that the regulatory imbalance between TSPs and OTT service providers is the reason that the telecom sector is under economic stress. This however is inaccurate as, one, the OTT services drive revenue for TSPs because of increased data charges and two, the economic stress is because of intense price competition between network providers.
  • Thirdly, they address interoperability, lawful interception and emergency services and what OTT service providers should be regulated to do within these categories. With interoperability, we believe it should be regulated by competition law and consumer protection frameworks as it is outside TRAI's mandate. Interception is a big issue in our country as we lack a proper privacy code to protect internet users and as a result in our comments we submitted that it was vital to establish this first before OTTs are required to do things like remove encryption. With emergency services, we believe that OTTs shouldn’t be mandated to provide these services because of the reductive definition applied meaning that a larger group of services would be pulled into this mandate unnecessarily.

Our submission to the TRAI can be found here.

In our counter comments, we have focussed our time on summarising the positions of service providers which happen to be telecom operators and an industry body which represents them. We have engaged and responded to arguments made by telecos that OTTs should have the same regulatory burdens imposed on them and maintained our stance of prioritizing the end-user, ensuring that freedom of speech and expression and your right to privacy are maintained.

Our counter-comment submission can be found here.

Link to our documents

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