At a time when the government is discussing over network usage charges for OTT communication apps like WhatsApp, Signal, Telegram etc, advocacy group CUTS International said such regulations must protect consumer interest as unreasonable regulations will affect them.
One of the arguments put forth by the organisation is that cost-sharing arrangements between telcos and OTTs might prompt the latter to pass on the costs to the consumers, thereby making consumers pay for both network access to telcos and service usage charge to OTTs. Besides, smaller OTT players may not be in a position to pay such charges to the telcos, it said.
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“The consumer voice has been missing from the debate on OTT regulation. Regulations are aimed at preserving and enhancing consumer interest. Any change must prevent unintended adverse consequences on consumers, and should be beneficial for them,” said Amol Kulkarni, director of research at CUTS International.
On February 28, FE reported that the department of telecommunications is working on a proposal to bring communication-based apps under some form of regulation where they pay an interconnect usage charge (IUC) to telecom operators for using their networks. A token one-time licence/registration fee may also be levied on such operators. However, it’s not clear at this stage whether such apps would need to pay a licence fee on a recurring basis as a percentage of their adjusted gross revenue.
Further, the telecom Bill is also expected to have provisions related to making communication-based OTT apps liable to pay to an extent they use the telecom network.
According to CUTS, in order to meet additional costs, OTT service providers may be forced to redirect investments planned towards expansion, enhancing consumer experience, and improving quality of services. This redirection of planned investments may adversely impact consumer welfare.
Lately, telcos have been strongly favouring regulation of OTTs. According to Cellular Operators Association of India (COAI), there should be one service-one rule as only telcos are made to pay licence fee to the government and be saddled with a host of regulations while the apps are free to ride on their networks without paying any licence fee and be free from any kind of regulations.
In a counter argument, Kulkarni said, “creating a level playing field between OTT service providers and TSPs (telecom service providers) by subjecting both to similarly stringent regulations may not be right approach. To the contrary, there is a case to rationalise the regulatory framework for TSPs by doing away with unreasonable requirements they are subject to”.
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According to CUTS, the government needs to give clarity with regard to the regulations for OTTs. The organisation believes that any additional regulatory requirements would act as a barrier to entry for potential players, which would impact the competition and innovation in the market.
“Any change from the regulatory status quo for OTT service providers should pass the tests of legitimacy, necessity, and proportionality, and by subject to cost and benefit analysis,” CUTS said,