OTTs must pay up | The Financial Express

OTTs must pay up

If OTT services are being allowed to use the infrastructure that was set up by telcos, for a level playing field, telcos must also be exempt from archaic regulations that the OTTs are not subject to

OTTs must pay up
Over the top (OTT) services have risen fast in the digital age today, providing various services to the users.

By SP Kochhar

Imagine the expansive Indian Railways network, which spreads across the length and breadth of the country, connecting the farthest regions and carrying millions of passengers every day. This enormous network has been created through massive investments, efforts and hardships, weathering difficult terrains of all sorts, topographical challenges, and whatnot. Now,let’s assume we suddenly have a new breed of service providers, who want to use this network to carry passengers from one place to another, but without the burden of having to invest in creating this crucial infrastructure, taking responsibility for the timeliness of the travels, or even being accountable for the safety and security requirements to be met, as is done by the Railways as a regular part of their deliverables. Would it be fair?

Curiously, this is something being demanded in the domain of voice, video, and messaging services being delivered to the users of telecom services across India. Over the top (OTT) services have risen fast in the digital age today, providing various services to the users. Some of these services, also termed as OTT communication services, are offering similar voice/video calling and messaging services to their users as the telecom service providers (TSPs). Therefore, the principle of “same service, same rules” as well as common sense dictates that these communications OTTs be brought under the same regulatory and security conditions as the TSPs. If they are not brought under an appropriate regulatory regime, then the licence conditions and regulatory obligations for the TSPs should be removed to ensure a level playing field. Otherwise, the clear messaging is that TSPs are subjected to archaic regulation and security conditions which are no longer valid, and that is why OTTs are being exempted. The government of India, in its continued pursuit of progressive and reform-led initiatives, proposed inclusion of OTT communication services in the draft Indian Telecommunication Bill 2022, recently released by the department of telecommunications. However, certain quarters with vested interests representing the BigTech and OTT players, are lobbying for undue advantages for communications OTTs under some misrepresented notions and flawed arguments.

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Though technicalities behind the assertions made don’t mean much, the public is being misinformed that telecom services and OTT applications do not operate within the same layer. But the truth is that communication services such as voice/video calls and messaging, whether provided by the TSPs or the OTT apps operate on the same layer, essentially riding on the network (IP) layer.Consider the fact that TSPs go through a long and expensive process to acquire spectrum while undertaking critical commitments in terms of deliverables and adhering to strict regulatory compliances. They also invest a colossal amount of money in building and maintaining the network infrastructure. This is in addition to paying exorbitant operational costs, levies, and taxes in the form of license fees, SUC, GST, etc., which amount to more than 30% of their revenues. Meanwhile, OTT communication services not only use TSPs’ networks to provide the same services, but also gain substantial direct and indirect benefits from them, while not having to bear any of the obligations. This is simply unfair.

Ironically, the revenues gained by OTTs by providing their services to the Indian citizens are not subjected to taxes and levies like TSPs, thus causing losses to the government exchequer while filling the coffers of companies based outside India. Would it not be just that the revenues gained from Indian citizens accrue back to the government under a regulated regime, as applicable to all industries? Think about the humongous amount of bandwidth consumed by OTTs which puts tremendous pressure on the TSPs’ networks. For instance, a study by Frontier Economics estimates the costs attributable to traffic from leading OTTs on European telecom networks to the tune of a colossal €40 billion per year. So, it is only fair that OTTs invest and contribute towards this massive infrastructure development cost, including contribution to the Telecom Development Fund proposed in the draft Bill. Moreover, under the current regime, several security provisions such as KYC of subscribers, maintaining call detail records (CDR) and internet protocol detail records (IPDR) and sharing them with law enforcement agencies, fraud detection under Telecom Analytics for Fraud Management and Consumer Protection (TAFCOP), audits for compliance of security related requirements, etc, are applicable for TSPs. These requirements have been enacted after due deliberations and oversight from the relevant agencies and have evolved over time to keep pace with the advancements in technology. Hence, they cater to a critical need—safeguarding national security.

When a subscriber gets a service like voice/video call, irrespective of whether it is engineered by OTTs or TSPs, the environmental security requirement remains the same. A differential treatment to any one provider opens a backdoor to circumvent the above security requirements. Lack of regulation and accountability on this crucial aspect could have serious implications in terms of national security. The lives and safety of Indian citizens and soldiers protecting us on the fronts may get compromised, which is not desirable at any cost.

With the advent of new technologies and advancement of the telecom ecosystem, it is only logical that the new Telecom Bill brings OTT communication services under a proper regulatory framework, as required for any legitimate sector. It is time for the OTTs to assume responsibility and contribute towards the creation of the infrastructure they utilise to deliver their services.

The author is Director-general, COAI

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First published on: 19-11-2022 at 04:30 IST