Over the top: To regulate OTTs or not?

A light-touch regulation that imposes responsibility on OTT service providers on their service offerings and privacy norms is warranted.

Over the top: To regulate OTTs or not?
The second important aspect is the Unsolicited Commercial Communications (UCC) regulation that is in force for TSPs since 2007.

By Kartik Raja & V Sridhar

Recently, the Telecom Regulatory Authority of India (TRAI) issued a consultation paper on “Regulatory Framework for Over-The-Top (OTT) Communication Services,” for which it is soliciting inputs from all the stakeholders. Although there was an earlier consultation paper in 2015, this one addresses specifically the OTT communication services that can be regarded as the same or similar to the services provided by the licensed telecom service providers (TSPs). The focus of consultation is restricted to communication services, such as Voice over Internet Protocol (VoIP), and peer-to-peer and multi-party messaging and video. These services provided by OTTs may substitute or complement the services offered by TSPs. Hence the test of substitutability, which is commonly used for assessing whether a service similar or the same to another might not hold true.

By definition, OTT services operate at the application layer over the internet protocol and are independent of the underlying physical network—mobile, landline or satellite. It is often assumed that any service quality difference one notices is entirely due to the underlying network characteristics. While this may be true in most cases, OTT service providers can also tune various parameters to affect the quality of services rendered. For example, Netflix—the global media-services provider—admitted in 2016 that it has been slowing down its video speeds on several wireless carriers, including Verizon and AT&T, for five years, in order to “protect consumers from exceeding mobile data caps.” On the other hand, OTT service providers have been using content delivery networks (CDNs) to speed up their services.

In all possibility, these will escape traffic-shaping rules that define “Net Neutrality,” including in India, as these are not perpetrated by the underlying common carriers. What is more important is that the consumers who are affected do not have appropriate redressal mechanisms similar to what are present in the case of licensed TSPs. Hence, along the lines of the Quality of Service (QoS) benchmarks set by the regulator for TSPs, QoS metrics and benchmarks need to be defined for OTT services as well—a light-touch QoS regulation for OTTs is applicable.

The second important aspect is the Unsolicited Commercial Communications (UCC) regulation that is in force for TSPs since 2007. Although the regulator has not been completely successful in stopping UCC despite implementing measures such as Do Not Disturb (DND) registry, and DND app for consumers, there are penalties associated with UCC offences. Even in the recent 2018 notification on UCC, the focus is on messages and calls sent by the telemarketers and delivered by TSPs. Although one might argue that OTTs do self-regulate in stopping UCC on their platforms, the “fake news forwards” and unwanted advertisements have come to haunt us.

Additionally, the independent consent registrar responsible for maintaining customer consent acquisition, registration and verification in the case of UCC regulation is critical to ensuring the privacy protection of Indian consumers. It’s time OTTs are brought under UCC regulation due to their large-scale adoption. Otherwise, we will be left with a regulated UCC for limited TSP messaging and a self-regulation for the burgeoning OTT messaging.

The third aspect is regarding the emergency and safety services that are provided by TSPs on a priority basis, as implemented in 911 or Enhanced 911 in the US for a long time. Although such stringent quality regulation is not present in India for emergency services, when you dial the number 112, it is the responsibility of the originating carrier of the call to connect to the nearby ambulance, fire and police departments. This feature is absent on OTTs. In the US, the emergency services provisioning is extended beyond wireline and wireless carriers to Interconnected VoIP service providers that generally permits users to receive calls that originate on the public switched telephone network (PSTN) and to terminate calls to PSTN.

Since OTT services need not interconnect with PSTN, they are not obliged under regulation to provide emergency services. In addition, while third-party services exist that enable OTT service providers to provide emergency services, it is not mandatory. As TSPs have now been allowed to provide unrestricted internet telephony, it’s time we define whether emergency services should be provided only by carriers or also by Interconnected VoIP providers (i.e. TSPs who provide VoIP services) and OTT service providers.

Regulators worldwide are struggling to bring OTTs into any form of regulation as they are typically non-jurisdictional in nature. Further, they constantly innovate and bypass or create new ways to circumvent the regulatory barriers. Most of the internet companies are trying their best not to come under the ambit of the EU General Data Protection Regulation by shifting user registries to servers located in Ireland.

While command-and-control regulation of OTTs is definitely not advised, a light-touch regulation that imposes responsibility and liability on OTT service providers on their service offerings and privacy norms is definitely warranted.

Raja is founder & chairman, Phimetrics; Sridhar is professor, IIIT Bangalore

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