The over-the-top debate ends here | The Financial Express

The over-the-top debate ends here

The communication service apps provide a rich interactive platform service for either minimal charges or free to the consumer, which is vastly different from the tariffed vanilla voice and data connectivity of the telcos. How can we equate the two?

The over-the-top debate ends here
The European Union Regulator, BEREC, has extensive experience with OTTs.

The debate on telco vs OTT has raged in India for over seven years. Recently, however, it turned turbulent. The telcos/ISPs now demand inclusion of ‘OTT communication services’ in the proposed Telecom Bill 2022 in the licensing category like telcos, on the pretext of ‘same service, same rules’ and ‘level-playing field’. The telcos allege that OTTs are taking a ‘free ride’ on their infrastructure and should pay an access charge. This is an interesting argument but thinking this way leads to a lose-lose situation.

The European Union Regulator, BEREC, has extensive experience with OTTs. After investigating the matter thoroughly, it appropriately referred to OTTs as Content and Application Providers (CAPs). BEREC found that CAPs invest heavily in internet and content delivery network infrastructure that exist beyond the borders of the telco network. The regulator is obviously referring to the innumerable data centres, CDNs, thousands of miles of undersea cables and, of course, a huge investment in software and content—certainly, there is nothing free about it.

The fundamental point is telcos are like ‘pipes’ that bring ‘water’, i.e., content, to consumers. The two complement each other; neither can exist without the other. However, it would be bizarre for the pipe to claim to be more important than the content. The value of both pipe and content came through with overwhelming force during the pandemic. We were able to survive only because of all the OTTs available—for conferencing, healthcare, education, work, and commerce, flowing through the pipe. It is unthinkable for us to have sustained without all the OTTs/CAPs, including OTT communication service apps.

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The argument of, “Same service, same rule” is a red herring. On one hand, the telcos rule supreme with exclusive rights of interference—free spectrum, interconnection, right of way, unique numbering resources, and more, whereas OTTs have none of these rights or resources. As Trai pointed out in 2015, “an OTT provider can be defined as a service provider offering ICT (Information Communication Technology) services, but neither operates the network nor leases network capacity from a network operator.” Moreover, as per both DoT and Trai, the OTTs or CAPs operate in the application layer whereas telcos operate in a different network layer.

The communication service apps provide a rich interactive platform service for either minimal charges or free to the consumer, which is vastly different from the tariffed vanilla voice and data connectivity of the telcos. How then can we equate the two services? It is as ludicrous as demanding that, since the bullock cart, bicycle, and automobile all provide ground transportation, they should be equated and subjected to the same licensing and traffic rules. The 2015 DoT Committee had found that “OTT application services are not similar to licensed communication services thereby precluding the possibilities of regulatory arbitrage… between licence service provider and OTT application service provider… The Committee believes that for OTT application services there is no case for prescribing regulatory oversight similar to communication services.” It is apparent that the telcos’ voice and data offerings cannot be considered to be substitutable with OTTs. This warrants a clear and differentiating definition for ‘OTT Communication Service’ to distinguish this from the telco offering.

The concept of level-playing field is derived from Article 14 of our Constitution which guarantees equal treatment to all. However, there is adequate case law to show that such equal treatment is available only to those who are equally situated. In fact, there is adequate case law that unequals are not only permitted to be treated unequally, but also have to be mandatorily so treated. It is also indicated that equal treatment to the unequal is nothing but inequality. In short, we cannot compare apples to oranges by saying it’s unfair. Similarly, OTTs/CAPs have to be treated differently from telcos/ISPs.

Also, it is not as if OTTs are without any regulatory oversight. They have always been governed by MeitY and the Information Technology Act, 2000, IT Rules 2021 etc as well as the Competition Commission of India, CCI. The OTTs merely want that anything further that is sought to be done within the above framework, a fair and reasonable ask.

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Regarding the telcos’ demand for an access charge for use of their network, BEREC declared that “ultimately, it is the success of the CAPs which lies at the heart of the recent increases in demand for broadband access or, from a different perspective, traffic growth beneficial to ISPs.” Trai also has stated that “the Authority is of the view that increasing revenue realisations from data services due to increasing internet traffic will not only compensate for the loss of conventional voice traffic but will also increase the revenue potential…” (2017). It should also be remembered that TSPs enjoy Trai’s ‘forbearance’ on tariff policy and so are free to charge whatever is justifiable. There should be some measure of gratitude towards the OTTs for a major chunk of their data traffic and business sustainability. Nothing stops telcos from offering competitive OTT services or from innovating business models like the OTTs/CAPs did. May both tribes continue to prosper through rich service offerings to customers.

The writer is Hon. FIET (London) and president, Broadband India Forum. Views are personal.

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First published on: 01-11-2022 at 04:00 IST