Regulators

Broadcasters to TRAI: No further regulation of OTT communication services

Star India and others feel OTTs should not be seen as a substitute of TSPs

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MUMBAI: Major broadcasters including Star India, Sony Pictures Networks India (SPN) and Times Network are clear they do not favour any further regulatory intervention on over-the-top (OTT) communication services. All three players have argued that OTTs should not be seen as a substitute for TSPs. While submitting their feedback comments on the TRAI consultation paper, the broadcasters have highlighted that although some of the services provided by OTTs may seem similar to TSPs, they have highly dissimilar nature especially when it comes to technology and revenue model. The major focus area of the TRAI paper is the issue regarding the relationship between OTTs and TSPs.

Star India point of view

Apart from suggesting TRAI to not regulate OTT communication services, Star India has also highlighted that OTTs are licensed under Section 4 of the Indian Telegraph Act, 1885 and hence the regulator does not have the authority to regulate them.

The broadcaster feels that TRAI’s concerns around “Privacy, Security and Interception” are valid but the provisions under Information Technology Act, 2000 are already in place to address those. Moreover, the Justice BN Srikrishna committee is also working towards reinforcing the provisions under Draft Personal Data Protection Bill, 2018.

“The consultation paper assumes certain applications of OTTs (‘OTT Communication Services’) as substitutes to TSP services. This assumption appears unfounded and there is no discernible rationale in keeping with any existing legal criteria or technical parameters, such as those outlined in basic competition law on substitutability, for TRAI to have concluded so in the consultation paper,” the broadcaster points out with respect to “Substitutability” as the basis for regulating OTT ecosystem.

SPN’s take on the issue

SPN has strongly advocated for the forbearance of OTTs as it will ensure the growth of the sector. According to the broadcaster, any additional regulation could have an adverse impact on the growth of internet applications and platforms.

SPN has pointed out that the consultation paper mentions OTT players do not have licensing and regulatory obligations while TSPs incur license fees and have to meet regulatory obligations. The broadcaster, in its submission, has argued that the operation of OTT platforms is not dependent on TSPs but on the internet. In addition to that, the services being provided by the OTT platforms are free of cost, although consumers do bear the cost of data charges/internet which are accrued by TSPs and the revenues are not passed on to the streamers.

“We believe that no regulatory intervention is required since it could stifle innovation and straitjacket technological innovation and the development of this sunrise sector. A policy of forbearance on regulation [as has been the case so far] should be continued in order to avoid hampering growth in the sector,” SPN said in the submission.

At the same time, the broadcaster has also added that telcos should be given opportunities to avail fair market pricing as well as sufficient policy-backed impetus to enable them to invest in infrastructure and upgradation of technology.

Times Network bats for forbearance

On a similar note, the Times Network has also highlighted the differences between OTTs and TSPs. While voice calling and text messaging are the primary services of TSPs, the same are secondary services for OTTs. Moreover, there is an inherent difference in the technology used by OTTs and TSPs for calls and messaging. Hence, Times Network thinks the services cannot be classed as “similar services” from a licensing perspective.

“Further, TSPs as ISPs are access providers who control the underlying broadband access infrastructure, with few market players due to high barriers to market entry. By contrast, OTTs do not control the underlying broadband access point, have significantly lower barriers to market entry and are faced with many competing services, unlike TSPs. Consumers can add or stop using OTTs at will whereas switching between TSPs involves incurring the cost for the consumer and generally involves a longer relationship,” the broadcaster added in the submission.

Due to the palpable differences between TSPs and OTTs, Times Network believes OTT platforms should not be regulated on the lines of TSP. The broadcaster is also of the view that inter-operability of the OTT services with the services provided by the TSPs may promote competition and benefit the end users.

“We also recommend non-introduction/ non-imposition of any unwarranted regulations which may impede the growth of this buzzing as well as budding industry which has given a huge push to the start-up entrepreneurial spirit in the country. Also, interoperability of OTT apps with traditional network-based services may lead to a loss of innovative features and functions available on OTT services,” the submission also read.

As per Times Network’s outlook, any licensing norm for OTT would affect consumer welfare, individuals, companies and entire industries. It could also create entry barriers in the industry, especially for startups.

ZEEL also against the regulatory framework

ZEEL submitted its response to TRAI on behalf of its digital arm ZEE5. The growing online video player has also advocated complete forbearance on any kind of regulatory framework by the authority. It has also been added that OTT service providers are intrinsically distinct from network providers like TSPs and ISPs. Like other players, ZEE5 also thinks substitutability should not be treated as the primary criterion for comparison of regulatory or licensing norms applicable to TSPs and OTT service providers. It has also added that there is no issue of a non-level playing field between OTT service providers and TSPs providing same or similar services as both OTT providers and TSPs complement each other.

“The future of digital product offerings and growth of OTT services will depend on a robust environment which does not stifle technology-based innovation and provide a competitive market environment. Low entry barriers for new entrants, minimal regulatory barriers and technological advancement will be the cornerstone of such growth of the sector for investments, innovation, and consumer interest. Therefore, we urge the Authority that a policy of forbearance is best suited,” ZEE5 stated.

Most of the above-mentioned players agree that OTTs have helped in the growth of TSPs. As all the OTTs require high-speed internet, data usage increases among users which in turn help TSPs’ revenue. The decline in voice calls and messaging is being complemented by high data use helping telcos to recover the loss.

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