Regulatory Mechanisms for OTT Services in India : Daily News Analysis

Date : 18/09/2023

Relevance: GS Paper 2- Polity & Governance- Regulation of Digital Media

Keywords: Telecom Regulatory Authority of India (TRAI), Internet and Mobile Association of India (IAMAI), OTT, TSP

Context-

  • In recent months, the Telecom Regulatory Authority of India (TRAI) has initiated a discussion regarding the regulation of over-the-top (OTT) communication services. This move has sparked debates and raised questions about the selective banning of popular platforms like WhatsApp, Facebook, and others. Telecom Service Providers (TSPs) are advocating for regulations due to perceived revenue losses, while others argue that such measures may compromise net neutrality.

Rise of the Streaming Industry in India

What are OTT Services?

  • An "over-the-top" (OTT) media service refers to an online content provider that offers streaming media as an independent product. This terminology is primarily associated with video-on-demand platforms, but it can also encompass audio streaming, messaging apps, or internet-based voice calling solutions. These services, which heavily rely on data usage, have witnessed a surge in popularity and widespread adoption in India, particularly during the Covid-19 pandemic.
  • In India, monthly wireless data consumption has experienced an astounding growth of approximately 156 times between 2014 and 2022. This transformation has resulted in a shift in revenue generation, moving away from conventional voice and SMS services towards revenue generated from data usage.

Background

  • Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules, 2021 pertaining to digital media and OTT platforms introduce a Code of Ethics that applies to both digital media entities and OTT platforms.
  • Streaming platforms like Netflix and Amazon Prime are required to categorize their content into five age-based groups: U (universal), 7+, 13+, 16+, and A (adult). Additionally, they must implement effective parental locks for content classified as 13+, and establish a robust age verification system for accessing adult content.
  • Digital media publishers delivering news content must adhere to the journalistic conduct norms outlined by the Press Council of India and comply with the Programme Code specified in the Cable Television Networks Regulation Act.
  • A comprehensive three-tier grievance redressal mechanism has been established:
  1. Level-I: Publishers are expected to engage in self-regulation.
  2. Level-II: A self-regulating body, headed by a retired judge from the Supreme Court or High Court or an independent eminent figure, will oversee complaints and concerns.
  3. Level-III: The Ministry of Information and Broadcasting will formulate an oversight mechanism and establish an inter-departmental committee responsible for addressing grievances. This body will also possess the authority to censor and block content when necessary.

The Draft Telecommunication Bill, 2022

  • The Draft Telecommunication Bill, 2022 is a proposed legislation that aims to replace three existing laws governing the telecom sector in India: the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950.
  • The draft law proposes including OTT communication services, such as WhatsApp, Signal, and Telegram, within the definition of telecommunication services.
  • It proposes that OTT communication services in India should acquire a license and comply with the same set of rules governing telecom players.
  • These rules encompass various aspects such as quality of service and security measures.
  • But recently, TRAI released a consultation paper inviting responses on the need for a regulatory framework for OTT communication services.
  • The paper also touched upon the possibility of selectively banning these services. Stakeholders have submitted their responses, with the deadline being September 1. TRAI is now poised to issue guidelines on whether OTT services should be regulated.

Selective Banning Initiative

  • The idea of selectively banning OTT services gained momentum following a notice from a Parliamentary Standing Committee to the Department of Telecom (DoT).
  • This call for action was prompted by concerns about the widespread influence and impact of these platforms. It's essential to note that this discussion pertains exclusively to OTT communication services like WhatsApp, Signal, Meta (formerly Facebook), Google Meet, Zoom, and others, not content-based OTTs like Netflix or Amazon Prime.
  • Content regulation falls under the jurisdiction of the Ministry of Information and Broadcasting (MIB).

Defining OTT and Cost-sharing Proposals

TRAI has also requested stakeholders to provide their definitions of OTT services and proposals for cost-sharing mechanisms between TSPs and OTT services.

The TSP vs. OTT Conflict

  • Telecom Service Providers argue that OTTs should be regulated and financially contribute because they rely on the telecom infrastructure developed over the years. Currently, they do not make direct contributions, leading to a decline in telecom companies' revenue streams.
  • These platforms offer a wide range of services, from multimedia messaging to voice and video calls, all delivered over the internet. This circumvents the need for traditional telecom services, particularly voice calls and text messages, resulting in a significant drop in revenue for telecom companies.
  • According to the Cellular Operators Association of India (COAI), which represents major telecom players like Jio, Airtel, and Vodafone Idea, OTT communication service providers benefit from TSP-funded networks without investing in digital infrastructure for access networks.

The Demand for Fair Share Contribution

  • COAI insists on a policy framework that ensures fair contributions from large OTT service providers to telecom network operators. This contribution, based on assessable criteria like subscriber numbers or data usage, would support network expansion and increase government revenue.
  • The Internet Service Providers Association of India believes that if OTT services are substitutable for licensed services, they should be subject to the same regulations.
  • However, others, such as the Internet and Mobile Association of India (IAMAI), argue against cost-sharing mechanisms that may lead to double charges for consumers and violate the principles of net neutrality, which advocate for equal treatment of all data transmitted over networks.

Arguments for Banning OTT Services

  • Proponents of banning OTT services argue that licensed operators should have the authority to selectively block these services if necessary.
  • They claim that OTTs can easily obtain customer location data, making access restriction more feasible when services are under license.

Advantages of OTT Platforms:

  • It is handy because the content is viewed at any time and from any location. A person with a smartphone and a decent internet connection can watch national and international films and television series of their choice.
  • The cost of a subscription is reasonable. You may view lots of online content for a thousand rupees per year or 200 rupees per month.
  • OTT platforms provide new and high-quality content. For OTT platforms, unique concepts and filming approaches are tested. The language barrier isn’t an issue because most sites have a range of multiple languages.
  • You can watch the video material on multiple devices at any time. It also has a download option, allowing you to watch your favorite movies even if your internet connection is poor.
  • OTT platforms offer an ad-free experience to viewers. Users won’t have to view the same advertisement over and over again, and they’ll be able to watch the show uninterrupted.

Disadvantages of OTT Platforms:

  • People with poor internet connections will not be able to enjoy a smooth viewing experience. Access to the Internet is also required because the materials are only available online.
  • Security and privacy are the two most pressing problems for OTT platforms. The information saved on their platform should not be exploited for illicit reasons, either during sign-in or in their search history.
  • Another issue with OTT services is the lack of censorship. Therefore, people of all ages particularly children are exposed to a wide range of content not suitable for their age.
  • People might quickly become addicted to OTT platforms due to the wide range of content offered, resulting in a limited social life.

Opposition to Selective Banning

  • IAMAI and the Broadband India Forum (BIF) are staunchly against the selective banning of OTT services. They argue that existing regulations, such as the IT Act, of 2000, and the Consumer Protection Act, of 2019, provide sufficient oversight.
  • Instead of banning, they suggest that OTT providers implement IT solutions to swiftly suspend services during internet outages.

Conclusion

The ongoing debate over the regulation and potential banning of OTT services in India highlights the complex interplay between telecom providers, internet companies, government authorities, and consumer interests. Balancing these concerns while upholding principles like net neutrality remains a significant challenge as India seeks to define its approach to the evolving digital landscape.

Probable Questions for UPSC Mains Exam -

  1. Discuss the key provisions of the Draft Telecommunication Bill, 2022, and its implications for over-the-top (OTT) communication services in India. How might its inclusion impact the regulatory landscape of the telecom sector? (10 Marks, 150 Words)
  2. Analyze the arguments put forth by Telecom Service Providers (TSPs) and their demands for the regulation of OTT services in India. Assess the potential consequences of implementing cost-sharing mechanisms between TSPs and OTT services on consumers and the principles of net neutrality. (15 Marks, 250 Words)

Source -The Hindu