In this report, we outline what telcos Airtel, BSNL and Vodafone-Idea said about TRAI’s public consultation on the regulation of OTT services. OTT Service Providers are abbreviated to only OTTs in the report. Some of these points have been edited and paraphrased, while those quoted are as is from the submissions. 

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Question 1: Which service(s) when provided by the OTT service provider(s) should be regarded as the same or similar to service(s) being provided by the TSPs. Please list all such OTT services with descriptions comparing it with services being provided by TSPs.

Airtel (Q1 & Q2):

  • Substitutability of services should be treated as the primary criterion for comparison of regulatory and licensing frameworks between TSPs and OTT service providers. Historically, voice and video calling and messaging services were provided only by TSPs, but high speed broadband has made it possible for OTTs to provide their services on mobile.
  • Wants EU’s definition of OTT services adopted in India
  • Social media and gaming apps should not come under OTT because they’re not substituting voice/video calling or messaging. Their category could be decided on a case to case basis.
  • The definition of OTT should be flexible enough to bring in more substitutable services without “stifling any technological innovation”, periodically review the definition based on market evolution, tech developments, innovations and the extent of substitutability.

BSNL

  • OTT services providing Voice calls, Video calls, SMS, MMS, any messaging service and Audio/Video Conferencing services are regarded as similar to those being provided by traditional TSPs in India.
  • OTT players have developed apps with various features, and they use the existing infrastructure of traditional TSPs, they don’t have their own extensive infrastructure to reach to their customers.

Vodafone-Idea

  • All services provided by OTTs under telecom licenses/authorizations [UL(access)/UAS, NLD, ILD, ISP, and in particular, voice, audio/video conferencing and messaging should be regarded as the same.
  • It supports the definition in the EU framework of “interpersonal communications services.”
  • The same services should cover the services currently provided by TSPs, but also potential future services. The definition of OTT needs to be finalized “to cover it as any service that may substitute or supplement telecom services as permitted to licensed telecom operators under license conditions from time to time.”
  • OTT players could also be competing vis-a-vis the broadcasting, IPTV licenses.

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Question 2: Should substitutability be treated as the primary criterion for comparison of regulatory or licensing norms applicable to TSPs and OTT service providers? Please suggest factors or aspects, with justification, which should be considered to identify and discover the extent of substitutability.

BSNL

  • Yes. “OTT communication services are rapidly substituting the traditional telecom services by offering low cost (or no cost) alternatives. This is resulting in decline of demand for traditional services causing revenue loss in voice and messaging services. There has been significant decline in traffic for domestic SMS, international SMS and international calling because of OTT services being provided at almost no cost.”
  • Data traffic on the rise due to OTT usage and TSPs are “forced to invest upgradation of their networks disproportionate to the revenue being earned from data traffic, as in India, the charges for data services are dirt cheap and tariffs are not being regulated.”
  • “It can be argued that there has been an increase in data revenue of the TSP, however, the same is far from sufficient to compensate for the corresponding decrease in revenue because of decline in the traffic due to substitution of conventional services like voice & SMS.”

Vodafone-Idea

  • “Yes, interchangeability/substitutability (from the point of the consumer and/or consumer usage) should be the primary criteria. This is supported by the European approach which makes it clear that if a product is substitutable it should be treated in the same way, whether funded by money or data.”
  • Substitutability of existing TSP services alone should not be treated as the primary criterion, for comparison. Potential new service areas such as digital content and advertising should also be considered.
  • Other things to be considered: benefits of OTT over similar services by TSPs, charges of OTTs (nearly free, monetised through ads or leveraging customer data) over TSP data rates, switching cost (no barriers to porting data), entry barrier (TSP entry in to traditional OTT revenue streams such as Advertising are constrained by Licensing and Data Privacy guidelines.)

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Question 3: Whether regulatory or licensing imbalance is impacting infusion of investments in the telecom networks especially required from time to time for network capacity expansions and technology up gradations? If yes, how OTT service providers may participate in infusing investment in the telecom networks? Please justify your answer with reasons.

Airtel

  • OTT leads to higher consumption and network capacity utilisation, popularity bringing more customers to the network
  • TSPs have been augmenting network capacities to cater to traffic from OTTs
  • Increased revenues leading to higher investments in TSP networks

BSNL

  • Yes. “… several other mandatory expenses due to regulatory and licensing regime give OTT services an unjustified advantage over the traditional TSPs.”
  • It explains: TSPs need to bear the cost of spectrum allotment charges, spectrum usage charges and taxes, they also need to adhere to rules and regulations of the licensor and the regulator for compliance, OTTs are not governed by any regulatory or licencing regime, “these entities are free to work without such control”, TSPs have to bear regulatory and QoS compliance and are heavily penalised for not meeting benchmarks, they have to invest in customer acquisition and maintain data records for government directions, and hence there is a regulatory imbalance.
  • “The OTT players are giving direct competition to TSPs without having level playing field.” This will impact TSP investment plans, impede efforts to upgrade networks.
  • “This regulatory and licensing imbalances can be fulfilled by bringing OTT service providers under the regulatory framework. Moreover, OTT players may be asked to compensate TSPs for use of their network over and above the data charges paid by the customers. The pricing mechanism may be evolved for URL based charging or bandwidth/ data volume consumption based charging.”

Vodafone-Idea:

  • Yes, regulatory and licensing imbalances are impacting infusion of investments in the telecom networks.
  • TSPs bear the cost of spectrum acquisition, high licensing and taxation regime with heavily regulated business operations, while the unlicensed OTT players have no such restrictions, barriers or costs.
  • TSPs have continuing demands for investments to improve their services (in particular, to install broadband, increase network capacity and network quality, particularly w.r.t data to the high growth of data traffic) to cater to growing OTT traffic.
  • Unless TSPs rollout networks, OTT players will not flourish and grow.
  • “For the TSPs to invest in broadband infrastructure, they must have a sustainable business case, which would not be possible if OTT players are able to compete on non-level playing field and are subject to a different set of rules.”
  • The principle of Same Service Same Rules/Protection is imperative to ensure a level playing field and conducive growth environment.
  • “The methods in which OTT players can participate in infusing investment in telecom networks include OTT players sharing the USO find requirements and the cost of licensing.”

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Question 4: Would inter-operability among OTT services and also inter-operability of their services with TSPs services promote competition and benefit the users? What measures may be taken, if any, to promote such competition? Please justify your answer with reasons.

Airtel

  • No mandate for interoperability between OTTs and TSPs because it will hinder innovation in OTT

BSNL

  • The inter-operability of OTT services with TSPs services will promote healthy competition and benefit the users.
  • “Concerning OTTs, their level of openness depends on their competitive advantages and on their strategies. The inter-operability among OTT providers may also be beneficial to users, however, it may again create imbalance in ecosystem with TSPs.”
  • “Moreover, there may be technical challenges in interoperability among OTT service providers.”

Vodafone Idea

  • “Inter-operability among OTT services or inter-operability of their services with TSP services is not currently necessary to promote competition.”
  • Switching between (OTT) services is restricted not by interoperability, but by the operating system and device used. OTT players often have proprietary technologies or protocols and are not subject to common standards.
  • Trying to mandate inter-operability may neither be practical nor desirable.
  • Only TSPs should have interoperability, the inter-operability of OTT to OTT and OTT to TSP services should be left to mutual agreement and market forces.

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Question 5: Are there issues related to lawful interception of OTT communication that are required to be resolved in the interest of national security or any other safeguards that need to be instituted? Should the responsibilities of OTT service providers and TSPs be separated? Please provide suggestions with justifications.

Airtel

  • “… we see no reason why OTT service providers providing communication services should be exempt from contributing to the same requirements.”
  • While OTTs use telecom networks,

– They deploy strong encryption, TSps cannot decrypt content and meet the requirement of national security
– Due to switching and other infra installed outside the country, unencrypted content can only be intercepted in the switching systems outside the country
– So users’ personal and sensitive data like calling patterns, message content, available on servers outside the country
– KYC details maintained outside the country
– “The untethered nature of the OTT communication services, high level of encryption and non-availability of switching servers in India, makes it extremely difficult for the Government agencies to ensure lawful interception or protect consumer privacy.”
– regulatory mechanism needs to be implemented which will ensure national security and consumer privacy, must include LIM and protection of customer privacy and sensitive data.
– “Requirements for OTTs

  • provisioning of LIM
    – Compliance with data privacy requirements
    – compliance with the security requirements stipulated in the Unified License such as installation of switching nodes within India, maintenance of critical and sensitive data within India
    – Maintenance of commercial records/call detail record (CDR)/exchange detail record (EDR)/IP Detail Record (IPDR)
    – meeting all requirements related to traceability of subscribers
    – procedures for sharing customer details with the Law Enforcement Agencies (LEAs)
    – Compliance to IT Act, 2000
    – Compliance to the proposed data privacy law”

BSNL

  • “… safeguards should be instituted in the interest of national security and to mitigate any other serious economic and criminal offences.”
  • “Without mandating security safeguard for OTT players, the crucial information’s (sic) would be untraceable.”
  • OTTs do not have mandates for complying with various security conditions providing interception and data to law enforcement agencies like TSPs.
  • “The OTT players are separate/ independent entities and are merely riding over TSPs networks. TSPs network has no role except carrying and delivering data packets from end to end users.”
  • “To ensure security compliance by OTT service providers, they may be mandated to install their application servers in India and provide the data/ logs/records etc. similar to as already being provided by TSPs to LEAs.”

Vodafone-Idea

  • “Lawful interception requirements should be applied to both TSPs as well as OTTs to enable security agencies to get the required information. Since the OTT players are having their own switching and encryption, the onus of details on messaging through OTT should be on OTT players.”
  • “The TSPs as a part of the security conditions under license are required to ensure that no use information is sent outside India.
  • The OTT services on the other hand store the customer data and information on servers hosted outside India. This creates an anomaly between competitors and is an area that needs urgent clarity to provide level playing field to TSPs.”
  • “Restrictions on the free flow of data should be removed while at the same time ensuring that interception requirements may be imposed on OTT services in addition to TSP services.”

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Question 6: Should there be provisions for emergency services to be made accessible via OTT platforms at par with the requirements prescribed for telecom service providers? Please provide suggestions with justification.

Airtel

  • OTT services cannot be subjected to provision of emergency services as mandated to the TSPs because they are not interconnected to the PSTN network.
  • May be feasible to have a centralised emergency response centre by OTTs, which can be connected to “112” deployed by various states.
  • OTTs can route traffic to response centres deployed by security agencies without making it mandatory.

BSNL

  • “Yes, it shall be mandatorily to provide the emergency services to be made accessible via OTT platforms at par with the requirements prescribed for telecom service providers.
  • As in case of distress whatever service is accessible to general public may be helpful in getting relief, it should be fundamentally accessible on OTT platform as well.”

Vodafone-Idea

  • It suggests that the provision of emergency services by OTT players may be desirable but may not be mandated at this stage.
  • “There should however be complete transparency to the consumer with regard to emergency number calling. OTT services which are offered as substitutes for traditional services should be required to inform subscribers whether or not emergency calling is possible and if not provided, should inform users how to use traditional services to make emergency calls.”

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Question 7: Is there an issue of non-level playing field between OTT providers and TSPs providing same or similar services? In case the answer is yes, should any regulatory or licensing norms be made applicable to OTT service providers to make it a level playing field? List all such regulation(s) and license(s), with justifications.

Airtel (answering Q7 and Q8)

  • To ensure level playing field and protect competition, it is important to have Same Service Same Rule policy. TSPs build telecom network, OTTs provide voice, video calling and messaging only using internet/broadband by TSPs.
  • OTTs regulatory requirements should also be limited to the extent of provisioning of services.
  • Bring OTTs under light licensing regime:

– lawful interception
– localisation of consumer sensitive data
– consumer privacy and security – OTTs should be subject to Standard Operating Systems (SOPs) to ensure protection of Indian customers from illegal interception or misuse of sensitive data, should be held liable in case of data breach at their end.
– subscriber verification/KYC-  “.. OTT services are offered in an untethered manner in which the ID of the OTT customer may be different from the ID of the mobile/broadband customer.” Proper KYC verification for meeting national security. providers should make sure that users are discouraged from using false IDs “which can not only cause a threat to the national security but can also disturb peace and harmony in the society.”
– traceable ID of users: responsible for developing a mechanism for “collecting and storing authentic IDn of all users so that the security agencies can track the end user in case of any
violation of rules and regulations prevalent in the country.”
– maintenance of CDR etc
– SPAM and unsolicited communication adherence
– compliance to TRAI Act and Directions, IT Act, 2000, data privacy law “at any point of time”
“OTT communication authorisation under the unified license.”

BSNL

  • Yes. “.. OTTs are left to play freely without any security, licensing, regulatory and QoS compliances contrary to the TSPs thereby creating an imbalance which can be fulfilled by bringing these OTT players under same regulatory framework in line with the TSPs so as to have a level playing field.”

Vodafone-Idea

  • It suggests that a USO levy may be applied on OTTs and the TSPs should be exempted from the same as they are already investing in their networks through the acquisition of spectrum and meeting rollout obligations.
  • OTTs are not required to pay a license fee on same /similar Messaging, Voice and Video services offered by them…. TSPs are at a significant tax disadvantage in these growth areas compared to OTTs.
  • “Either the licensing costs of TSPs including license fee [and spectrum fee] must be equally applicable to OTTs or alternatively and more preferably, this tax should be removed and instead subsumed with GST (which will be equally applicable to OTT players).”
  • “This is particularly important as the regulatory regime widens to include OTT players, which increases the enforcement burden and costs on the regulatory authorities and which will otherwise be funded by TSPs alone.”
    • Data Localisation – ‘For TSPs, user information cannot cross the borders of the country. TSPs are unable to utilize any shared global infrastructure even in a secured environment. This impacts time to market and costs of deploying services.’ “In case of OTTs, the same infrastructure is leveraged globally giving them huge synergies of scale, allowing them to expand rapidly. Restrictions on cross border data flows should be removed.”
    • Lawful Interception – “the OTT players must be brought under the ambit of National security and public interest regulations (including lawful interception, access to data/records etc). OTTs could be required to set up a nodal office in India to ensure better enforcement.”
    • KYC, MNP, UCC, QOS requirements – “OTT players must be brought under the ambit of consumer protection regulations. The stringent QOS obligations on TSPs should be reviewed and lightened.”
    • Telecom Tariff Orders (TTOs) – TSPs should be allowed to offer OTT tariff packs in the market.
    • Net neutrality – TSPs should also be allowed to offer differential QOS and monetize their services.
    • On the proposed Data Protection and Privacy Bill: TRAI has already recommended that the OTT players need to be brought under the same rules as licensed TSPs w.r.t data protection and privacy.
  • Tax neutrality – “It is therefore eminently desirable that the licensing and regulatory regime be light touch for all.” The concept of sector specific taxes should be reviewed. Subsume the license fee and spectrum usage charges into the GST regime, to provide a simple a level playing field between TSPs and the OTT players.
    • Consumer protection neutrality
    • Apply the same consumer protection, data protection and privacy rules to both TSPs and OTTs, whether those services are funded by payment or data.
    • Allow cross border transfer of data on same terms to both TSPs and OTTs
    • The discussions on a national data protection and privacy law are already underway and we believe that the provisions under that law should/would apply to both OTT players as well as TSPs. The specific provisions under license pertaining to privacy and data protection should be reviewed and be replaced with a cross reference to the data protection law, as and when announced.
  • Security Neutrality: The same security requirements for OTTs in relation to communications services, lawful interception and encryption. “OTTs should be required to have a physical nodal presence in India to facilitate lawful interception requirements”
  • Commercial Neutrality: For OTT communication services, TSPs should be allowed to offer OTT packs, OTT platforms which act as digital bottlenecks should be prohibited from imposing unfair commercial practices on their business users and should be transparent towards consumers.
  • Reduction in Regulatory Burden for TSPs – “Regulatory Obligations and Costs linked with Quality of Service, Rollouts Customer Protection, subscriber Verification, Enhanced Security, Obligation of Interoperability on TSPs etc. reduce competitive ability of the TSPs in many which ways including market access, innovation, investment etc. thereby impacting consumer choice between OTT and services of TSPs. The cost of compliance, therefore, needs to brought down significantly for this reason also. The penalty regime also needs to be reviewed. At the same time, the requirements need to be reviewed for the digital age.”
  • Net Neutrality: The net neutrality principles should be the same for TSPs and OTTs. TSPs should also be allowed to differentiate (QoS) and monetize services.
  • Incentivize Investments in Networks – TSPs should be provided the incentives to invest in their networks, by way of reducing spectrum costs. OTTs which use TSP network should be required to contribute to the USO fund as they are under the new EU communications framework. 

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Question 8: In case, any regulation or licensing condition is suggested to made applicable to OTT service providers in response to Q.7 then whether such regulations or licensing conditions are required to be reviewed or redefined in context of OTT services or these may be applicable in the present form itself? If review or redefinition is suggested then propose or suggest the changes needed with justifications.

BSNL: TRAI needs to examine it in details.

Vodafone-Idea:

  • Rules need to be reviewed and lightened to be uniformly applicable to all, so that the two competing sets of players operate under a balanced and uniform regulatory framework/regime.
  • The licensing framework needs to be overhauled to make it future-fit and to encompass the new set of players of the digital eco-system.

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Question 9: Are there any other issues that you would like to bring to the attention of the Authority?

Vodafone-Idea

  • OTTs should be required to constantly re-engineer their Applications to minimize capacity demands on networks.
  • TSPs should get reports on regional traffic and User forecasts in order to plan network investments for any surge in traffic.
  • “Ensuring there is a right for competent authorities to request information from platform providers in order to monitor/review the market. Platforms which enable business users to provide services to consumers should be required to be more transparent and unfair commercial practices and blocking of competing services should be prohibited. These additional requirements can be imposed on platforms over specific thresholds (users/revenue/cross border services).”
  • Increasing transparency in relation to areas such as ranking, search, consumer rights when dealing with platforms.
  • Ensuring consumers have the same rights, whether the service is funded by money or data.
  • Simplifying redress options – more online, regional redress
  • Ensuring openness – addressing barriers to switching and free choice within closed ecosystems, such as apps stores and operating systems.