In this report, we outline what industry bodies COAI and IIMA-Idea TCOE 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.

Read what telcosIndian internet companies and streaming services said.

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.

COAI: (Combined Answer For Q1 And Q2)

  • In this context, it is important to have in place a definition of Electronic Communication Services (ECS) which is future proof and lays the correct foundation that determines which services are regulated under the ECN/S Framework.
  • ECS can substitute telecommunications services like VOIP and messaging (text, audio and video)
  • We suggest that TRAI may adopt the definition as suggested by E.U. i.e. “interpersonal communication services’ meaning a service that allows direct interactive interpersonal exchange of information via an electronic communications network between a finite number of people, where the persons initiating/participating in the interaction determine its recipients”.
  • EU’s test be applied to determine whether the functionality forms a substantial or ancillary part of the service/platform.
  • Substitutability of a service should be one of the primary and important criteria for comparison of regulatory or licensing norms applicable to TSPs and OTT service providers.

IIM-A Idea TCOE

  • The COAI has stated that TSPs lose around 15% of their revenue to OTTs
  • The services categorized under Application ecosystems and Video/audio content are different in nature from the traditional services being provided by the TSPs and hence are not same or similar to the services of TSPs.

Q.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.

IIM-A Idea TCOE

  • Loss of revenue by TSPs – Revenue loss is primarily because of the substitution of ILD voice services and SMS services by OTT services such as WhatsApp, Messenger etc.
  • Growth in data revenue owing to the increased use of OTT services is projected to compensate for the revenue lost due to reduction in usage of ILD voice services and SMS services.
  • TSPs’ Network Infrastructure – Roll-out and Usage, Network Roll-out – Without OTTs, there is limited need for networks interconnecting with the internet. Therefore, it is an incorrect argument that investment in network infrastructure will reduce as a result of OTT services.
  • Network Usage – the network usage by consumers on OTT services have impacted the TSPs’ network usage share. Video/audio based OTT services are data exhaustive and consume large bandwidth (more than 7 times bandwidth).
  • This leads to poor last mile Quality of Service, in terms of call drop and streaming failures such as buffering, failed connections, poor voice/video quality, etc.6
  • This is a major concern that needs TRAI’s strong intervention
  • Non-Level Regulatory Compliances for TSPs and OTTs is a cause of concern as there are non-level regulatory compliances for TSPs and OTTs even though they provide functionally equivalent services. While OTT-SPs are regulated under the IT Act, the regulatory compliances for OTT-SPs are not equivalent to those for TSPs.

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.

COAI

  • Telecom is now on an unequal footing with unregulated OTTs who are offering similar voice, video and data services without incurring any Regulatory cost, in the form of License fee or Spectrum charge, leading to question the sustainability of the TSPs.
  • It is vital to review the taxes/ levies on the operators to ensure that the telecom industry remains financially stable.

IIM-A Idea TCOE

  • Imbalances render the TSPs as just the facilitators of network infrastructure rather than a service provider. The OTTs are substituting the traditional services of TSPs while using their network infrastructure.
  • TRAI must work on developing a framework for financially compensating the losses of TSPs, if any, due to OTTs riding on their network.

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.

COAI: Interoperability between OTT services should not be mandated and should be left to market forces.

IIM-A Idea TCOE

  • OTT-to-OTT – TRAI should refrain from providing recommendations on OTT-to-OTT interoperability. The mandate of regulating such services is that of the Parliament by amending the IT Act and its rules thereunder since OTTs work at the service layer i.e. application and content layer.
  • OTT-to-TSP – The interoperability between OTTs (only communication services) and TSPs would promote competition and benefit users in terms of ease of use and convenience. Such interoperability condition should be left to market forces to decide.
  • OTTs must be mandated to provide the basic emergency services.

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.

COAI

  • OTTs should be subject to the rules to meet the national security and privacy norms
  • Data mining and data analytics etc leads to complete compromise of an individual’s privacy. The app providers may put the customer’s privacy and security at risk by leaving trapdoor open for regular update of their apps / OS.
  • Therefore, there is a need to regulate the issue of customer consent for allowing the apps to mine their handset data as well as for auto updates in exchange for using the apps.
  • Unregulated internet eco-system stakeholders who use data access channel of the TSPs to reach to the customer with their services, including similar voice and messaging services, are not subject to the security compliance requirements imposed on the TSPs.
  • In case of OTTs, extraction & retrieval of data is not guaranteed if the data resides outside India or outside of operator’s direct control. OTT’s should have an infrastructure in place to support the TSPs with their existing LI system. OTT’s should also conform to set of standards to be complied with defined LI requirements by the TSPs and government sources.
  • For OTT, it proposes:
  1. Provisioning of LIM
  2. Compliance with Data Privacy requirements
  3. Compliance with the security requirements stipulated in the Unified License such as the installation of switching nodes within India, maintenance of all critical and sensitive data within India
  4. Maintenance of commercial records/Call Detail Record (CDR)/ Exchange Detail Record (EDR)/ IP Detail Record (IPDR)
  5. Meeting all requirements related to traceability of subscribers
  6. Procedures for sharing customer details with the Law Enforcement Agencies (LEAs)
  7. Compliance to the TRAI Act and Directions issued from time to time
  8. Compliance to Information Technology Act, 2000
  9. Compliance to the proposed data privacy law
  10. Compliance to the Companies Act 2013 by way of incorporation within India

IIM-A Idea TCOE

  • OTTs must have the same regulations regarding interception as put upon the TSPs. Interception of OTTs is mandated under Section 69 of the IT Act.
  • The OTT service providers must provide the Law enforcement agencies with:
  • access to their premises and systems;
  • any information as requested; and
  • any traffic data in their possession.

In a nutshell, OTTs must provide the same data as the TSPs are required to.

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.

COAI

  • OTT Communication service providers may be encouraged to facilitate access to emergency number calls using location services; however, they may not be mandated to provide such services.
  • OTT Communication Providers may inform subscribers in clear and unambiguous terms regarding their limitations to provide emergency services.

IIM-A Idea TCOE

  • Yes. The rules that exist for TSPs should be applicable to OTTs providing similar kinds of specialized services.
  • Those OTTs that reach a critical mass should be mandated to provide these emergency services.

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.

COAI

  • Some of the services that are offered by the OTT players such as messaging/instant messaging and VOIP telephony are perfect substitutes of the services that are being offered by the TSPs.
  • There are several aspects of regulatory treatment of the TSPs vis-à-vis the OTT players, which create a non-level playing field and hamper the former’s ability to compete fairly in the marketplace.
  • To minimise the imbalance, the existing regulatory and licensing conditions imposed on TSPs should be reviewed and minimised keeping in view light touch licensing approach.
  • However, OTT communications services should be subjected to critical compliances viz. Security/ Lawful Interception & Monitoring, Customer Data Privacy and Data Localization.

IIM-A Idea TCOE – answer for Q7 and Q8 below.

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.

COAI

  • OTTs can be licenced by introducing the OTT Communication Authorization under the Unified License and be subject to following Regulatory compliances:
  1. Lawful Interception and Monitoring & maintaining CDRs for a finite period
  2. Data Privacy and Protection laws of the land should be equally applicable.
  3. Data Localization: OTT communication service providers should be required to host their data in India.
  4. UCC Regulations of TRAI should be equally applicable to licensed and unlicensed entities providing similar services

IIM-A Idea TCOE (answer 7 and 8)

  • Yes, there is an issue of non-level playing field, considering the same/similar kinds of services provided by TSPs and OTTs and hence the regulatory imbalances.
  • The specialized nature of specialized services may require substantially different treatment, which should be determined on a regulation to regulation and a service to service basis.

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

COAI and IIM-A Idea TCOE: No comment