“As far as India is concerned, I don’t see personally that there is a huge necessity or urgency for sharing of cost for infrastructure,” said Sanjiv Shankar, Joint Secretary of the Ministry of Information & Broadcasting said during a discussion at the “Media, Telecom and Bandwidth: Navigating the Crossroads of Regulation and Consumer Welfare” at FICCI Frames 2024 on March 5.
The panel weighed in on the ongoing debate between telecommunication providers and OTT communication services (WhatsApp, Skype, Telegram etc) and broadcast services (streaming platforms like Netflix, Amazon Prime and others). Telecommunication companies are campaigning to receive network usage fees or “fair share” fees as they call it, from communication service providers, for using their infrastructure.
What did the Joint Secretary of the Ministry of Information & Broadcasting say?
While weighing in on the debate about fair share, Shankar said, “I don’t think in India this issue is relevant at all at this stage because the two telecom service providers are very well placed as far as their profitability.” Shankar is of the belief that the demands from telecommunication companies for “fair share” fees is irrelevant at the moment, simply because big players like Jio and Bharti Airtel are still profitable. Thus, invalidating concerns of competition that would necessitate intervention at the moment. Speaking about the profitability of telecom providers, Shankar said even when they indicate losses “it is not because of the operational issues, but because of the legacy issues”.
Shankar also said that if there were a need for cost sharing in the future, “It should be best left to the market to be determined rather than any audit based process because that will be very cumbersome and very difficult to adjudicate when there are litigations.”
What is the fair share debate?
In January 2024, the Cellular Operators Association of India (COAI), consisting of telecommunication companies like Jio, Bharti Airtel and Vodafone, reiterated its demand for a revenue share mechanism between telecom companies and large traffic generators (LTGs, which includes over-the-top platforms and streaming services) in its recently released white paper titled ‘Addressing Rising Data Traffic and Associated Infrastructure Costs in Indian Telecom’. They call this revenue share mechanism ‘fair share.”
They argued “With 5G, 5G+, and our aspirations for the future 6G, it is realistic to expect even more bandwidth-heavy applications and services to emerge going forward. This means investments in network infrastructure for delivering them would also soar and would be difficult for the telcos to bear alone.”
However, experts like Professor Kyung Sin Park, the co-founder of www.opennetkorea.org disagreed with this, telling Medianama, “Because of technological progress, you can still handle this increased traffic, increased data volume, just maintaining the same level of investment every year.”
Further, critics have argued that charging these network fees goes against the principles of net neutrality and open and free internet. In a joint letter by 24 organisations – including NGOs like Access Now – to TRAI, it was argued, “Imposition of a network usage fee from internet-based communication services to telecom companies will harm the foundations of the internet.” It explains how paying network usage fees would require internet-based services to “negotiate one-by-one contracts (thus replicating the telephone way of networking)”. They add that, “It will dramatically alter the fabric of the internet and will cause an irreversible fragmentation or splintering of the internet. This is a real threat to the internet as we know it and the success it has brought about in the country, as it will harm the existing competitive structure of the market, and the choices that are consequently available to people.
Can there be a win-win for both players?
Speaking on the same panel ST Abbas, Principal Advisor, Telecom Regulation Authority India said that he believed that telecom providers and communication services are mutually beneficial to each other, thus must encourage the success of the other. He said, “80% of the traffic which is flowing through the mobile network is video content. And this video content is being provided by content creators like OTT players [streaming services] and others. The consumer who is using the data is paying the telecom service provider for data. So basically, the telecom service providers are earning revenue through the consumption of those video content. So it is in the interest of the telecom service provider that the consumer should consume more and more data.”
Similarly, he said, “It is in the interest of the content provider [streaming platforms] also that more subscribers subscribe to their content. And to subscribe, then they will need availability of mobile network facility with affordability. If the prices are high like in other countries, they will not consume the video content at high prices. Since in India data prices are low, they are able to afford the prices and are able to watch content.”
Which Government Ministry should regulate OTT content?
The other debate at the panel centred around the regulation of streaming services. Concerns were raised with the release of the Telecommunications Act,2023 and the Broadcast Service Regulation Bill if the content on OTT services will be under regulation. Especially, if regulations from both Ministries will apply to streaming services.
Weighing in on this debate Shankar said, “And it doesn’t matter at all whether it is owned by one Ministry or the other Ministry, that is something which is determined by the allocation of business rules. So the conversation should be whether the government should have any role in it.”
Also Read:
- Event Report: International Trends In Network Usage Fees, October 4, 2023
- Unfair Competition Among ISPs, Unequal Access To Internet: Experts On How Network Usage Fees Threaten Net Neutrality
- COAI Thinks India Should Implement A US-Like Bill To Charge Large Platforms A Fee
- Responding To Telcos Counter Comments On TRAI’s Consultation On Regulation Of Online Communication Platforms
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