A word of advice on OTT and the draft telecom Bill
GS paper 2: Government policies and interventions
Prelims exam: Provisions of Bill
Mains exam: Significance of Draft Telecom Bill
Why in news?
The inclusion of Over The Top or OTT (Communication Services) within the ambit of the draft Indian Telecommunication Bill, 2022 that was unveiled recently for public comments, is a feature that has drawn much attention and comment.
|OTT (over-the-top) is a means of providing television and film content over the internet at the request and to suit the requirements of the individual consumer. The term itself stands for “over-the-top”, which implies that a content provider is going over the top of existing internet services.|
Draft Telecommunication Bill analysis:
- Through the Indian Telecommunication Bill, 2022, the Centre aims to consolidate and amend the existing laws governing the provision, development, expansion and operation of telecommunication services, telecom networks and infrastructure, in addition to assignment of spectrum.
- The draft establishes that the prior consent of the user is necessary before offering any promotional services or advertisement.
- This way, as India is already one of the worst impacted countries through spam calls and text messages, many users can expect relief from regularly being bombarded with such unsolicited intimations.
- The appeal before the appellate authority. Besides, the central government is also enabled to set up an alternate dispute resolution mechanism which can range from mediation, arbitration, etc.
- The draft bill also assigns unwavering power to the central government. First, it can waver, in part or whole, any fee for any licensing holder or a registered entity under the rule.
- Second, it seeks to dilute the watchdog function of the Telecom Regulatory Authority of India (TRAI) to a recommendatory body.
- Third, if a telecom entity that possesses spectrum undergoes bankruptcy or insolvency, the assigned spectrum will return to the central government’s control.
- One of the key changes is inclusion of new-age over-the-top communication services like WhatsApp, Signal and Telegram in the definition of telecommunication services.
- As per the draft law, providers of telecommunication services will be covered under the licensing regime, and will be subjected to similar rules as other telecom operators.
- This issue has been under contention for several years now with telecom service providers seeking a level-playing field with OTT apps over communication servicessuch as voice calls, messages, etc. where operators had to incur high costs of licences and spectrum, while OTT players rode on their infrastructure to offer free service.
Argument behind OTT
- The principle of “same service, same rules”.
- It seems logical that communication services, whether provided by telcos or OTTs, should be treated similarly.
- It is the desire to preserve the arbitrage that exists between voice and data tariffs.
- In OTT services, the telco gets lower data and not a higher voice/SMS tariff.
Why OTT communication services should be kept out of the ambit of Telecom law
- OTT communication services are already covered under the existing IT Act and, presumably, will continue to be so under the proposed Digital India Act.
- Whether it is encryption, data storage, interception or cooperation with law enforcement, OTTs can be and are regulated but not licensed or pre-authorised.
Why should there be such a hue and cry if OTT communication services are moved from the purview of the IT Act to the Telecom Law?
- The proposed Telecom Bill and the current Telegraph Act are based on the principle that provision of telecommunication services is the sole privilege of the government except to the extent that private entities are permitted read licensed or authorised.
- the IT Act, which regulates technology usage, is based on the exact opposite premise: everything is permitted except that which is specifically and explicitly barred and subject to any mandatory requirements that must be met.
- Inflow of venture capital funding to OTTs would be severely discouraged.
- It is well nigh impossible to distinguish an OTT communication service from any other OTT platform because every OTT platform such as Flipkart, Ola, MakeMyTrip does incorporate an element of messaging.
- How does one make a distinction between an OTT communication service provider and any other OTT platform or service that includes communication services? This is an impossible task.
What if only the communications component of OTTs were to be regulated?
- It would be equally problematic since requiring a license or authorisation for an element that is an inherent part of a platform’s activity would be tantamount to control of the entire activity.
- Licensing innovation is a contradiction in terms.
- Yet another factor is that the Telecom Bill will impact only India-based OTT players. Those operating from overseas would not be impacted.
- This would seriously handicap Indian service provider’s vis a vis their foreign competitors.
The modernisation and regulation of Telecom Regime was in the pipeline for some time now and the intent of this legislation makes it clear that incorporating technology is the way forward. The intent of the government has been to promote business in the sector and invite more FDI but a lot of gaps have to be fulfilled to make it a comprehensive legislation.