GSMA, COAI and ISPAI urge for OTT regulation: Responses to TRAI’s consultation on OTT regulation

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“OTT services whose core offering is something else but they also offer instant messaging/voice/video calling features independent of the core offering should be treated as Direct OTT communication services,” the Cellular Operators Association of India (COAI) said in its response to the Telecom Regulatory Authority of India’s (TRAI) consultation on the regulation and selective banning of OTT communication services. 

It gives the example of Instagram and Paytm to explain what these services would be and explains that such services (along with the platforms whose core functionality is voice/video calls and instant messaging) should fall under the category of direct OTT communication services. It further adds that “the principle of ‘same service – same rules’ needs to be applied in case of such OTT communication services vis-à-vis traditional licensed telecom services.”

COAI, Global System for Mobile Communications Association (GSMA), and the Internet Service Providers Association of India (ISPAI) argued in favor of regulating OTT communication services. While the latter two have not defined OTT communication services to the same degree as COAI, all of them agree on one thing: OTT platforms should be regulated and charged a fee for using telcos’ network infrastructure. 

Some context: 

TRAI’s consultation paper on the regulation of OTT communication services and selective banning of apps focuses on the following broad themes—

  • Revenue share agreements between OTTs and telcos. (i.e. OTTs should pay telcos for using their infrastructure)
  • Licensing and regulatory requirements for OTTs.
  • The selective banning of OTT services in periods of unrest (i.e. banning specific apps instead of shutting down the internet during periods of unrest)

We have summed up the organizations’ arguments on these themes below.

Defining OTT communication services:

COAI: It suggests that the definition proposed by the Department of Telecommunications (DoT) in 2015 should be used to categorize OTT communication services—services that provide real-time person-to-person telecom services on top of telcos’ infrastructure.  It says that ‘person-to-person’ here should mean both human and application/machine and ‘real-time’, should also include near real-time communication. It classifies OTT communication services as follows —

  • Direct-OTT Communication Services: Explained above.
  • Incidental OTT communication services: OTT communication services where interpersonal communication is only an incidental or ancillary feature to the principal offering and does not act as a functional substitute or independent of the services provided by traditional licensed telecom service providers (TSPs). Examples include Uber, Ola, Rapido, Swiggy, etc.

ISPAI: “OTT (Over the Top) Communication services enables the end user to establish communications such as Instant Messaging/ Voice/ Video calling on demand via platforms like digital application or website available on mobile device/personal computer over public/private internet network, as independent interpersonal communications service,” ISPAI says.

It proposes that OTT communication services should be subdivided into two categories—

  • OTT communication services: These provide communication services similar/complementary to the services provided by a TSP/ISP such as text-based communication services and voice & video calling services.
  • OTT application services: These are different from the services being offered by licensed service providers. This includes social media-integrated communication services and business, collaboration communication services, security-focused communication services, and virtual assistant-integrated communication services.

It says that functional similarity/substitutability should be used as the primary criteria for deciding whether regulatory and licensing norms should be equally applicable to licensed service providers and OTT communication services. 

Also Read: What Telcos Want: OTT Platforms Should Be Licensed, Telcos Say To TRAI’s OTT Regulation Consultation

Proposed regulatory framework:

GSMA: As per GSMA, there needs to be a contribution mechanism (a network usage fee arrangement) that obliges both telcos and OTT communication services “to act in good faith and based on common principles of fairness and reasonableness.” Just like the telcos stated in their submissions, GSMA also calls for ‘same service same rules’. “This will make [the] user experience consistent with regard to [the] quality of service, security, transparency and privacy,” it argues. 

It says that the regulation should follow a light-touch approach stating that “prescriptive, ex-ante regulatory [regulation that precedes an event] regimes like those traditionally governing communications markets are no longer effective in the face of rapid innovation.” GSMA says that the regulatory framework should be designed to achieve its result most cost-effectively “without regard to technologies, industry structures, or legacy regulatory regimes.” The framework should also be able to adapt to the rapidly changing digital ecosystem.

GSMA says that to make the telecom business sustainable, the regulatory and fiscal burden imposed on telcos needs to be reduced. This includes reforming spectrum pricing structures which, it says, are higher than global standards. Further, it says that “ there is [a] need to adopt a collaborative approach by including all relevant stakeholders, more dialogues and consultations in order to ensure the issues of telecom operators are addressed without imposing an additional burden on OTT service providers.”

COAI: COAI believes that it is necessary to bring OTT communication services under the regulatory framework of the Unified License Agreement. Further, it argues that  communication platforms should meet the following requirements—

  • Allow for lawful interpretation of messages
  • Be required to follow the data privacy and protection laws of India
  • Should be required to host their data in India
  • Should have to curb spam under the unsolicited commercial communication (UCC) regulations
  • Should meet quality of service standards as currently followed by telcos
  • Financial conditions (such as application processing fee, entry fee, license fee, bank guarantees, etc.) should be imposed on OTT communication service providers as applicable to the TSPs.

ISPAI: Just like COAI, ISPAI is also of the opinion that the TRAI should create a service authorization category ‘OTT Communication Services’ under the unified license regime. It suggests that a ‘broad and light touch regulatory framework based on the principle of “same service, same rule” applicable to all service providers should be promoted for ensuring a level playing field.” It also suggests other regulatory requirements (licensing, provision of lawful interception, customer verification, offering emergency services, and so on) mentioned by GSMA and COAI in their submissions. 

Also Read: Licensing will stifle innovation: Global Encryption Coalition Steering Committee to TRAI’s consultation on OTT regulation

Network traffic management: 

GSMA: It says that as the net neutrality debate has evolved, policymakers across countries now accept that network management is an important part of ensuring that quality of service (QoS) is maintained.  (Quick context: Net neutrality means treating all data should be treated equally and GSMA seems to suggest that operators should have flexibility to differentiate between data traffic)

For mobile operators to be able to offer an efficient user experience, they must have the flexibility to manage traffic transparently and protect users from major internet threats (spam, malware, etc.),” it says. It points out that the Department of Telecommunications Committee and TRAI have in the past recommended reasonable traffic management. 

“Given limited network capacity, mobile network operators need the flexibility to differentiate between types of traffic to provide an optimal consumer experience,” GSMA says, arguing that driverless cars, telemedicine, and smart homes will depend on how data delivery is managed. It says that a set of regulations that limit a telco’s ability to manage its network “ is counterproductive and hinders innovation and consumer choice.”  

Network fees:

GSMA:  It submits that asking OTTs to pay a network fee is fully compliant with net neutrality obligations and will not affect access to an open and free internet. Further, it says that the price for the traffic paid by the end users will not change depending on whether the platform they access is subject to fair share payments or not. On the internet service provider (ISP) side, GSMA argues in favor of peering charges (charging for data to be transferred from one ISP to another). It says that peering charges do not influence end customer’s access to any content and thus do not violate net neutrality.

It recommends that “only the large traffic originators, those exceeding a 5% bandwidth occupation at peak hours measured at the individual operator network level, who impact substantially on operators’ networks,” should fall within the scope of network fees.

COAI: It believes that large traffic originators (LTOs) should pay a fair share charge to telcos based on the actual data traffic carried over the telco’s network. Like the arguments raised by Airtel and Jio in their submissions, COAI also says that telcos have property rights over their network and are thus entitled to rent/lease charges from those using it for commercial purposes. 

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It mentions that its member TSPs deliver seamless telecom services and are committed to net neutrality principles. Further, it contends that net neutrality is not connected with the fair share charge issue. 

It says that startups/ smaller OTT communication platforms should be required to pay the fair share charge. The criteria for who has to pay the charges should be determined based on objective criteria like, the number of active subscribers (it suggests 50lakh as mentioned in the significant social media intermediary rules). 

ISPAI: It suggests that since OTT communication services depend on the infrastructure provided by ISPs/IPs, they should pay a network usage charge and “also enhance contribution to exchequer since these revenues will be a part of TSPs’ AGR calculations which contribute directly to the national treasury.” It argues that the following challenges for collaboration between communication platforms and telcos including —

  • Competition: ISPAI says that many OTT services today directly compete with licensed telcos and should thus be, “regarded as same to the services offered under license in India in the interest of promoting a fair & level playing field.”
  • Unfair advantage to OTTs in the current environment: It explains that many OTT providers today directly connect with large and small ISPs and mobile network operators (MNOs), providing them direct access to the OTT’s content. ISPAI says that, “this is equivalent to an OTT operating as an ISP without mandatory and necessary licenses as per the norms of India.”
  • Revenue sharing: “It is unclear how revenue should be shared between OTTs and Telecom service providers and there is no defined guideline or mechanism for the same,” ISPAI says.
  • Net neutrality: It says that collaborative frameworks may involve preferential treatment of traffic or content which may raise concerns about net neutrality. 
  • Compatibility of systems: “As the 2 parties [OTTs and telcos] collaborate, it could be a technical challenge and arduous task to integrate the systems and networks between the 2 parties,” ISPAI explains.

Also Read: Network fees could splinter the internet: Stanford Law Professor Barbara Van Schewick responds to TRAI’s consultation on OTT regulation

Global discussions on network usage fees: 

GSMA: It stated that in 2023, The European Parliament recently proposed that the economic sustainability of telcos is necessary for achieving Digital Compass 2030 (one of the goals of which is providing high-performance connectivity to all citizens by 2030). GSMA said that the European Parliament has urged the European Commission to, “address and mitigate persistent asymmetries in bargaining power as set out by the European Declaration on Digital Rights and Principles for the Digital Decade.” It has also called for the establishment of a policy framework where large traffic generators (LTGs) contribute fairly to the adequate funding of telecom networks without prejudice to net neutrality.

GSMA also mentioned that Brazil’s telecom agency, ANATEL, is also currently discussing the need for fair share arrangements between telcos and internet service providers.

COAI: It mentioned that the European Commission’s Digital Decade declaration states that, “all market players benefiting from the digital transformation… make a fair and proportionate contribution to the costs of public goods, services and infrastructures.” 

It also mentions that South Korea has introduced several bills in 2021 that, “seek to mandate local and foreign content providers to enter into contracts with ISPs in South Korea to be able to use their networks.”  They mention that one such bill, “prohibits content providers from using ISP’s network without paying “fair consideration” for use of the network, whereby the non-complying content provider’s service can be shut down by the authorities.”

Also Read: Dispelling the myths surrounding Korea’s network fee arrangement: An interview with Professor KS Park

On the issue of selective blocking:

GSMA: GSMA says that narrow internet restrictions should be applied where required, with continued access to basic and essential services. Further, it suggests that only the competent personnel as authorized by the Temporary Suspension of Telecom Services (Public Emergency or Public Safety) Rules, 2017 shall issue orders to suspend telecommunication services. It also says that the issued order should prescribe a time frame for suspension and be published publicly.It suggests that OTTs should be asked to block content instead of telcos. It believes that direct involvement of concerned OTT services/websites in the blocking process will, “ensure that the normal data continues to run without having any negative impact on the economy or other digital services.”

It points out that international bodies like the Freedom Online Coalition, Global Network Initiative, and Telecommunications Industry Dialogue have all voiced that governments should refrain from network disruptions. 

COAI: It suggests that a competent authority should identify domain names and IP addresses that need to be blocked under a selective banning order since TSPs have no control over communication platforms and would be unable to get this information. OTTs/websites should be given instructions to effectively collect IP addresses. Once the domain name and list of IPs are made available by the Competent Authority, “the TSP has to segregate the data traffic originating or terminating towards them, from the entire internet traffic of that particular telecom circle and get the blocking done,” it explains. 

It adds that selective banning at the network level has many issues such as the use of virtual private networks( VPNs), dynamic IPs, etc.  As such, COAI points out that OTT should be involved in the selective banning process. It says that OTTs know the location of their customers and can easily bar access and that barring through OTTs would become easier once they are licensed. “We further submit that OTT providers should implement IT solutions that would allow them to swiftly suspend their services in the case of an internet outage,” it adds. It also adds that “the Temporary Suspension of Telecom Services (Public Emergency or Public Safety) Rules, 2017 or any other law that is in force needs to be made applicable for OTT services in the interest of national security.”

Alternatively, it suggests that the government should consider source-level blocking. It mentions that the government should, “directly engage with the concerned OTT service provider or website or hosting server /operator or with the OS providers so that the desired outcome may be achieved without any significant difficulties.”  It mentions that all classes of OTT platforms and websites should be included under the regulatory framework for selective bans. It also adds that there should be sustainable empowerment under the Information Technology Act and related rules for ordering OTT services/websites and/or OS providers to provide alternate solutions and comply with selective banning orders. 

ISPAI: “It is very challenging to selectively ban anything available on the internet,” it says and suggests the following methods that can be considered for selective bans —

  • Deep packet inspection (DPI): This is the technique used to monitor internet traffic at a granular level and ISPAI explains that implementing deep packet inspection can be resource-intensive and may lead to false positives or negatives. It suggests that robust DPI techniques can be implemented to accurately identify and filter the desired content and that machine learning algorithms can be used to reduce false positives/negatives. Regularly update the filtering rules to adapt to changing service URLs and content delivery mechanisms.
  • Network traffic analysis: This technique is used to monitor the flow of data packets across the network. It can be used to detect cyberattacks but is challenging to implement because of data volumes and complexity, ensuring compliance with data privacy regulations. ISPAI says that the solution to this is investing in, “SSL/TLS (secure sockets layer and transport layer security, a protocol that allows computers to safely communicate with each other on the internet) interception solutions that decrypt and inspect encrypted traffic.” But, it adds that this approach raises privacy concerns and requires careful handling of user data.

Just like COAI it highlights challenges associated with imposing selective bans (dynamic IPs, use of VPNs, encryption) and says that such bans should be implemented by OTT service providers instead of telcos. 

Note: The story was edited on September 28, 2023 at 4:56 to improve the structure of the story.

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