Open letter from start-ups warning of overregulation of internet services in the TRAI consultation paper

Vallari Sanzgirion 2 minute read
2 minute read

Disclosure: MediaNama’s Founder Nikhil Pahwa is volunteering with SaveTheInternet campaign for net neutrality.

What’s the news: SaveTheInternet campaign – that in 2015 asked the government to support net neutrality – has released a joint letter from Indian startups to the Telecom Regulatory Authority of India (TRAI) regarding its recent consultation paper on the regulation and selective banning of OTT services. The open letter cautions against the “overregulation of internet services” described as Over-The-Top (“OTT”) services alleging that it has “discriminatory consequences.”

The letter argues against such OTTs being subject to the same or similar regulatory framework as telecommunications service providers (“TSPs”). In the consultation paper and some comments submitted by TSPs, it is claimed that internet services are supposedly “direct substitutes of traditional services” and thus steal the latter’s revenues and profits. It also holds the internet services responsible for “a lack of adequate financial incentive for large TSPs to invest in infrastructure due to the lack of compensation.” The letter called the premise of these claims to be “unfounded.”

It reasoned as follows:

Incorrect to view OTT services as substitute services: The letter asked TRAI to understand that the regulatory difference between TSPs and internet applications/ service providers does not need an intervention since there are inherent structural and functional differences.

“Most [internet] services provide multiple functions and services to users, thus categorising them as ‘substitute’ services, or segmenting them as messaging, video and other applications, is incorrect. This simplistic understanding may stem from the use of the term “OTT,” a terminology predominantly used by TSPs,” said the letter.

2016 tariff regulations restrict discriminatory charges: In February 2016, TRAI issued the Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016, that restricted the charging of discriminatory prices to consumers based on content.

Advertisements

“In the spirit of this order, TRAI must caution against any demand to charge network fees from large traffic generators and prevent TSPs from yet again trying to engage in such rent-seeking behaviour, and not impose telecommunications licensing frameworks on Internet companies,” said the letter.

Article continues below ⬇, you might also want to read:

Network fees to impact openness of internet: The letter warned that imposition of additional network fees or regulatory obligations like licensing under a telecom framework puts internet services at a competitive disadvantage. It asked that the internet remain “an open platform” on which network providers treat all content, application, and services equally, without discrimination.

Licensing requirements may harm India’s start-up ecosystem: Internet applications and services may face costly legal compliances and other obligations if telecom licensing requirements are extended to them. This in turn will impact key product decisions while favouring large multinational conglomerates that can afford to adapt to such regulations.

“Giving TSPs the key to be able to control these factors will very likely impact the thriving Indian start-up ecosystem,” said the letter.

Lack of clarity in the TRAI consultation paper: The methods in the TRAI consultation paper of categorising an application or services as “large traffic generators” and deciding the “fair and proportionate share/contribution” are “arbitrary and lack clarity” said the letter. This can lead to such decisions being taken on a case-to-case basis.

Note: A disclosure was added to this post at 9:48 AM on September 15, 2023 stating MediaNama’s involvement with SaveTheInternet campaign.

Support our journalism:

For You