Global technology giants are resisting efforts by India’s telecom networks to impose stricter regulations on internet services, TechCrunch reported earlier this week. The tech companies are disputing the argument that such measures are necessary to create a “level playing field” and address national security concerns. They are pushing back against the attempts to bring internet services under tighter control, arguing that it is not necessary to achieve these goals.
This opposition suggests a disagreement between the tech giants and the telecom networks over the need for increased regulation and its potential impact on the industry.
The Asia Internet Coalition (AIC), a influential industry group comprising tech giants Amazon, Apple, Google, Meta, Microsoft, Netflix, and Spotify, has strongly objected to the proposed inclusion of over-the-top (OTT) services in the regulatory framework for telecom operators. In a forceful argument, the AIC has pushed back against the plan, emphasizing its opposition to the potential regulation of OTT services.
There are key differences between OTT services and traditional telecom operations, the AIC emphasized in its submission to India’s Telecom Regulatory Authority (TRAI). The AIC highlighted that OTT services, such as online streaming and messaging apps, differ significantly from traditional telecom operations in terms of technology, operations, and functionality, and therefore should not be subject to the same regulatory framework.
The AIC has expressed strong reservations about the proposed regulatory framework, stating that “OTT communication services are not substitutes of traditional telecom services.” The AIC emphasized that OTT services provide a range of additional features, such as group chats, voice notes, and in-app content sharing, which set them apart from traditional telecom services. The AIC also cautioned that incorporating internet services into the new framework could have far-reaching consequences, including violating net neutrality principles and harming consumer interests.
“At the outset, we would like to submit that OTT communication services are already regulated under a host of laws, including as ‘intermediaries’ under the IT Act and the rules and regulations issued thereunder. Thus, concerns that OTT communication services operate in an ecosystem where there is no regulatory oversight are unfounded,” the AIC commented.
The AIC maintains that India’s existing regulatory landscape is sufficient to govern OTT services, with a comprehensive framework already in place under the Information Technology (IT) Act and related rules. This framework encompasses a range of requirements, including interception and monitoring, content removal and takedown, incident reporting, and user grievance redressal.
India’s leading telecom providers, including Bharti Airtel, Reliance Jio, and Vodafone Idea, have launched a concerted effort to bring OTT services under a novel regulatory framework, prompting fierce resistance from the AIC and other stakeholders.
Jio, along with other Indian telecom operators, is proposing that OTT service providers share the cost of network development, with their contributions determined by the amount of data they consume, their revenue, and the size of their user base, given Jio’s significant subscriber base of over 475 million.
The telecom operators’ plea for OTT contributions comes amid financial strain, with average revenue per user (ARPU) stuck at a mere $2 per month. After sinking $19 billion into 5G spectrum purchases last year, the carriers are now turning to regulators for help in increasing their profit margins and securing a viable financial future.
The AIC has rejected the assertion that OTT services are “free-riding” on telecom infrastructure, arguing that they actually generate additional revenue for carriers through increased data consumption. According to Jeff Paine, AIC’s managing director, OTT services have been a key driver of data growth, resulting in higher revenues for telecom operators, rather than being a drain on their resources.
The AIC has contended that bringing OTT services under the purview of the Telecommunications Act, 2023, would exceed its intended scope. The coalition pointed out that during the introduction of the Act in Parliament, Telecom Minister Ashwini Vaishnaw explicitly stated that “OTT has been regulated by the IT Act of 2000 and continues to be regulated by the IT Act” and further emphasized that “there is no coverage of OTT in the new telecom bill passed by the Parliament.”
The ongoing debate in India regarding the regulation of OTT services and the push for contributions from tech companies echoes similar conversations in other regions, including South Korea and Europe, where network operators are also advocating for financial contributions from large technology firms to support network infrastructure development and maintenance.
