Advice on OTT and the Draft telecom Bill

In News 

The inclusion of Over The Top or OTT (Communication Services) within the ambit of the draft Indian Telecommunication Bill, 2022 has drawn much attention and comment. 

About the Draft Indian Telecommunication Bill 

• It is an attempt by the government to update the extant regulatory framework in keeping with the advancements and challenges in the sector. 
• This was much needed given that the three main legislations that occupy this domain are considerably outdated, with the most recent of these having been enacted more than 70 years back. 
  • These legislations are the Indian Telegraph Act enacted in 1885, the Indian Wireless Telegraphy Act enacted in 1933, and the Telegraph Wires (Unlawful) Possession Act in 1950. 
• The Bill looks to repeal these legislations and “restructure the legal and regulatory framework” for the telecommunications sector.

Impact on Over-the-top (OTT) communication services 

• Over-the-top (OTT) communication services refer to services that provide real-time person-to-person telecommunication services. 
  • Some popular examples of these include messaging platforms like Whatsapp, Telegram, Signal, Messenger, Duo, Google Meet, etc. 
• The current draft of the Bill expands the definition of “telecommunication services” to include OTT communication services. 
  • As a consequence of this, OTT telecommunication services may be subject to the same licensing conditions as Telecom Service Providers (TSPs). 
  • Under the extant framework, TSPs have to be issued the Unified Access Service Licence (UASL) for them to be able to provide telecom services in India. 
    • If OTT communication services are required to obtain the same license, they would also be subject to a number of conditions such as maintaining ‘know your customer details of their users, adhering to certain encryption regulations, and allowing lawful access to the government of their equipment and networks.

Arguments In Favour 

• The main argument behind OTT  inclusion is the principle of “same service, same rules”. 
• OTT communication services platforms use the network infrastructure of telecom service providers like Airtel, Vodafone, and Jio and provide features that compete with telecommunication services such as voice calls and SMS services. 
  • Telecom Service Providers (TSPs) allege that these features result in a double whammy for them as they cut into their sources of revenue (voice calls, SMS) while not having to deal with infrastructure and licensing costs that they have to undertake. 
  • Therefore, TSPs have been demanding a level playing field with OTT services.

Arguments Against 

• There are compelling arguments as to why OTT communication services should be kept out of the ambit of Telecom law. 
• Including OTT communication service providers within the ambit of the Telecom Bill is a deeply flawed idea that could seriously compromise the energy, innovation, and funding that characterizes India’s startup ecosystem today. 
• OTT communication services are already covered under the existing IT Act and, presumably, will continue to be so under the proposed Digital India Act.
• More worrisome is that the 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, and MakeMyTrip does incorporate an element of messaging.
• the Telecom Bill will impact only India-based OTT players. Those operating from overseas would not be impacted. 
  • This would seriously handicap Indian service providers vis a vis their foreign competitors. 

Conclusion and Way Ahead 

• Hardly any other country has equated OTT communication services with foundational telecommunication services. 
• Instead, the Government would be well-advised to include whatever controls are deemed necessary in the soon-to-be-unveiled Digital India Act.