Question 1: Is it too early to establish a regulatory framework for OTT services, since internet penetration is still evolving, access speeds are generally low and there is limited coverage of high-speed broadband in the country? Or, should some beginning be made now with a regulatory framework that could be adapted to changes in the future? Please comment with justifications.
It’s true that internet penetration in India is still in its early stages of evolution. However, if the approach to increase penetration involves giving free access to Facebook (courtesy of Reliance) or other selective services, I’m afraid it’s the wrong path. In fact, it’s a recipe for disaster. If increasing access is the priority, people should be given free, unbiased connectivity (bandwidth). In the times of knowledge based economy, how can we hinder knowledge; it is meant to be universally accessible. But it seems the road we are treading is taking us to what I call ‘selfie economy’. Ten years down the line, do we want to assess the internet penetration in the country by the ability of our people to take a photo and post it on the internet? Or, do we want to have a large internet user base which is informed and ready to take the country forward? The choice is obvious.
The selective services which are offered for free benefit only the data carriers (as in this example, Reliance; Airtel, in several others) and the original service provider (here, Facebook, which gets to grow it’s empire) leaving very little or nothing for the end user. The user should have the liberty to choose the services she wants to use. Therefore, there is a need for an immediate response against the anti-net neutral advances of telecom operators (aka data carriers). We need to kill the dragon before it becomes too big to handle!
Question 2: Should the OTT players offering communication services (voice, messaging and video call services) through applications (resident either in the country or outside) be brought under the licensing regime? Please comment with justifications.
The answer here is simple. Some businesses evolve and innovate over time, others don’t and perish. Since, telecom operators have failed to innovate and tweak their business model with changing times, their customers should not bear the brunt for their incompetence. It’s time they realize their role as data carriers because that’s what they basically are. And, there is no dearth of opportunities in this space – revenues from data services will continue to rise. (Anyway, this should not be a concern for the end user.)
We, the Indian people, have lent the airwaves to the data carriers to channel data to us and are willing to pay for it. It’s a fair business transaction. They provide data, we consume it. And here, the end user, who is buying the data, should be the one making the decision how to consume it, not the data carriers. So, let OTT players provide their services, data carriers provide data and end users pay for the data. It is as simple as it gets.
Question 3: Is the growth of OTT impacting the traditional revenue stream of TSPs? If so, is the increase in data revenues of the TSPs sufficient to compensate for this impact? Please comment with reasons.
It is quite obvious that if people use OTT services to make calls and send messages, the traditional revenue stream would wane. It is not of concern to the end user whether data revenues would compensate for loss in traditional revenue streams. Although it is highly likely that it would (data already contributes to nearly half of revenues; it increased by 3/4th in 2014 y-o-y), over 900 million telecom subscribers should not be made to pay for the lack of innovative agility of Telecom Service Providers (TSPs) if it does not turn out to be the case. TSPs should envision to entirely become data providers and try to get good it because right now, they do a horrible job at that too. The bottom line is that just because you are losing a portion of your revenues, you should not use unethical trade practices to realize your monetary targets.
Question 4: Should the OTT players pay for use of the TSPs network over and above data charges paid by consumers? If yes, what pricing options can be adopted? Could such options include prices based on bandwidth consumption? Can prices be used as a means product/service differentiation? Please comment with justifications.
The arrangement between OTT players and TSPs is entirely their prerogative, however, this should not involve prioritizing/de-prioritizing the services of OTT players with respect to bandwith and the price paid by the end user. The success of businesses (here, OTT players), large or small, should be determined by market forces and their ability to innovate and evolve over time. TSPs have no role to play here.
TSPs should be able to differentiate their services but not at the cost of net neutrality. They can always offer better connectivity, faster downloads, cheaper tariffs, etc., as a way to stand out in a competitive marketplace.
Question 5: Do you agree that imbalances exist in the regulatory environment in the operation of OTT players? If so, what should be the framework to address these issues? How can the prevailing laws and regulations be applied to OTT players (who operate in the virtual world) and compliance enforced? What could be the impact on the economy? Please comment with justifications.
Yes. Various TSPs are offering free/cheap access to selective services provided by different OTT players. This should not be encouraged. A framework that prohibits TSPs from treating different OTT players differently by giving (or denying) them access to a user base needs to be immediately introduced.
TRAI regulates telecom bodies, it should do that. It primary motto should be serve the end users by facilitating the services of TSPs while maintaining (and ensuring) a transparent regulatory environment. OTT players can function under the umbrella of laws with govern other businesses involving IT and internet companies.
The essence of net neutrality favours the very entrepreneurial mindset of an average Indian youth. If TRAI doesn’t choose to tread on this path, small businesses may never be able to dream big; it would scuttle their growth. Net neutrality provides a level platform to all sizes of businesses to further their interests. Over the past century, most of the major economies of the world have made a transition to market economies; some others like us are still in the transition phase. Do we want to kill the growth of the economy when a significant portion of the growth is coming from the internet sector? An unbiased internet could help India realize profound surges in economic growth in the medium term and beyond.
Question 6: How should the security concerns be addressed with regard to OTT players providing communication services? What security conditions such as maintaining data records, logs etc. need to be mandated for such OTT players? And, how can compliance with these conditions be ensured if the applications of such OTT players reside outside the country? Please comment with justifications.
TRAI should ensure that communications via OTT services are traceable and proper records are maintained which could be used as legal evidence (just as communications mediated by TSPs). Rest assured, the government can request these OTT players for information as and when required. This wouldn’t be a new thing; the Government of India is already in business with internet giants like Google and Facebook, when it comes to information requests.
It is likely that if OTT players want to do business in India and bank on India’s ever increasing internet population, they would comply by TRAI regulations, irrespective of their country of origin. In this particular case, we have the leverage and we can negotiate a fair deal. However, some OTT players from hostile countries (or, the ones with a proven record of non-compliance) can be banned from providing their services.
Question 7: How should the OTT players offering app services ensure security, safety and privacy of the consumer? How should they ensure protection of consumer interest? Please comment with justifications.
OTT players should have the provision of multiple verification steps to ensure security, safety and privacy of the consumer. They should follow the best industry practices and sharing of consumer data between different OTT players without the consumers’ consent should be outlawed.
Question 8: In what manner can the proposals for a regulatory framework for OTTs in India draw from those of ETNO, referred to in para 4.23 or the best practices summarised in para 4.29? And, what practices should be proscribed by regulatory fiat? Please comment with justifications.
The revenue sharing between OTT players and TSPs should be their prerogative and it should, in no way, hamper consumer interests (or, the very essence of net neutrality). Being data carriers, TSPs can charge the consumer based on the amount of data consumed but it is entirely up to the consumer as to how to consume it. The idea of separate regulatory practices for communication and non-communication services (para 4.29) could be borrowed from our European counterparts. This is because communication services carry sensitive personal data and there is need to protect the interests of consumers.
Any behind the scenes sharing of personal data among OTT players (or, between TSPs and OTT players) without explicit consumer consent should be proscribed. Price discrimination of internet traffic should be prohibited.
Question 9: What are your views on net-neutrality in the Indian context? How should the various principles discussed in para 5.47 be dealt with? Please comment with justifications.
In the Indian context, net neutrality occupies more important position than any other period in internet’s two decade long history. It is mainly because of two reasons.
i) Innovation and risk taking is in our genes but so far India’s hasn’t realized her entrepreneurial potential. And, just when the regulatory environment is easing and the youngsters are floating new start ups everyday, we shouldn’t (and can’t) introduce a tinge of cronyism to the markets. The playing field has to be equal for businesses, regardless of their size or, the name of the holding company. Do we want to crush the dreams of our budding entrepreneurs at a time when they seem ready to take the internet by storm?
ii) Let’s repeat, who the TSPs actually are – data carriers. Shouldn’t they carry data and charge for it? Isn’t that a deal fair enough for businesses whom we, the people of India, have lent the airwaves to? Data is fed to consumers at a price and they should be able to decide how to use it. End of story.
The principles discussed in para 5.47 could be realized by establishing guidelines for traffic management techniques and ensuring their enforcement and, fostering the spirit of differentiation by price and connectivity (non-discriminatory). Independent audit firms with expertise in the field should be asked to audit the TSPs’ traffic management techniques from time to time to ensure that all OTT players are getting equal treatment.
Question 10: What forms of discrimination or traffic management practices are reasonable and consistent with a pragmatic approach? What should or can be permitted? Please comment with justifications.
Offering a product for free for a particular period of time in order to spur consumption is a ploy which has traditionally been used by many businesses. A recent example that comes to mind is the first ride free offer of Ola Cabs. However, there needs to be an antitrust law which caps such freebies, so that companies with big pockets (or, large appetite for losses) do not end up hurting other businesses.
So, if a TSP is offering a 3 day free trial period offer from a OTP player, it could be allowed but that too should be capped in terms of the number of days (and/or data usage) till it can be offered for free (meaning that no data charges apply during that time). For instance, if people are given free usage of Yahoo! search for the sake of increasing internet penetration, how they would even realize that they could be getting sub-optimal results. If you want to increase penetration, provide free, unbiased internet, not Yahoo! search!
Question 11: Should the TSPs be mandated to publish various traffic management techniques used for different OTT applications? Is this a sufficient condition to ensure transparency and a fair regulatory regime?
Yes, TSPs should be mandated to publish such results and if possible, timely audit should be undertaken by third party firms to ensure a foolproof mechanism.
Question 12: How should a conducive and balanced environment be created such that TSPs are able to invest in network infrastructure and CAPs are able to innovate and grow? Who should bear the network upgradation costs? Please comment with justifications
India has the second biggest internet population in the world and it is expected to continue to grow at a staggering pace. Mobile data traffic increased by 74% in 2014 (Nokia Networks’ MBit Index), 3G traffic has already surpassed 2G data usage, 4G is making rapid strides into the lives of internet users. A Credit Perspective (July 2014) report mentions that mobile data is already contributing up to 50% of TSPs’ revenues. These numbers can only go up. In fact, voice revenues would have stalled at a certain point but data revenues are not going to plateau over the medium term. In such a situation, there would be no dearth of capital to invest in network infrastructure. TSPs can bear the upgradation costs with relative ease.
Question 13: Should TSPs be allowed to implement non-price based discrimination of services? If so, under what circumstances are such practices acceptable? What restrictions, if any, need to be placed so that such measures are not abused? What measures should be adopted to ensure transparency to consumers? Please comment with justifications.
There shouldn’t be any non-price discriminatory practices including but not limited to bandwidth throttling. This could be allowed when OTT players offer freebies but that too should be capped in terms of data usage and/or time period. Constant assessment of traffic management practices, frequent consumer redressal and audit by third party firms could ensure transparency to consumers (although it is not an exhaustive list).
Question 14: Is there a justification for allowing differential pricing for data access and OTT communication services? If so, what changes need to be brought about in the present tariff and regulatory framework for telecommunication services in the country? Please comment with justifications.
This works as follows: i) TSPs channel data to and from consumers, ii) consumers get charged for it and, iii) they use the data according to their personal preferences.
TRAI should let the market decide the pricing. However, severe antitrust laws should also be put in place so that the TSPs do not engage in a price-fixing cartel when their immoral discriminatory pricing advances receive a blow.
Question 15: Should OTT communication service players be treated as Bulk User of Telecom Services (BuTS)? How should the framework be structured to prevent any discrimination and protect stakeholder interest? Please comment with justification.
The issue of treating certain OTT players as BuTS lies with TSPs and it’s should be their prerogative as to how to deal with it. They can reach at as many agreements as they want as long as they are legal in nature. From TRAI’s perspective, communication and non-communication services (by OTT players) can be bundled differently with respect to regulations to ensure data privacy of consumers.
Question 16: What framework should be adopted to encourage India-specific OTT apps? Please comment with justifications.
The most apt response to this question lies in being net neutral. Banning non-Indian origin apps would be detrimental to consumers’ interests. Also, such a practice would decentivize innovation among Indian OTT players. It is most beneficial to follow the principles of open market economy here and provide both Indian and non-Indian origin apps an opportunity to compete on a level playing field.
Question 17: If the OTT communication service players are to be licensed, should they be categorised as ASP or CSP? If so, what should be the framework? Please comment with justifications.
OTT players providing communication services can be categorized as CSP while those providing non-communication based services could be put under the ASP label. Since, CSPs involve data concerns (and therefore, more legal issues), they need to be have a different set of regulations. Proper records should be maintained by the CSPs and made available to the Government of India on request.
Question 18: Is there a need to regulate subscription charges for OTT communication services? Please comment with justifications.
There can only be regulatory discrimination of OTT communication services. Any kind of price discrimination undermines the very principle of free, open and unbiased internet. There shouldn’t be Facebook or Whatsapp packs but internet packs (unless there are packs for all OTT services)!
Question 19: What steps should be taken by the Government for regulation of non-communication OTT players? Please comment with justifications.
Non-communication OTT players should be prohibited from sharing data without consent. Additionally, they should not be undermined (or, given preference) in terms of bandwidth with respect to communication OTT players.
Question 20: Are there any other issues that have a bearing on the subject discussed?
Any anti-net neutral stance by TRAI would be devastating for India’s Internet of Things industry which is being mainly driven by start ups and new businesses. This sector which is growing leaps and bounds, and is expected to touch $15 billion mark by 2020, needs old and new players to fight on equal footing so that consumers’ interests are respected and India’s economy booms. (Content Via Gyan Prakash)