Subject: My comments on the proposed OTT regulation
From: Rajeev Agur
Date: 07-Apr-15 4:03 PM
To: advqos@trai.gov.in

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 is never too early to establish a regulatory framework for OTT services. A proper regulatory framework is necessary which regulates the entry and exit of these apps. Since these apps make it possible to connect people all over the world, I think it is preferable to monitor whom these apps are catering to. There is a chance that anti-social elements use these apps to communicate themselves and since they are out of regulatory framework it is difficult to trace them. A proper framework in this regard will secure country's future. However, there should be provisions to amend it as the newer technologies emerge and also according to the public demands.


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 OTTs offering communication services may be brought under the telecom licensing regime, which requires them to register before providing services and also make it compulsory for the users to have a valid registration before accessing the service. This is very important for national security as well as they might be mis-used by the stray elements who can cause damage to the nation. However, they should be charged only for the data access and not differentially because again, charging for data and services by the TSP is forcing the user to stick on to the TSP calls or SMS framework. User must have the freedom to choose how he wish to communicate. Making him pay for both data and access charge is double taxing, which is not a good event given that the field is still growing. This may shoo away new customers from using new technology. This goes against the fundamental duty of the constitution, citizens must develop scientific temper.


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.

I find some of the facts given the consultation paper are misleading public. For example the fall in the messaging revenues though can be attributed to the OTT apps like WhatsApp, is majorly because of the regulation put in place by the TRAI. The fall in revenue is directly because TRAI has put in a restriction of sending 100 SMS per day per  number, which is clearly not sufficient for any college going student or a young employee. TRAI has taken this regressive step to curb the menace of tele marketing and now accuses OTT apps for the loss of revenue. While the TSPs in countries like USA and UK are offering unlimited calls and SMS offers, isn't it curbing freedom of Indian users by saying you can only send 100 SMS per day? What other option does Indian users have than to migrate to OTT apps?

Again, most people are buying internet data packs only to run their messaging apps who otherwise do not utilize any other kind of data. Hence, I think its profitable for the TSPs to continue with present model.

Coming to Voice calls, yeah, there is a visible shift in calls from traditional network to VOIP, but again, TSPs are benefiting here. It is true that the apps do not share any revenue they earn with TSP but again, they do not charge for the net access. All the internet usage charges goes to the TSP which is a considerable amount. No consumer uses his data just to make VIOP, once he buys a data pack, he will definitely burn it off for using services like youtube etc which is profitable for the TSP because after all, more data a consumer consumes, more revenue the TSP gets.

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 of product/service differentiation? Please comment with justifications.

Does government of India believe in charging twice for a same good or service? If yes, TSP may charge OTT for the use of network. As the user is already paying for the internet, I think it will be double charging if OTTs are also charged. If GoI believes in double charging for the same service, then TSP may go ahead and collect charges from OTT.

 

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, there are  imbalances in the regulatory framework, we may even call it complete absence of regulation in case of OTT apps. They do not obtain licenses or pay spectrum charges or provide bank guarantees, is not legally monitored , where OTT apps provide communication services. They must be brought under regulation by specifying certain norms where they are allowed to operate in the country only if they have an office in the country, maintain records of all the customers and the services they utilize in accordance with Indian laws and provide information to the law agencies if required. In case of non-communication OTT players like YouTube, flipkart, Uber cabs etc, should also be made to comply with the regulations of record keeping but should not be charged separately as the customer is already paying for the internet access. This applies to communication apps too.

            Coming to the economic impact, brick and mortar shops are losing their space to online market places but it is their mistake to some extent. For example if book stores are taken, they sell books which are very highly priced and that too not all books are stocked. When a market place like website offers same book for a cheaper price and also maintains a stock of huge number of books, customer will definitely choose a better option for him. It is not right to force customer to choose a costlier option by stating the local businesses are getting affected. However, it should be taken care that the taxes are paid properly by the OTT players who offer services and goods over internet. It should also be noted that the OTTs have opened up a lot of job opportunities such as delivery boys, stockists, market place businessmen etc which are new to the field. Hence it should be seen as a positive impact on the society and not as a threat to the society.

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.


In case of regular TSP, lawful interception is permissible which is absent for OTTs, this can be overcome with putting in place stringent entry regulations and also making it mandatory that the customers provide correct details to enrol for these services. It is not an impossible thing to give only one id for a person and link enrolment of a service to some government issued card like AADHAR so that there are no anonymous enrolments. This helps in tracing down the account from which call originated and uses ip technology in case of events like terrorist attacks. Also helps in maintaining data records. OTT players who operate from outside the country should be made to open offices in India if they want to operate in the country. And also make it mandatory to follow all the existing rules to continue their operations.

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?

 

The OTT players usually generate revenue by displaying ads and also selling user information to the third party, which in turn may pose threat to the security of the nation. Hence a TRAI must ensure that the OTTs are registered with it and they comply with privacy laws of India and do not share user’s private information to third party.

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.

In India no TSP provides unlimited data right now. There is already cap on the amount of data which is referred to as Fair Usage Policy, which is having price discrimination of traffic if a user views more youtube videos, he exhausts his data soon and is forced to pay more to reset his FUP which means the OTT players are already under some form of regulation which is self imposed by the TSPs, which could be incorporated in to the national policy by TRAI now.

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.

            Fundamental right of freedom in constitution of India should be extended to internet also. Once a user pays required fee to access internet, he should be allowed to access any content that is available on the internet. He should not be asked to pay premium to some services. Technology is changing to which TSPs have to adopt. Just like cellular telephony too over landlines due to change in technology, its not the new technology in form of OTTs, so instead of TSPs crying foul over this, they should try and find newer avenues to adapt to this new technology and generate revenue instead of trying to restrict the evolution of technology. However, people who require faster speeds and higher data volumes can be charged more in order to compensate losses for the TSPs.

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.

As already stated, Fair usage policy can be set in place to avoid higher burden on the TSPs and also give them a chance to provide quality services. However, it is not advisable to allow them to charge differently for different services, which is discriminatory on the services and also against the fundamental right of the people of right to communication.

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?

TSP’s should not be allowed to publish various traffic management techniques for various OTT applications as it goes against the principle of net neutrality.

Question 12: How should the conducive and balanced environment is 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.

This is similar case that of electricity. Various appliances like refrigerators and ACs run using electricity. If the power company needs to upgrade infrastructure, does it upgrade on itself or go to the refrigerator company and AC company to share its costs? The appliances merely run on the existing infrastructure, and user pays to use that infrastructure same is that of OTTs. User pays internet usage charges to the TSP, and if there is more demand for internet or telecom services which require upgradation or newer cost effective technology is available, TSP has to invest in that. And how do they raise money when OTTs are eating away in to their profits? TSP should take a cue from electricity sector here and charge in increments. Those who use lesser data will be charged at lower slab rate and those who use more volumes will be charged at a higher slab rate. That ways TSPs do not face the problem of loss of revenues and also will get enough money to invest in innovation and upgradation as no internet user will be contended with just Messaging and VOIP but will use higher bandwidth using services like YouTube.

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.

TSPs should be allowed to implement data caps where they can reduce the speed or completely suspend the internet access to a user once he hits a specified data volume usage. If he requires more data, he can be made to pay which is beneficial to the TSP and also gives the chance to the user to decide what he wants to do over internet. The Data Cap method existing at current is effective according to me. It allows user to check his usage using a ussd code or by logging in on to the page of the TSP.

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.

No, differential pricing for data access and OTT communication cannot be justified because in reality all they are providing is just data access. OTTs build on this data access to provide their services. Hence it wouldn’t be proper if they are charged differently for same service.

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.

OTTs cannot be treated as bulk user of telecom services because technically all they are using is data in form of voice and video on the cloud, real-time. Which is basically usage of internet data for which telecom framework cannot be applied. However the users must be charged for using higher bandwidths to protect TSP interests.

Question 16: What framework should be adopted to encourage India specific OTT apps? Please comment with justifications.

            Make in India campaign can be utilized in IT sector to encourage India specific OTT apps. That will help us to make them compliant to Indian laws and also protect Indian users from being exposed in international arena. Startups should be encouraged and research should be funded at the university level. Priority should be given to the apps which meet the highest security standards. BSI should be equipped with necessary staff and technology to test and validate the quality and security of these apps.

Question 18: Is there a need to regulate subscription charges for OTT communication services? Please comment with justifications.

            There is no need to regulate subscription charges for OTT communication services. However, the data usage should be regulated and made sure that the TSPs do not run in to losses because of OTT apps.

Question 19: What steps should be taken by the Government for regulation of non-communication OTT players? Please comment with justifications.

            Regulation of OTT non-communication apps should involve validation of what private information the app collects from the user and government should ensure that the user privacy is maintained.

Question 20: Are there any other issues that have a bearing on the subject discussed?

            Just like Indian telecom sector transformed from landlines to cellular, it is now a stage where internet takes over traditional cell phone services. TRAI should take care that the users have a choice to opt for the service they want and ensure net neutrality. TSPs can be allowed to charge for data but not for accessing services through OTTs.

            COAI I feel is not acting in their interest by trying to restrict the usage of OTTs and prevent the spread of VOIP. Because the future is all about new technology and as soon internet of things is going to take over, there would be more demand for internet than the traditional voice and SMS services. Hence if the COAI moves on to data transmission services and charge for data sooner it will bring them profits. Internet of Things is a project where every aspect of human life is connected to internet like TV, fridge, AC, stove, microwave, bathtub etc, you name it and it is connected to internet which can drive up data consumption to a new level, which is profitable to TSP.


Regards,

Rajeev Agur
Associate Editor, Buddy,
School of Public Policy and Governance,
Tata institute of Social Sciences, Hyderabad.