To the Telecom Regulatory Authority of India (TRAI),
We're speaking to you as customers, as people who use the networks
that you regulate. Recently, you asked people to share their views
on the regulation of apps in India. We went through your draft
consultation paper, struggling through it all, to look at the twenty
questions you are asking the people of India, and we have to say, we
were a little surprised.
That's because though the paper is over 100 pages, and still manages
to say very little at the end. It talks about how what you call OTT
services - but we, as consumers know as apps and websites - are
hurting telcos and costing them money. It talks about how these are
taking advantage of the network telcos paid for, without giving a
"fair" cut in return.
Yes, the recently unveiled WhatsApp voice calling could cost
companies like Airtel and Vodafone a little in voice revenue if it
really takes off, but would also lead to increased data usage.
Customers who never used data could also start using data, so it is
actually beneficial to telcos, but that side of the argument is not
represented in your consultation paper. The fact that telcos make
advertisements like this one heavily featuring OTTs is skipped over,
in order to fearmonger about healthcare, safety and privacy - things
where telcos, and by extension the telecom regulator aren't really
involved.
So, here are our responses to the 20 questions on OTT regulation.
Hopefully, you will take note.
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.
No, it is not too early to create a regulatory framework. High-speed
Internet access is still available to only a small number of people
in India, but fair guidelines will encourage more users and make the
Internet a more useful medium when they do log-on.
It is important that the regulations be focused towards the needs of
the users - the Indian public - and not the needs of corporations.
Without regulations in place, we have seen companies like Airtel
plan special fees for VoIP services, and these same companies have
said that apps like WhatsApp hurt the development of networks,
simply because the telcos do not wish to compete fairly.
You [Trai] need to create rules to ensure that we, the paying
customers, are not being forced to pay extra money to access
services that should all be freely and readily available. Further,
in its draft, you talk about how OTT services are not required to
meet any minimum quality of service standards, unlike telcos.
That is a good point in theory, but as any customer can tell you,
the telcos are doing a terrible job in providing even the bare
minimum of service. Voice and data are both unreliable, billing is
not always correct, and routinely changing billing plans and data
packs make it hard for the customer to know what they're being
charged for. Your focus should first be on getting the telco
services in order, before looking at OTT services.
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.
No. Where would you draw the line on communications? Should any app
that includes any kind of communication with another person be
regulated in this way? Many e-commerce platforms offer a live-chat
function, to let you talk to a customer care representative. Should
that be regulated? Most online games also allow people to chat, but
are clearly not communications services. Should a forum be regulated
as a non-real-time communication service? What about email, or
Facebook, or Twitter? The first problem with regulating
communication services is that this is too vague, and can be
interpreted in any number of ways.
Secondly, these communications services are not offering
replacements for the voice services that are required to meet
minimum standards, but are instead supposed to be an optional means
of communication. Since people don't depend on them for emergency
communication, why is there a need to regulate them?
With that said, it is also worth noting that some of these services
actually offer the user a better experience either in terms of the
features offered, or in terms of the reliability. On days of
festivals, not only do customers have to pay a premium for their
text messages, these messages still don't reach their recipients for
hours - is it a surprise customers prefer WhatsApp?
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.
There is no evidence to show that the increased use of OTT services
is directly costing the telcos money. For one thing, the term OTT is
too broad in itself. Is YouTube costing telcos money if it does not
have any comparable service of its own? Obviously not. But what
about something like WhatsApp?
There, we can see that there has been some reduction in the number
of text messages. This has however been blamed entirely on OTT's but
there could be a number of different reasons, including businesses
moving to other systems of communication and co-ordination, and
people moving away from SMS to using methods like missed calls as a
mode of communication - not to mention telcos employing
customer-hostile policies like charging a premium for messages on
days they are most likely to use SMS.
Data usage has gone up significantly, which should ideally
adequately compensate telcos, who at the same time should be
offering a better product if they want to remain competitive.
The so-called OTT services are the only reason for users to pay
telcos for Internet services at all. Data has been a big revenue
source for telcos at a time when voice and text plateaued. However,
we didn't see Airtel or Reliance being charged an access fee by
Google. Why should the reverse apply?
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.
The OTT players should not be required to pay anything over and
above the data charges paid for by customers. We are witnessing the
birth of several online businesses in India, particularly focused on
mobile Internet users. Data used is data used, and we customers are
already paying for data use. More of us are paying every day, and
we're using more data and paying more for it too.
By asking these companies to pay an "access fee", you stifle Indian
innovation and stifle value creation in India. If an access fee was
required to be online in India, you would have no MakeMyTrip, no
Zomato and no Flipkart, and none of the value that these companies
are creating in India.
If telcos are having difficulty in balancing their books - and that
is a separate debate - let them raise tariff for all Internet
traffic equally and see how the market reacts.
Could such options include prices based on bandwidth consumption?
No, since customer is already paying more for that bandwidth!
Can prices be used as a means of product/service differentiation?
No! If pricing is a means of differentiation, then only established
companies with big pockets will be able to participate in the Indian
online economy. If a company doesn't have the money to pay Vodafone
and Airtel and Reliance and the other operators for free access, it
will lose huge numbers of users. By doing this, you'll make sure
that no new Indian company can come up, while cash rich
international firm will still be able to compete here.
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.
The existing laws cover a wide range of subjects, and should be more
than enough to meet the needs of the day. There should not be
special laws that apply only on the Internet - this was the kind of
thinking that led to the creation of section 66A of the Information
Technology Act, which was struck down by the Supreme Court.
Adding further guidelines that protect telcos, instead of customers,
will not just cost the public more money when companies like Airtel
decide to roll out special charges for separate services, but will
also hurt Indian innovation. It will be another layer of spending
that an Indian startup has to endure, putting us on an even more
unfair uphill struggle against the rest of the world. The more such
regulations against the ease of building an OTT service exist, the
less likely it is that a Facebook or Google could be made in India.
How can the prevailing laws and regulations be applied to OTT
players (who operate in the virtual world) and compliance enforced?
Yes, they can, and they should be. Just because a company is
operating online doesn't mean that it no longer has to follow the
laws of the land. If it is possible for you to regulate OTT players,
then the rest of the laws have to apply to them as well. And if the
laws don't apply, then how exactly can you regulate OTTs?
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.
There's a new app or service - OTT player as you call it - launched
somewhere around the world every single minute. Do you really expect
to mandate all these apps should maintain logs for your benefit, or
for access by Indian security agencies? And if they aren't able to
do that, what is your solution, ban them and restrict Indian
consumers to a handful of 'whitelisted' apps? Such ideas are against
the very basic nature of Internet that's built on a foundation of
choice and freedom.
Yes, OTT services could be misused for illegal purposes, but unless
you put a blanket ban across the entire Internet, it won't be
possible to stop people from finding sites for clandestine
communications. Therefore, this question is not relevant.
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 services should be held to the same standards of security,
safety and privacy as any other business that operates in India.
There should be no separate laws that apply to online behaviour and
offline. And given that high speed Internet access is still in its
infancy in India, any such laws should be applied first and foremost
to offline businesses, which will impact a larger number of Indian
customers.
OTT players do need to ensure that user data is treated as securely
as possible, and need to ensure that our information is not misused
in any way. However, the government and offline services need to be
held to the same standard, and all need to be as transparent in
their activities as possible.
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 ETNO proposal is not necessarily relevant to Indian conditions -
the markets and users are entirely different, and our focus should
be on encouraging more users to get on the Internet, and to
encourage more Indian businesses to use the Internet.
The telcos need to innovate to come up with new features that can
provide more value to the customer, instead of innovating to come up
with new ways to charge the customer for the same (shoddy) service
that they are already providing.
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.
The principles outlined in paragraph 5.47 - that outline the
importance of customer choice, transparency from the provider,
requiring information to be given in easy to understand language,
and to ensure that the promises made by telcos are verifiable, are
all very important, and should be the focus of this discussion, not
the regulation of OTT services, which by and large have been much
more customer-friendly.
The OTT companies face actual competition from across the world and
therefore don't need as much oversight. With our telcos on the other
hand, these principles are not being addressed in any real way.
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.
It is our belief that traffic management policies are by nature,
anti-consumer. However, amongst these, the bandwidth caps - referred
to as Fair Usage Policies in India - are the most easily understood
by the customer, who can know in advance exactly what is being paid
for, and adjust their spending according to their needs.
Fair Usage Policies, as described in the paper, where the speed
available to a person is throttled if the usage is "excessive" is in
effect a hidden bandwidth cap, and - from the way it is described -
it seems the exact criteria when the usage becomes 'excessive' is
not disclosed to the customer up front. That is why this is not a
good option for customers.
The practice of toll boothing - where different services are offered
at different prices - is also not suitable to India. The penetration
of mobile broadband is still very low, and the speeds available to
users are also similarly very low. Asking people to pay
significantly more money to access specific sites, or degrading the
quality of service will only hurt the growth of the Internet in
India, which has been hugely beneficial in a number of ways.
Zero rating access - where some services are made free to access
through deals between the OTTs and the telcos is equally
problematic, because it will prioritise some sites over others. If
you can access Facebook for free (as is the case with Internet.org,
launched in partnership with Reliance), but need to pay close to Rs.
100 per month to access other social networks, then most users would
prefer to stick with the free option - thus providing an unfair
advantage to bigger players who can afford to sign such deals.
For a relatively low cost, an established player could cut off all
chance competition for the huge number of users present in India. In
this way, zero rating access could prevent the growth of new
Internet businesses in India
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?
The telcos should be required to publish traffic management
techniques, in a manner that is possible for ordinary users to
clearly understand. This will help improve transparency, but as
discussed in the previous answer, unless there are reasonable
alternatives present, this isn't helpful to the users.
Transparency is not a sufficient condition by itself - if all the
TSPs follow toll boothing practices, because they claim it results
in better access speeds, then knowing the practice being followed
doesn't help paying customers. What we need is for you to take steps
to ensure that such moves that violate net-neutrality and are
anti-consumer are not allowed.
Question 12: How should the 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.
Telcos can't price their access at an unsustainable rate and then
argue that their costs are not being met because of OTT services.
The increase in data access costs should be enough to pay for
network upgradation over time. If the telcos were hoping to earn
enough from the Indian customer to be able to grow without any risk,
then they might need to rethink their strategy.
So far, customers have seen continuous degradation of quality in
telco services - whether voice, text or data. This has not improved
over the years, and the only innovation we see from telcos is in
finding new ways to get us to pay for the same basic services. This
is something that needs to change, and urgently, because for many of
us, the only true value from telcos today comes via OTT services.
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.
The telcos should not ideally be discriminating between services. As
we mentioned above, the only measure that is (somewhat) fair and
understandable to the customers is data caps. "Fast lanes" of access
are particularly rating, and while there can be an argument made in
favour of zero ratings access, from a purely academic perspective,
we would say that this is also anti-consumer and hurts the Indian
Internet user.
If so, under what circumstances are such practices acceptable? No,
this is not acceptable at all - non-priced discrimination is often
hard to measure or understand, and can easily be used to hurt our
experiences.
What restrictions, if any, need to be placed so that such measures
are not abused? These measures should not be in place at all.
What measures should be adopted to ensure transparency to consumers?
Non-price based discrimination should not be adopted. The networks
need to improve their service, instead of continuing to try and get
us to pay more for less.
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. People should not have to pay extra to access services simply
because telcos are not ready to innovate to compete anymore. There
is no circumstance in which this should be justified.
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.
If the customers are already paying for data access in order to
visit the OTT sites - which we are - then why is there a question of
BuTS at all? The telco has little justification to seek payment from
the OTTs, particularly when you consider that OTT services are the
only reason we're paying to access the Internet at all.
If the telcos aren't keen to pay OTTs for every customer who uses
their services (since that customer might not have used data at all
otherwise) then why should the reverse hold true?
How should the framework be structured to prevent any discrimination
and protect stakeholder interest? These kinds of measures only serve
to benefit the network without incentivising it to improve the
services being offered. This is anti-consumer, and
anti-entrepreneurship, in favour of filling the coffers of networks
who are not willing to take risks to grow.
Question 16: What framework should be adopted to encourage India
specific OTT apps? Please comment with justifications.
The free access that helps OTT apps from around the world to grow
will also help Indian and India-specific applications. Just as there
shouldn't be discrimination between online and offline businesses,
there should also not be discrimination between Indian and other
services.
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.
We do not believe that OTT services should be licensed, but if this
is to happen - and it shouldn't - it should be as ASPs (Application
Service Providers). There should be no discrimination based on the
type of service being offered.
Given that there are tens of thousands of apps on each platform,
with many more being created every single day, a licensing regime
would be impractical, and if carried out, could hugely negatively
impact the experience of Indian users.
Question 18: Is there a need to regulate subscription charges for
OTT communication services? Please comment with justifications.
The OTT services are being regulated by supply and demand. Unlike
the telcos, which operate in a virtual monopoly through cartel like
behaviour (when was the last time you saw different rates on Airtel
and Vodafone?) OTT services exist in marketplaces where the customer
has real choice and therefore can not get away with unfairly
charging the customer. For this reason, there is no need to regulate
charges for OTT communication services.
Question 19: What steps should be taken by the Government for
regulation of non-communication OTT players? Please comment with
justifications.
The government should not be looking to regulate any OTT players -
so far, they have served customers (the Indian public, who voted for
the government) better than the telcos have. You should instead be
working on means to get the telcos to provide the minimum service
that they are charging for, instead of enabling them to place extra
charges on our bills for using the Internet and apps.
Question 20: Are there any other issues that have a bearing on
the subject discussed?
Companies like Airtel and Reliance have been experimenting with toll
boothing and zero-rating plans even knowing full well that this
paper was being worked on. The regulator needs to show that it is
independent from the companies that it is supposedly overseeing, and
it is our hope that the final recommendations will reflect this. The
outlines that emerge from this paper are worrying, and contain a lot
of language that is pro-telco, at the cost of the consumer. The
government's first interest must be the consumers, the Indian
public, and we hope that the final version of this document will
reflect that.
Optimistically yours,
Rakesh Jain