US Tech Giants Oppose Indian Telcos’ Bid to Regulate Internet Services and Pay Network Fees
Headline: Global technology giants are pushing back against attempts by India’s telecom networks to bring internet services under stricter regulation, rejecting arguments that such measures are necessary to create a ‘level playing field’ and address national security concerns.
Industry Body Argues Against Regulation
The Asia Internet Coalition (AIC), a powerful industry body that represents Amazon, Apple, Google, Meta, Microsoft, Netflix, and Spotify, has forcefully argued against inclusion of the so-called over-the-top (OTT) services in the proposed regulatory framework for telecom operators. In a submission to the Telecom Regulatory Authority of India (TRAI), the AIC said there are fundamental differences in technology, operations, and functionality between OTT services and traditional telecom operations.
Fundamental Differences Between OTT Services and Telecom Operators
- Technology: OTT services operate on the application layer, while telecom service providers (TSPs) operate on the network layer.
- Operations: Unlike TSPs, OTT providers do not have rights to acquire spectrum, obtain numbering resources, or interconnect with the public switched telephone network.
- Functionality: OTT services offer additional functionalities like group chats, voice notes, and in-app content sharing.
Argument Against Regulation
The AIC argued that including internet services in the new framework could violate net neutrality principles and harm consumer interests. The coalition also stated 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.
Existing Regulations for OTT Services
The AIC noted that there are already enough regulations in India that oversee OTT services, including requirements for:
- Interception: OTT providers must comply with interception requirements under the IT Act.
- Content Takedown: OTT providers must remove objectionable content from their platforms under the IT Rules.
- Incident Reporting: OTT providers must report cyber security incidents to the government under the IT Act.
- User Grievance Redressal: OTT providers must have a grievance redressal mechanism in place for users.
Resistance Against Telco Operators’ Push
This resistance comes in response to a coordinated push by India’s top telecom operators — Bharti Airtel, Reliance Jio, and Vodafone Idea — to bring OTT services under a new authorization framework. The telcos have recommended that OTT providers contribute to network development costs based on their traffic consumption, turnover, and user base.
Telco Operators’ Concerns
The telcos are seeking regulatory intervention to boost margins as they grapple with low average revenue per user — of approximately $2 per month. Having collectively invested $19 billion in 5G airwaves last year, the carriers are looking for ways to recoup their investments.
Regulating OTT Services Under the Telecommunications Act, 2023
The AIC disputed claims of OTT services ‘free-riding’ on telecom infrastructure. Jeff Paine, AIC’s managing director, said that OTT services have driven increased data consumption and revenues for carriers. The coalition also argued that regulating OTT services under the Telecommunications Act, 2023 would go beyond its intended scope.
Debate in India Mirrors Global Discussions
The debate in India mirrors similar discussions in South Korea and Europe, where network operators are pushing for contributions from OTT providers. The issue is complex and involves balancing the needs of both telecom operators and internet service providers to ensure a level playing field.
Conclusion
The resistance by global tech giants against India’s attempts to regulate internet services highlights the complexities involved in balancing the needs of various stakeholders. As the debate continues, it remains to be seen how the Indian government will address the concerns of both telco operators and OTT providers to create a regulatory framework that promotes fair competition and innovation.
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