Industry Bodies Slam Telcos’ Demand To Levy Network Fee On OTT Platforms

A number of industry bodies and civil society organisations have come together and written to the Telecom Regulatory Authority of India (TRAI) opposing the demand of the telecom service providers (TSPs) to levy a network fee on over-the-top (OTT) platforms.

The likes of Information Technology Industry Council (ITI), Alliance of Digital India Foundation (ADIF), Internet Freedom Foundation (IFF), and Internet and Mobile Association of India (IAMAI) have submitted counter comments on TRAI’s consultation paper on regulating OTT platforms, saying the demand of the TSPs would lead to violation of net neutrality principles, they said in a joint statement.

The ITI argued that OTT is not a substitute to the traditional telecom or broadcasting services but an addition. OTTs provide bundled services that cannot be separated out into ‘OTT Communication Services’, ‘OTT Broadcasting Services’, among others. Thus, it is nearly impossible to define OTT for the sake of regulating, said ITI. However, the functions of these services are already regulated under the IT Act.

Citing a study by the Competition Commission of India (CCI), it said “on balance experts feel a separate regulatory framework is not necessary for OTTs and excessive regulation may stifle technological innovation, and therefore be counterproductive”.

The Broadband India Forum (BIF) in its counter comments said that the demand for network usage fees from OTTs is outdated and would violate net neutrality principles.

“OTTs (content and applications over the internet) have been empowering individuals by boosting productivity and socio-economic standing in addition to having massive economic spillover effects on the nation’s prosperity. Overregulation of the OTTs would be counterproductive, as this will lead to a higher cost to customers and reduce consumer choice,” BIF President T V Ramachandran said.

Besides, it would also adversely impact innovation, lead to discrimination, adversely impact smaller entities and startups, and lead to a violation of net neutrality guidelines, he added. 

According to the Alliance of Digital India Foundation (ADIF), the revenue-sharing proposal can discourage the growth of digital enterprises. Additionally, it introduces an additional cost which may eventually be passed on to consumers, thereby increasing the cost of internet usage, it added. 

The ADIF, which counts startups like Paytm, Matrimony and MapMyIndia among its members, too said that the proposal contradicts the principles of net neutrality laid down by the Ministry of Communications in 2018 to ensure impartiality.

Controversy Creates Consultation Paper

At the heart of the matter is a consultation paper floated by TRAI on regulating OTT apps. 

In their comments on the paper, most of the TSPs said OTTs should pay a network fee to them based on the traffic they contribute. However, startups have strongly opposed the move, saying it violated the principles of net neutrality.

Zerodha’s Nithin Kamath attributed the ‘exponential growth’ of Indian startups to net neutrality and said the destiny of the nation is tied to a neutral internet. Later, over 100 startup founders, including those of Paytm, PhonePe, and Razorpay, wrote to TRAI, urging the telecom regulator to maintain its unwavering support for net neutrality principles.

Last week, Minister of State for Electronics and Information Technology Rajeev Chandrasekhar also came out in support of net neutrality.