Revenue sharing mechanism between OTTs and TSPs will violate net neutrality: IAMAI

The Internet and Mobile Association of India (IAMAI) has said in a submission to the Telecom Regulatory Authority of India (TRAI) that any “collaborative framework” that may result in establishing a revenue-sharing mechanism between OTTs and telecom service providers (TSPs) will violate the net neutrality framework notified by the Ministry of Communications in 2018.

In the submission, made in response to the TRAI consultation paper on “Regulatory mechanism for over-the-top (OTT) communication services, and selective banning of OTT services”, IAMAI raised its concern regarding the consultation paper seeking suggestions on a “collaborative framework” between ‘OTT communication service providers’ and ‘licensed telecommunication service providers’, as it appeared to be in sync with the demand of certain industry associations for the introduction of a revenue-sharing mechanism between OTTs and telecom service providers (TSPs).

Notably, the pending Telecom Bill also floats the idea of bringing OTT services under the ambit of telecom licenses.

IAMAI said, “Such demands are based on the erroneous notion that OTT service providers consume bandwidth, and disregard the fact that not OTT players but consumers themselves independently transact and purchase data from TSPs.”

IAMAI submission further read, “Moreover, revenue-sharing mechanisms would essentially mean charging twice for the same service as consumers already pay TSPs for the data they consume. In any scenario, the amount of data that is consumed – and the resultant ‘pressure’ put on the infrastructure of TSPs – is directly dependent on the amount of data sold by telecom companies to consumers.”

Implementing revenue-sharing mechanisms would also mean adding a cost to accessing free or cheap content, which may eventually be passed onto consumers, thus raising the cost of internet usage. Prima facie, the ‘’collaborative frameworks’’ proposed in the consultation paper might lead to a violation of the net neutrality framework, wrote IAMAI.

Regarding imposing additional regulations upon OTT service providers, IAMAI highlighted that there already existed robust regulatory frameworks for such services in India, and therefore there was no need to bring OTT service providers under any additional licensing/regulatory frameworks.

Notably, such services are regulated under the Information Technology Act, 2000, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 and the Digital Personal Data Protection Act, 2023, among others. 

Attempts to bring OTT service providers under regulations typically reserved for telecom companies fail to recognise that telecom service providers (TSPs) are subject to a special regulatory and licensing regime as they control valuable national resources such as spectrum. “Therefore, the introduction of a telecom regulatory regime for OTT service providers would be an act of over-regulation,” stated IAMAI.

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