Telecom Regulatory Authority of India (TRAI) is seeking suggestions on whether or not Over-The-Top (OTT) communications services such as WhatsApp, Skype, Viber, and Hike should be regulated like telcos. TRAI on Monday issued a consultation paper ‘Regulatory Framework for Over The Top Communications Services’ to discuss changes in regulatory regime. Telecom regulator TRAI essentially feels that communication apps like WhatsApp, Skype and more should be regulated like telecom operators in the interests of national security. It believes that such apps are sometimes “misused” to spread harmful rumors.
Telecom companies in India have long been demanding that OTT players be brought in the ambit of the regulatory framework, as they offer similar services without attached licensing obligations, conditions and levies (such as licence fee). In addition, telecom operators also have to abide by stringent service quality benchmarks and invest in networks and infrastructure. TRAI invited industry’s views to debate on whether OTT services should brought under regulatory regime. OTT services refer to applications and services that are accessible over the Internet and ride on an operator’s network. WhatsApp, Skype, Viber and Hike are some examples of the popular and widely-used OTT services.
The discussion paper is aimed at analyzing and discussing “changes that may be required in the current regulatory framework to govern these entities and the manner in which such changes should be effected”, reads TRAI statement. It has also asked whether “regulatory or licensing imbalance” is impacting telecom network investments especially required for capacity expansions and technology upgradations, and how OTT service providers can participate in infusing investment in the telecom networks. “Would inter-operability among OTT services and also inter-operability of their services with TSPs services promote competition and benefit the users,” the TRAI consultation paper said, asking stakeholders to state measures that can be taken to promote competition. TRAI has asked the industry to give its views on various issues raised in the consultation paper by December 10, 2018, and counter comments by December 24, 2018.
TRAI has also asked industry’s views on whether substitutability be treated as the primary criterion for comparison of ‘regulatory or licensing norms applicable to TSPs and OTT service providers’. The regulator has asked if there should also be provisions for emergency services to be made accessible via OTT platforms at par with the requirements prescribed for operators as OTT are also providing voice-call facilities. The authority has sought suggestions if there are any issues related to lawful interception of OTT communication that are required to be resolved in the interest of national security or any other safeguards that need to be instituted. “Should the responsibilities of OTT service providers and TSPs be separated?” it has asked in the paper. It has sought to know whether there is an issue of non-level playing field between OTT providers and TSPs providing same or similar services. And, in case there is an issue, should there be any regulatory or licensing norms made applicable to OTT service providers to make it a level playing field.
India’s telecom regulator will meet top executives of mobile phone companies next month to chalk out an action plan for 2019 and may issue a consultation paper next week on whether Over-the-Top (OTT) apps such as Skype, WhatsApp and Google Duo should be regulated. “We are going to call chief executives of telecom service providers in the month of December to actually finalise the agenda and roadmap for the next year,” Telecom Regulatory Authority of India Chairman Ram Sewak Sharma told. The regulator will separately meet Indian broadcasting industry stakeholders including Multiple System Operators, he said.
Over the past few years, TRAI has worked with telecom operators to identify areas that require intervention and come out with an action plan for the year. The issue of regulating OTT apps that ride on operators’ networks has been a contentious one. Telcos have demanded that OTT communication apps be brought under a regulatory regime similar to theirs since they provide comparable services without the liabilities associated with being a licence holder. App makers have opposed the move, saying it would stifle innovation, and pointed out that they are already regulated under the Information Technology Act.
“We are coming out with a consultation paper on OTT players probably next week,” Sharma said, adding that the final document was almost ready. TRAI had initially floated a draft paper in March 2015 seeking feedback from stakeholders and whether there was a need to establish a regulatory framework for OTT apps providing communication services similar to telcos. However, the regulator has since then only addressed issues of net neutrality and differential pricing of data, leaving the OTT regulation aspect aside.
As digital entertainment content booms both on desktop and mobile in India, industry players are having to navigate questions around statutory regulation, which has not been a major issue in this space until now. Earlier this year, India’s Ministry of Information & Broadcasting set up a panel to regulate online media, but senior executives in the digital entertainment industry firmly believe that self-regulation is the only way forward, arguing that OTT is very different to television and print. “Regulation for the OTT is a complete no-no because it’s an informed choice given to consumers to decide what they want to watch, so with that sort of a principle, there is no question of regulation,” Amrita Mukherjee, SVP Legal for digital content at Hotstar, told the recent Pixels 2018 conference in Mumbai. “The way it should operate should be through self-regulation,” she said. “We are all responsible companies here.”
Other speakers argued that any form of regulation in digital content – self-imposed or otherwise – should keep the changing interests of the Indian consumer in mind, and not over-reach to censor new ideas or stifle innovation. “We have always looked at regulation as a top-down thing because there was a licensing regime in broadcast media and there is other regulatory oversight in various other media, including television, movies and radio,” noted Ajay Chacko, co-founder and CEO of Arre, an Indian entertainment content platform.
“We have reached almost 400 million people without having any sort of formal regulatory overhang, so anything that we talk about – whether it’s regulation or self-regulation – should not kill the growth of the industry and the growth of consumer choices,” he said. Echoing Mukherjee, he stressed the issue of informed choice for ITT viewers. “We are asking if we can have relatively common disclosure norms across the industry, especially when it comes to professionally created or curated content. “What framework this adopts should not forget the principle of informed choice, which should be the bedrock of any regulatory regime.”
What is Over the top (OTT)?
Over the top (OTT) is a term used to refer to content providers that distribute streaming media as a standalone product directly to viewers over the Internet, bypassing telecommunications, multichannel television, and broadcast television platforms that traditionally act as a controller or distributor of such content.
The term is most synonymous with subscription-based video on demand services that offer access to film and television content (including existing series acquired from other producers, as well as original content produced specifically for the service), including but not limited to Amazon Video, fuboTV, Hulu, Netflix, Now TV, and Sky Go as well as a wave of “skinny” television services that offer access to live streams of linear specialty channels similar to a traditional satellite or wireline television provider, but streamed over the public Internet, rather than a closed, private network with proprietary equipment such as set-top boxes. Over the top services are typically accessed via websites on personal computers, as well as via apps on mobile devices (such as smartphones and tablets), digital media players (including video game consoles), or televisions with integrated smart TV platforms.
OTT television, usually called internet television or streaming television, remains the most popular OTT content. This signal is received over the internet or through a cell phone network, as opposed to receiving the television signal from a terrestrial broadcast or satellite. Access is controlled by the video distributor, through either an app or a separate OTT dongle or box, connected to a phone, PC or television set. By mid-2017, 58 per cent of US households would access one in a given month and advertising revenues from OTT channels exceeded those from web browser plug-ins.
OTT messaging is defined as instant messaging services or online chat provided by third parties, as an alternative to text messaging services provided by a mobile network operator. An example is the Facebook-owned mobile application WhatsApp, that serves to replace text messaging on Internet connected smartphones. Other providers of OTT messaging include Viber, WeChat, Skype, and Google Allo.
OTT voice calling, usually called VOIP, capabilities, for instance, as provided by Skype, WeChat, Viber, and WhatsApp use open internet communication protocols to replace and sometimes enhance existing operator controlled services offered by mobile phone operators.
The value of India’s OTT content market is predicted to double from 2017 to 2020 while OTT is now a regular part of advertisers’ media plans, according to a leading Sony executive. “What we are seeing in 2018 going on 2019, is that most advertisers, while planning any campaign, put OTT in their media spend,” Uday Sodhi, business head – digital, Sony Pictures Networks India, told. He was speaking as Sony Pictures Networks India announced a deal with Lionsgate that will see more than 500 hours of content from the US entertainment giant available on its own OTT platform SonyLIV.
“Today, a brand doesn’t go into the market without OTT as part of its media plan which, I think, is a huge change from 2016-2017,” Sodhi said, adding that most of the big brands have been consistently advertising on OTT during Diwali. “OTT is now mainstream for an advertiser,” he declared. “ You have to put your money on OTT as an advertiser, going forward.” Separately, the Federation of Indian Chambers of Commerce (FICCI) has forecast that the OTT content market will double from Rs 710 crore in 2017 to Rs 1,420 crore in 2020, with audiences following a similar trend.
India is expected to be the second largest video-viewing audience globally by 2020, with OTT take-up growing as internet penetration spreads, connection speeds increase, data costs fall and device ownership multiplies.
Sodhi pointed to the rapid adoption of smart TVs over the past couple of years, which has influenced SonlyLIV’s choice of content. “Smart TVs makes it that much easier to binge-watch long shows,” he explained. And “the availability of these shows is becoming easier. People are connected on social media and know which show is getting released in the rest of the world.” Hence the tie up with Lionsgate and the prevalence of English content at a time when the trend in other areas, such as news, is towards regional language content. But he didn’t rule out dubbing shows into local languages. “We haven’t really thought about it yet. It is an interesting idea, but at this point, we are focusing on English.”