Broadband India Forum (BIF) has expressed in its counter comments on the TRAI Consultation Paper titled "Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services," that the demand for network usage fees from OTTs by telecom operators is outdated and would violate net neutrality principles.
Outdated Network Usage Fee Demand
BIF noted that "Telcos wish to cling to an old, legacy, and obsolescent system of 'Sending Party Network Pays (SPNP),' prevalent during the voice telephony era of the 1990s," when they ask for Network Usage Fees to be paid by the OTTs for carrying the large traffic generated by the former.
BIF has highlighted that the 'sending-party-network-pays (SPNP)' principle, which telecom operators are using to justify their demand for network usage fees, was inherent in the old voice telephony system of the 1990s. However, the internet operates differently, with users not only wanting to communicate with one another but also wanting to be always online to connect to content, applications, and services. This is the reason why internet traffic is typically unbalanced between content and application providers and internet access providers.
South Korea Example
Broadband India Forum has also pointed out that the solitary example of South Korea cited in the case of SPNP is known to have been one with poor outcomes, with the involved parties (SKT and Netflix) mutually agreeing recently to withdraw the agreement between them. BIF has also stated that several small players have had to exit the country due to disadvantage to them from the law.
BIF has also stated that the recent telco claim to mandate OTTs to pay for network usage fees and the Government’s intent to impose telecom licensing frameworks on OTTs would lead to a violation of the Net Neutrality principles and guidelines of 2016. This would bestow telcos with the powers to tilt the level playing field to favour one OTT or another, thereby leading to discrimination, curbing innovation, and adversely impacting the startup ecosystem.
Allaying concerns of Telcos over lawful interception and security, BIF has highlighted that since OTTs are already regulated under the IT Act 2000 and other associated laws, additional regulations under the Telecom Law are not required.
BIF President, T V Ramachandran said, "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. 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."
BIF's counter comments are a significant development in the ongoing debate over the regulation of OTTs in India.