A word of advice on OTT and the draft Telecom Bill

Source– The post is based on the article “A word of advice on OTT and the draft Telecom Bill” published in The Hindu on 25th November 2022.

Syllabus: GS2- Parliament and state legislatures

Relevance: Bills and Acts of the Parliament

News- The article explains the issues related to inclusion of OTT communication services within the new Telecom Bill.

Why is the rationale behind this move not logical?

The main argument behind its inclusion is the principle of “same service, same rules”. However, this is erroneous. Same service means the user should be able to substitute one for the other at their own discretion. But no OTT provider can reach a customer without the intermediation and services of a telecom service provider.

OTT communication services are applications or value-added communication services that ride on the basic communication services that telcos provide. The latter is in the domain of carriage and the former is in the domain of applications such as group and video communication, encryption, etc.

The inflow of venture capital funding to OTTs would be severely discouraged.

Telecom Bill will impact only India-based OTT players. Those operating from overseas would not be impacted. This would be disadvantageous for Indian service providers vis a vis their foreign competitors.

Why should OTT communication services be kept out of the ambit of Telecom law?

OTT communication services are already covered under the existing IT Act. OTTs can be regulated but not licensed or pre-authorised.

The Telecom Bill is based on the principle that provision of telecommunication services is the sole privilege of the government except to the extent that private entities are licensed or authorised.

On the other hand, the IT Act is based on the exact opposite premise. Everything is permitted except that which is specifically and explicitly barred. It enables and encourages creativity, innovation, new products and venture capital funding.

What if only the communications component of OTTs were to be regulated?

It is not possible to distinguish an OTT communication service from any other OTT platform. Every OTT platform such as Flipkart, Ola, MakeMyTrip also incorporate an element of messaging.

Requiring a licence or authorisation for an element that is an inherent part of a platform’s activity would be tantamount to control of the entire activity.

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