OTT Regulation & Draft Indian Telecommunications Bill

OTT Regulation and the Draft Indian Telecommunications Bill

The Draft Indian Telecommunication Bill, 2022, has become available to the public.

Major Points

• Background: OTT platforms do not currently require a licence to provide services, but telecom firms do.
• The Department of Telecommunications suggested regulating over-the-top (OTT) platforms' voice, video, and data communication services as telecom services.

Consolidation of 3 Acts governing Telecom Sector:

• The Indian Telegraph Act, 1885,
• Indian Wireless Telegraphy Act, 1933, and
• The Telegraph Wires (Unlawful Protection) Act, 1950.
• This adjustment was made in order to respond to a long-standing demand by telecom operators, who have repeatedly demanded for an equal playing field.

Major Clause of the Bill

• A licence would be needed to provide services for OTTs and internet-based communications if OTTs were included in the definition of telecom services.
• OTT Platforms, like other telecom operators, must apply for a licence from the government.
• Dilution of TRAI's Authority: The Telecom Regulatory Authority of India (TRAI) was given less authority when it came to giving new licences to service providers.
• Information interception: Information sent or received over telecommunication services may be intercepted by a government official with authorization if doing so will protect India's sovereignty, integrity, or security, its friendly relations with other nations, its public order, or its ability to deter crime.

Updates to the TRAI Act:

• Currently, the TRAI Act mandates that the government consult with the regulator before granting service providers licenses.
• Additionally, it permits the TRAI to ask the government for any information or documents required in order to make recommendations. In the latest draught Bill, it has been suggested that these powers be eliminated.
• In order to protect the general health of the telecom industry, competition, long-term development, and fair market mechanisms, the TRAI may order carriers to "abstain from predatory pricing."
• The new draught Bill also proposes to repeal a clause in the TRAI Act that now forbids the appointment of a government employee as TRAI's chairperson if such individual has not previously held the positions of secretary or additional secretary.

TDF: TDF stands for Telecommunication Development Fund.

• It suggests substituting the Telecommunication Development Fund (TDF) for the Universal Service Obligation Fund (USOF) (TDF).
• The Universal Service Obligation Fund (USOF) is a collection of monies made possible by a 5% Universal Service Levy on telecom firms' adjusted gross revenue.
• With the TDF, the goal is to increase connectivity in underserved urban areas, R&D, skill development, etc. It has primarily been utilized to support rural connectivity.
• Authority of Government: If a telecom company with spectrum declares bankruptcy or becomes insolvent, the assigned spectrum reverts to the central government's control.

Challenges

• End-to-end encryption: It is unclear how these clauses would affect WhatsApp calls, which are normally end-to-end encrypted, meaning that the service provider does not have access to the data sent through such calls.
• Regulation of content: The digital contents offered on these OTT platforms are made available to the general public without any filtering or screening because there is no law or independent body to watch over and govern them.
• Power Must Be Increased: The OTT platform manages video data in high resolution. As a result, more power will be needed to run these systems. The increased use of electricity, energy, and fibre capacity is the cause of the rising demand for storage capacity.
• Video piracy has been a problem ever since broadcast television first appeared. Video piracy negatively impacts a company's bottom line as well as its user base and brand. When OTT platforms are compromised, both user data and content leakage are at risk. About 21% of Americans watch television that has been pirated.

The OTT Platforms

• OTT, or over-the-top platforms, are services that host and broadcast music and video.
• Services: OTT began as content hosting platforms but quickly expanded into producing and releasing their own web series, feature films, documentaries, and short films.
• These platforms provide a variety of content and using artificial intelligence to recommend to users the material they are most likely to watch based on their prior platform usage.
• Charges: The majority of OTT platforms typically charge a monthly subscription price for premium material that is typically not available elsewhere while offering certain content for free.
• In most cases, the OTT platform itself produces and markets the premium content in collaboration with reputable production companies.

India's regulation of OTT platforms

• Because OTT platforms are a relatively new kind of entertainment, there are no laws or regulations governing them in India.
• In November 2022, the government changed the "allocation of Business Rules" as the first step toward regulation, bringing all online platforms under the control of the I&B Ministry and instructing all platforms to register with the Ministry.

Self-control model:

• Since there has been much discussion and controversy regarding the regulation of such platforms, the Internet and Mobile Association of India (IAMAI), an organisation that represents OTT platforms, has created a self-regulatory mechanism.
• Issues: Upon closer inspection, it was shown that the process suggested by IAMAI did not adequately take into account content that was illegal under the law, and there were conflicts of interest that were reported to IAMAI in September 2020.
• As part of their proposed two-tier structure, the Online Curated Content Providers, or OCCPs, had also suggested a Digital Curated Content Complaints Council in addition to the self-regulatory mechanism.
• The Ministry of Information and Broadcasting, which will now be in charge of these sites, however, rejected the suggestion.

Way Forward

• Create a thorough, three-tier framework for handling complaints.
• The OTT Platform itself will provide the first level of oversight via a grievance officer.
• A self-regulatory organisation made up of content publishers and their associations will serve as the second level.
• The MIB will oversee and consider appeals for judgments made at level two, or even if the MIB submits a complaint to the inter-department committee, through a third-level inter-department committee.