Trai rules out intervention for OTT services; COAI says issues unaddressed

Trai further said that no regulatory interventions are needed for privacy and security related issues of OTT services for now

Regulator Trai on Monday ruled out any immediate regulatory intervention for OTT communication services like Whatsapp, Google Duo and Viber, and said time is not opportune to recommend a comprehensive regulatory framework for them -- dashing hopes of telcos that had been pushing for same rules to be applied to such players.

The entire matter can be looked into afresh when more clarity emerges in international jurisdictions particularly the study undertaken by the ITU (International Telecommunication Union), Trai said outlining its views on the issue of regulatory framework for OTT (Over-The-Top) communication services.

The move comes as a breather for OTT players, which have come under increasing scrutiny otherwise, but deals a blow to telcos' long-standing demand for parity and level-playing-field with such OTT services that cannibalise their own offerings.

The Cellular Operators Association of India (COAI) said it had been hopeful that the Telecom Regulatory Authority of India (Trai) would address and rectify these "long pending market anomalies once and for all".

The COAI rued that without a resolution of these issues, telecom service providers will continue to be at a "disadvantageous position" vis-a-vis OTT communication service providers, who are not subject to strict regulatory/ licensing framework as telecom companies are.

OTT services refer to applications and services that are accessible over the internet and ride on an operator's network. Skype, Viber, WhatsApp and Hike are some of the popular and widely-used OTT services.

In a statement, Trai said, "It is not an opportune moment to recommend a comprehensive regulatory framework for various aspects of services referred to as OTT services, beyond the extant laws and regulations prescribed presently."

Trai further said that no regulatory interventions are needed for privacy and security related issues of OTT services for now.

Trai said that market forces may be allowed to respond to the situation without prescribing any regulatory intervention.

"However, developments shall be monitored and intervention as felt necessary shall be done at appropriate time," the regulator said.

Trai had come out with a discussion paper on regulatory framework for such services in November 2018 where it had sought industry's views on multiple issues.

These issues were similarity and substitutability of telecom service providers and OTT services, regulatory imbalance and non-level playing field between these two types of service providers, economic aspects, inter-operability, lawful interception of OTT services as well as access of emergency services from OTT.

Telecom companies in India had long been demanding that OTT players be brought under the ambit of the regulatory framework, as they offer similar services without attached licencing obligations, conditions and levies (such as licence fee).

However, OTTs argued back that a regulatory regime for them would stifle innovation.

Of late, some of these platforms have come under increased scrutiny, and the government is seeking greater accountability from these firms.

It is pertinent to mention that Trai had made it clear that the scope of its consultation paper would be regulatory issues and economic concerns pertaining to those OTT services that are same or similar to the services provided by telecom service providers (TSPs).

In a statement on Monday, the COAI said that while Trai's consultation paper two years back had posed various important issues like similarity and substitutability of TSPs and OTT communication services, regulatory imbalance and non-level playing field, "it appears none of these issues have been addressed by Trai in their current recommendations".

"While, TSPs have to abide by a strict regulatory and licensing framework in order to provide the communication services, no regulatory/ licensing framework is applicable on those OTT players who offer similar communication services in the form of messaging, voice and video calls," COAI director general S P Kochhar said in a statement.

"We are of the view that these OTT services are substitutable to the services provided by the TSPs and hence a case of non-level playing field exists," Kochhar said.

He added that security issues, such as lawful interception which TSPs comply with, are not applicable on OTT providers "which remain a threat to the national security".

"The same is true in case of the privacy and security norms which are applicable on telcos but not applicable on OTT CSPs who also offer messaging and voice/video communication services," he said.

Trai, in its recommendations, said that various studies on appropriate business models are already under consideration in various jurisdictions and added that any regulatory prescription in haste could leave adverse impact on industry as a whole.

On security and privacy issues, Trai noted that architecture of OTT communication service is evolving to protect the end users with encryption technology deployed in a manner which prevents intermediaries from getting the communication in a clear text or in an intelligible form.

Trai felt that imposition of any requirements to cater to get the details of communication in an intelligible form or clear text would either lead to change in the entire architecture of such OTT services which might not provide the same level of protection as offered currently, or may require provisions which may make the agents involved in the communication vulnerable to unlawful actors.

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