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Regulatory Mechanisms for OTT Services UPSC NOTE

 What is OTT?

  • An over-the-top (OTT) media service (also known as Streaming platforms) is a media service offered directly to viewers via the Internet. 

  • OTT bypasses cable, broadcast, and satellite television platforms: the types of companies that have traditionally acted as controllers or distributors of such content. 

  • It has also been used to describe no-carrier cellphones, for which all communications are charged as data, avoiding monopolistic competition, or apps for phones that transmit data in this manner, including both those that replace other call methods and those that update software.

  • The term is most synonymous with subscription-based video on demand (SVoD) services that offer access to film and television content (including existing shows and movies for which rights have been acquired from the content owner, as well as original content produced specifically for the service).

  • OTT (Over-the-Top) services also include a range of "skinny" television offerings that provide access to live streams of linear specialty channels. 

  • These services resemble traditional satellite or cable TV providers.

  • 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.

  • Types of content:

    • OTT television

    • OTT messaging

    • OTT voice calling

Recently in news

  • On July 7, the Telecom Regulatory Authority of India (TRAI) invited responses to a consultation paper it released on a regulatory mechanism for over-the-top (OTT) communication services.

  • The paper also mentions selective banning of these services. 

  • Since most stakeholders have submitted their responses to the regulatory body, as the submission date ended on September 1, it is likely to issue guidelines in the coming days on whether OTT services should be regulated or be let to continue to operate as it is.

What happened?

  • The discussion on the selective banning of OTT services came after a Parliamentary Standing Committee issued a notice to the Department of Telecom (DoT) to explore this option due to the unrest caused by these platforms which have mass reach and impact.

  • It is important to note that only OTT communication services like WhatsApp, Signal, Meta, Google Meet, Zoom, X, etc. were discussed in the consultation paper and not the ‘content’ OTTs such as Netflix, Amazon Prime etc. 

  • Content regulation is an altogether different subject and it comes under the ambit of the Ministry of Information and Broadcasting (MIB) and not the TRAI.

  • The TRAI has also asked stake holders to define OTT, and a proposal on cost-sharing mechanisms between Telecom Service Providers (TSPs) and OTT services.

What is the conflict between TSPs and OTTs?

  • Telecom Service Providers are of the opinion that OTTs should be regulated and charged because they use and thrive on the infrastructure built by operators over the years. Currently, they aren’t.

  • OTT communications services have led to erosion of revenues for the telcos. 

  • These platforms offer users an array of services, sending of Multimedia Messaging Services (MMS), instant messaging to voice and video calls, delivered over the internet. 

  • This circumvents the need for traditional telecom services, particularly voice calls and text messages, leading to a significant reduction in the revenue streams of telecom companies.

  • Cellular Operators Association of India (COAI) argues, OTT communication service providers neither contribute to the exchequer nor make investments like the TSPs in spread of network infrastructure in the country. 

  • The OTT communication service providers take a free ride on TSP funded networks without contributing to the setting up and maintaining digital infrastructure for access networks.

What is the demand of COAI?

  • There should be a policy framework to enable fair share contribution from large OTT service providers to telecommunication network operators based on assessable criteria like number of subscribers or data usage. 

  • To ensure fairness and compensate for the increased data demands, it is justifiable for OTTs to pay a fair and reasonable fair share charge to TSPs.

  • The funds received by TSPs from OTTs will support the expansion of networks and enhance contribution to the exchequer, the COAI added.

  • Similarly, the Internet Service Providers Association of India replied, if OTT services are a substitutable service offered by licenced service providers, then such OTT services should be considered as the same services offered under the telecom licence granted by the Government.

  • That is, all such OTT services should be governed by the same set of rules irrespective of whether they are provided by an operator on its own network or through the internet.

What do others say?

  • The Internet and Mobile Association of India (IAMAI) submitted that cost-sharing demands are often articulated through a model where the sending party network pays (SPNP) the network operator. 

  • It would essentially mean charging twice for the same service as consumers already pay TSPs for the data they consume. 

  • It would add a cost to accessing free or cheap content, a part of which will eventually be passed on to consumers, thus raising the cost of internet usage.

  • It also goes against the principle of net neutrality that states networks should be neutral to all the information being transmitted through it, said the IAMAI.

  • The Internet Freedom Foundation has also expressed apprehension for the proposal to selectively ban OTT services.

What is the argument for banning OTT services?

  • OTTs obtain the location of the customers and can easily bar access. 

  • Once the OTT communication services are under license this barring will be much easier to implement. 

  • TSP’s networks are capable of selectively blocking the OTT subject to details like IP addresses provided by the Competent Authority.

  • Government should consider source-level blocking so that the desired outcome may be achieved without any significant difficulties, the COAI added.

  • The IAMAI believes that there is no need to implement additional regulations governing OTT services, or even a regulatory framework for the selective banning of OTT services. 

  • Similarly, the Broadband India Forum (BIF) firmly opposed any selective ban on OTT services as they are adequately regulated under the existing IT Act, 2000, Consumer Protection Act, 2019, and other associated Acts and Rules.

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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Regulatory Mechanisms for OTT Services UPSC NOTE
Regulatory Mechanisms for OTT Services UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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