MIB's Joint Secy Sanjiv Shankar: Imposing carriage fees on OTT services could undermine Net Neutrality principle
"The attempt by telecom companies to double dip by charging both consumers and content providers raises concerns about fairness and market integrity," stated Sanjiv Shankar, adding that voluntary commercial arrangements between telecom network operators and OTT providers may be encouraged.
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Sanjiv Shankar, joint secretary, Ministry of Information and Broadcasting, Government of India, addressed how India is navigating the crossroads of Regulation and Consumer Welfare in Media and Telecom. Speaking at the 24th FICCI Frames in Mumbai on March 5, the MIB joint secretary said that India finds itself amidst a profound transformation driven by the advent of the internet and the rise of Over-The-Top (OTT) services.
Shankar quoted Eric Schmidt, former CEO of Google, who once described the internet as "the largest experiment in anarchy that we have ever had."
Drawing on the quote, Shankar said, "The internet has revolutionized the way we communicate, consume content, and conduct business. OTT applications, facilitated by Internet Protocols (IP), have decoupled content from carriage, empowering service providers to directly reach end-users over communication networks. In this evolving landscape, OTT services like WhatsApp, Instagram, Telegram, and Skype have emerged as formidable competitors to traditional telecom services, leveraging the infrastructure laid down by Telecom Service Providers (TSPs). Yet, they do not directly compete with services governed by telecom licenses. This dichotomy poses profound questions about regulation, competition, and consumer welfare." S
Shankar spotlighted the rise of broadband internet which has seen meteoric growth and exponential growth in the past decade. With the proliferation of mobile broadband, data usage has become the primary revenue driver for telecom operators, fundamentally reshaping the revenue basket of the industry.
"As consumers embrace OTT services, the symbiotic relationship between OTT providers and telecom operators becomes apparent. OTT services stimulate demand for broadband networks, driving investment in infrastructure, and expanding access to higher-value data plans. However, amidst this transformative shift, regulatory challenges loom large. The debate over the regulatory framework for OTT services has been ongoing, with stakeholders grappling to strike a balance between fostering innovation and ensuring a level playing field," said Shankar.
TRAI's consultations on OTT regulation underscore the complexities inherent in this space, calling for a nuanced approach that considers international precedents and emerging regulatory paradigms. Central to this discourse is the principle of net neutrality, which advocates for equal treatment of all internet traffic.
Shankar said, "Imposing carriage fees on OTT services could potentially undermine this principle, creating a tiered internet where larger players enjoy preferential treatment, stifling competition and innovation. Former TRAI Chairman R.S. Sharma aptly emphasizes the importance of upholding net neutrality, not only to preserve an open internet but also to foster innovation and competition." He added that the imposition of carriage fees may have adverse consequences for consumers, leading to increased costs and reduced choice.
"Critics argue that such fees could hamper innovation and competition in the streaming industry, favoring larger players at the expense of smaller ones. Furthermore, the attempt by telecom companies to double dip by charging both consumers and content providers raises concerns about fairness and market integrity," stated Shankar.
The MIB joint secretary concluded, "As we navigate through these challenges, it is imperative to adopt a holistic approach that prioritizes consumer welfare while fostering innovation and competition. Collaborative frameworks that encourage dialogue between OTT providers and telecom operators are essential to addressing regulatory uncertainties and promoting a thriving digital economy."
Elaborating on the framework, he said it may include one or more of the following:
1. Creating an enabling environment to encourage competition, innovation and investment in the digital economy
2. OTT and network operators remain critically interdependent to each other
3. Continue to foster entrepreneurship and innovation in OTT applications
4. If the situation allows then voluntary commercial arrangements between telecommunication network operators and OTT providers may be encouraged.
5. A regulatory impact assessment (RIA) is the most important tool to estimate the impact on markets and to ensure regulatory principles of proportionate and minimal intervention are met.
6. Emerging online (tech) regulations are required to address online consumer protection, data privacy and cyber security.
"In conclusion, the convergence of media, telecom, and bandwidth presents both opportunities and challenges for regulators, industry stakeholders, and consumers alike. By embracing principles of net neutrality, fostering collaboration, innovation, and ensuring a level playing field within the market, we can navigate this transformative landscape and unlock the full potential of the digital age."
