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The debate around regulating OTT communication apps like WhatsApp, Telegram, and Google Meet in India has heated up over the last few months—with telecom companies, including Jio, Airtel, and Vodafone, arguing that OTT apps should be regulated under the Telecommunications Act, 2023, as they rely on telecom infrastructure.
Meanwhile, the likes of Broadband India Forum (BIF), National Association of Software and Services Companies (NASSCOM) and the Internet and Mobile Association of India (IAMAI) have argued that OTTs are already governed by the Information Technology Act 2000. In fact, last year, the then telecom Minister Ashwini Vaishnaw also had clarified that OTT apps are governed by the IT Act and not the Telecom Act.
Despite that, telecos are pushing for OTT services to be regulated on par with themselves to ensure a ‘level playing field’— subjecting OTTs to a similar licensing regime and taxation as telcos.
Read more: COAI asserts OTT apps like WhatsApp fall under Telecom Act citing 'national security' reasons
The Telecom Regulatory Authority of India (TRAI), which released Consultation Paper on the framework for service authorisations to be granted under the Telecom Act, in July, has now been actively discussing the regulation of OTT communication services and held an open house discussion on August 21, amid the ongoing debate. The Authority is likely to announce its recommendations over the next two- three weeks, sources close to the development revealed to Storyboard18.
The debate itself is pretty heated—on one hand, these apps offer services similar to traditional telecoms, so applying the same rules, especially around security and data protection seems logical. On the other hand, regulating them like telecoms could stifle the very innovation and flexibility that make these apps so popular and might lead to higher costs for users, points out Payal Roy Choudhuri, Director of Marketing, Data Dynamics.
This issue has become even more urgent with WhatsApp’s massive user base in India being scrutinised for data-sharing practices, especially under India’s new Digital Personal Data Protection (DPDP) Act, 2023.
Although she adds that OTT platforms and traditional telecom operators aren’t playing by the same rules.
“Telecom companies rely on expensive spectrum, while OTT apps use the internet’s infrastructure, which operates under a completely different set of rules. Trying to fit these digital platforms into a telecom-centric framework could lead to unnecessary legal and operational headaches, without really improving user protection," she notes.
The Act and The Argument
As per the Telecom Act, which is for feedback from the public, "telecommunication" is defined as “transmission, emission or reception of any messages, by wire, radio, optical or other electromagnetic systems, whether or not such messages have been subjected to rearrangement, computation or other processes by any means in the course of their transmission, emission or reception” which through its plain reading interpretation means that OTT apps do not fall within in its ambit, say experts.
However, during the recently held open house, Cellular Operators Association of India (COAI) noted that the new Act defines OTT platforms as ‘access services’, so they ideally should therefore be brought under the licensing framework and require authorisation. “Bringing OTT communication services under the authorisation/licensing regime would ensure fair competition, address potential biases, and foster a level playing field within the telecommunication industry," the body said.
It also has said that the telcos are also obligated to comply with the Telecom Commercial Communication Customer Preference Regulations, 2010, and have invested substantially in setting up their systems to prevent unsolicited communications as required by the regulator’s regulations.
Additionally, telecom companies have also had to invest heavily in setting up the infrastructure for lawful interception and monitoring.
“Despite these investments, the unregulated application-based communications services being rampantly provided completely bypass this apparatus which is a big security threat to the nation,” it added.
Unlike telecoms, the OTT service providers are not obligated to comply with QoS and security regulations which gives them an edge over the compliance mechanism and is “inherently damaging to all the regulatory efforts to ensure these security paradigms”, COAI further noted.
At the same time, Alpana Srivastava, Partner, Desai & Diwanji, notes that the legal implications of regulating OTT services under the Telecom Act, 2023, are not entirely clear. The Act introduces enhanced government powers to intercept communications and manage telecom services, which could potentially affect how OTT platforms operate.
The Act primarily targets traditional telecom services and networks, leaving OTT services under the purview of existing IT regulations. “OTTs have also stressed that telcos operate solely at the network layer while OTTs function exclusively at the application layer,” she points out.
Further, considering the position of the Department of Telecommunications (DoT), that it does not intend to regulate OTT services under the Telecom Act, 2023, lends and interesting twist.
"The DoT has clearly stipulated that OTT services being excluded from the purview of the Act was a deliberate decision and made in order to avoid overlapping regulations and to maintain a clear distinction between traditional telecom services and OTT services. Indeed, the term OTT has not been defined under the Act and the only way to bring OTT services under the umbrella of the Act would be to expand on the definition of “message” and “telecommunication” under Section 2 thereof," says Abhay Chattopadhyay, Partner, Economic Laws Practice.
It is important to note that as of August 2024, there hasn't been a significant update on the TRAI consultation paper regarding the regulatory mechanism for OTT communications and selective banning. The process is still ongoing, and TRAI is likely reviewing the comments and counter-comments submitted by various stakeholders on various key points such as scope of regulation, licensing requirements, quality of service standards, interoperability, consumer protection, taxation, and the criteria for selective banning.