Tech and startup groups push back against licensing regime for OTTs

Write to government ahead of public consultations later this week

Tech and startup industry bodies have again pushed back against calls by telecom operators to bring over-the-top (OTT) services under a licensing regime similar to telcos, and open them up to taxation.

Ahead of public consultations on the issue later this week, the Internet & Mobile Association of India (IAMAI), Nasscom and the US India Strategic Partnership Forum (USISPF), among others, have written to the government arguing against such efforts.

“OTTs are fundamentally different from telecommunication services and, therefore, the ‘same service-same rule’ does not apply. OTTs and Telecom Service Providers (TSPs) complement each other and do not compete and furthermore OTT service providers contribute immensely to the revenues generated by TSPs,” Nasscom said in a statement.

Any additional regulatory intervention such as a licensing or authorisation framework will lead to entry costs on the industry, increase the cost of service, which could be passed on to consumers, and thereby stymie the virtuous economy OTTs are contributing to, it added.

The latest war of words between telecom operators and tech interests comes after the former suggested that OTT communication services be covered under the new Telecom Act as an access service. Telecom operators have been demanding “same service-same rules” for OTT players that provide communication services like WhatsApp, Facebook Messenger, Google Meet, Telegram, etc. do.

"All such statements by these few stakeholders (telcos) are incorrect, and are motivated by their narrow commercial interests, and are devoid of any basis. Majority of stakeholders have not even mentioned this as an issue for discussion," said Broadband India Forum (BIF), a think tank for the broadcast sector which counts global tech giants such as Amazon, AT&T, Cisco and Google as members.

None of these stakeholders has taken into consideration the adverse impact that such a pan-India unified service authorization is likely to have on smaller and niche service providers, who offer specific services in specific service areas, said BIF, which also has government entities such as BSNL and the Centre for Development of Telematics (CDOT) under the Department of Telecommunications (DoT) as members.

The IAMAI said OTT services are not within the scope of the Telecommunications Act, 2023.

Status of OTTs

However, officials at DoT stressed the wordings of the Act leave the status of OTTs open.

The 46-page Telecom Act, passed in Parliament in December last year, defined telecommunications services as "any service for telecommunications". Initial drafts of the Bill had specifically extended the definition to OTT services provided by messaging platform WhatsApp and video-calling programme Skype, among a wide range of specialised communication services, including machine-to-machine communication, and in-flight and maritime connectivity.

This was demanded by telecom service providers such as Bharti Airtel and Reliance Jio, who had argued that OTTs offer audio and video calls as well as messaging without paying licence or spectrum fees.

In the absence of modern legislation, many technologies such as OTTs were judicially interpreted to be under the erstwhile Indian Telegraph Act as well as the IT Act, 2000. To remove all confusion, OTTs will be regulated by the Ministry of Electronics and Information Technology (Meity)’s upcoming Digital India Bill, then Telecom Minister Ashwani Vaishnaw had said.