Response to TRAI Consultation Paper on Regulatory Framework for Over-the-Top (OTT) Services

Executive Summary

The principle objective of net neutrality is that “all the Internet traffic has to be treated equally without any discrimination”; but this has had different interpretations over varied contexts. While the discourse in India has often treated net neutrality as a singular policy construct, we break down net neutrality to its various components. We then individually contextualise each component to the unique characteristics of the Indian telecommunications industry such as dependence on wireless internet access, the fragmented and non-contiguous distribution of spectrum, high competition between TEL-SPs and low digital literacy. The evolving nature of markets and networks are also considered while taking into account various public policy perspectives.

In this submission, we also argue for the need to introduce reasonable regulatory parity between functionally equivalent communications services provided by OTT-SPs and TEL-SPs. We compare the regulations for OTT-SPs under the Information Technology Act 2000 (as amended) with the regulations for TEL-SPs under the Telegraph Act 1885 (as amended), the license agreements (UL, UASL, ISP-L) and TRAI Regulations. Based on an analysis of the current laws and regulations, we suggest how TRAI needs to intervene to create this regulatory parity (for example in areas such as privacy, spam/UCC, interception etc.).

Through the above analysis, we recommend an overall regulatory framework that should be adopted by the Government. The framework takes a nuanced approach to various components of net neutrality, contextualised to India, and also attempts to bring reasonable regulatory parity. Instead of compartmentalising TEL-SPs and OTT-SPs as two distinct actors, the recommended framework considers a two-layered approach which recognises that there is an overlap between TEL-SPs and OTT-SPs. The first layer comprises of network and infrastructure (collectively called the network layer) and the second layer comprises of services and applications (collectively called the service layer).

The framework further divides the service layer into “Non-IP Services”, “Specialised Services” and “Internet Based Services”. The concept of “Specialised Services”, which is borrowed from the European Union, refers to traditional services that have migrated to an IP architecture such as facilities-based VoIP calls to PSTN and IPTV, and are either logically distinct from the Internet or have special needs which the “best efforts” delivery of the general Internet cannot satisfy. This concept helps in applying different evaluation criteria to functionally equivalent “Non-IP Services”, “Specialised Services” and “Internet Based Services”. In the framework, “Specialised Services” are also recognised as an exception to net neutrality. The concept of “Specialised Services” also helps to create an incentive for continued investment in underlying infrastructure by TEL-SPs.

This framework has helped us to bring a more balanced approach from the perspective of both TEL-SPs and OTT-SPs, while also taking into account technological convergence. It has also helped us to bring a more nuanced approach to various issues comprising net neutrality such as zero rating, paid prioritisation etc. We have considered best practices from different international regimes and the pros and cons during implementation in order to determine the exceptions and boundaries of net neutrality that should be adopted in India.

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