OTT regulation should keep consumer interest in consideration: CUTS International

ET Telecom, March 03, 2023

The over over-the-top (OTT) service providers should be regulated while keeping the interest of consumers in consideration, any change must prevent “unintended adverse consequences” on consumers, according to the research and advocacy firm CUTS International.

The telecom operators, which are currently intensifying the roll outs of fifth generation or 5G networks in India, have suggested a revenue-sharing model with the OTT players for the usage of mobile networks.

The premise of the whole argument is based on ‘same service same rules’. Cellular Operators Association of India (COAI) had suggested levying a “usage charge” for actual traffic carried by OTT on telecom networks. The usage charge will be decided mutually between telcos and OTT players who must contribute towards creating and developing digital telecom infrastructure in India in exchange for using the services.

“The consumer’s voice has been missing from the debate on OTT regulation. Regulations are aimed at preserving and enhancing consumer interest. Any change must prevent unintended adverse consequences on consumers, and should be beneficial for them,” said Amol Kulkarni, Director (Research), CUTS International.

CUTS International said that subjecting OTT service providers to “additional unreasonable regulations” may negatively affect consumers. It noted that, in particular, smaller OTT service providers that provide offer customised content to consumers may not be in a position to enter into mutually beneficial cost-sharing pacts with the telecom operators.

“Their services may be deprioritised or disallowed on the network, impairing consumer choice for accessing services they desire,” it said.

In said that, for instance, if the OTT service providers decide to pass on the cost to the consumers, they will have to pay telcos for network access and to the OTT service providers for accessing their services.

“This might particularly impact consumers who overwhelmingly depend on OTT services for information, education, upskilling, and income generation,” CUTS International said.

It suggested that to meet additional costs, OTT service providers may be “forced to redirect investment” planned towards expansion, enhancing consumer’s experience, improving the quality of services, and redressing grievances. “This could also adversely impact consumer welfare.”

“Creating a level playing field between OTT service providers and TSPs by subjecting both to similarly stringent regulations may not be the right approach. To the contrary, there is a case to rationalise the regulatory framework for TSPs by doing away with unreasonable requirements they are subject to,” said Kulkarni.

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