Draft Indian Telecommunication Bill and OTT Regulation

In News

• The Draft Indian Telecommunication Bill, 2022 was released in public domain recently.

Key Points

• Background: 
  • At present, while telecom companies need a licence to offer services, OTT platforms do not.
  • The Department of Telecommunications proposed regulating communication services including voice, video, and data offered by over-the-top (OTT) platforms as telecom services.
• Consolidation of 3 Acts governing Telecom Sector: 
  • The Indian Telegraph Act, 1885, 
  • Indian Wireless Telegraphy Act, 1933, and 
  • The Telegraph Wires (Unlawful Protection) Act, 1950.
• Reason for this change:
  • Addressing a long-standing demand by telecom operators which have on several occasions called for a level playing field. 
• Exemption: 
  • The draft said, entities can be exempted from the requirement of obtaining a license if it is in “public interest”.

Key Provision of Bill

• Licence for OTTs: 
  • Bringing OTTs under the ambit of telecom services means that OTT and internet-based communications would require a licence to offer services.
  • OTT Platforms have to obtain a license from the government just like other telecom operators.
• Dilution of TRAI’s Powers: 
  • Diluted some crucial powers and responsibilities of the Telecom Regulatory Authority of India (TRAI) on issuing new licenses to service providers.
• Interception of Information:
  • Information transmitted and received over telecommunication services could be intercepted by an authorised official of the government in the interest of the:
    • Sovereignty, 
    • Integrity or security of India, 
    • Friendly relations with foreign states, 
    • Public order, or preventing incitement to an offence. 
• Changes in TRAI Act:
  • At present, the TRAI Act requires the government to seek the regulator’s recommendations before issuing licences to service providers. 
  • It also allows the TRAI to request the government to furnish information or documents necessary to make recommendations. These powers have been proposed to be removed in the new draft Bill.
  • The TRAI may direct operators “to abstain from predatory pricing” that is harmful to overall health of telecom sector, competition, long term development and fair market mechanism. 
  • A current provision in the TRAI Act which prohibits the appointment of a government official as TRAI’s chairperson who has not served either as Secretary or Additional Secretary has also been proposed to be removed in the new draft Bill.
• Telecommunication Development Fund (TDF):
  • It proposes to replace the Universal Service Obligation Fund (USOF) with the Telecommunication Development Fund (TDF). 
  • USOF is the pool of funds generated through a 5 percent Universal Service Levy on the Adjusted Gross Revenue of telecom companies. 
  • It has been used largely to aid rural connectivity; with the TDF, the objective is also to boost connectivity in underserved urban areas, R&D, skill development, etc.
• Control of Government:
  • In case a telecom entity in possession of spectrum goes through bankruptcy or insolvency, the spectrum assigned to it will revert to the control of the Central government.

Challenges

• End-to-end encrypted: It is unclear how these provisions could potentially impact calls over WhatsApp which are typically end-to-end encrypted; meaning the company itself does not have access to the information being transmitted over such calls.
• Content regulation: There is no law or autonomous body to monitor and manage the digital contents provided on these OTT platforms and it is made available to the public at large without any filter or screening.
• More Power is Needed: The OTT platform handles high-resolution video data. As a result, operating these platforms will require additional power. The rising demand for storage capacity is due to increased electricity, energy, and fibre capacity use.
• Piracy of videos: Since the beginning of regular television, piracy has been a concern. Video piracy affects a business a lot of money, as well as users and reputation. User data and content leaks are both at danger when OTT platforms are hacked. In the United States, about 21% of the population watches pirated television.

OTT Platforms

• About: OTT, or over-the-top platforms, are audio and video hosting and streaming services.
• Services:
  • OTT started out as content hosting platforms, but soon branched out into the production and release of short movies, feature films, documentaries and web-series themselves.
  • These platforms offer a range of content and use artificial intelligence to suggest users the content they are likely to view based on their past viewership on the platform.
• Charges:
  • Most OTT platforms generally offer some content for free and charge a monthly subscription fee for premium content which is generally unavailable elsewhere.
  • The premium content is usually produced and marketed by the OTT platform themselves, in association with established production houses.

Regulation of OTT Platforms in India

• No Law or Rules:
  • In India, there are no laws or rules regulating OTT platforms as it is a relatively new medium of entertainment.
  • Government as the first step towards regulation, amended the “allocation of Business Rules” in November 2022 bringing all online platforms under the mandate of the I&B Ministry and all platforms were told to register with the Ministry. 
• Self-regulatory model:
  • The regulation of such platforms has been widely debated and discussed therefore the Internet and Mobile Association of India (IAMAI), a representative body of the OTT platforms has developed a self-regulatory model.
• Issues:
  • On examination, it was felt that the mechanism proposed by IAMAI did not give adequate cognizance to content prohibited under law and there were issues of conflict of interest, which were communicated to IAMAI in September 2020.
  • The Online Curated Content Providers or OCCPs had also proposed a Digital Curated Content Complaints Council along with the self-regulatory mechanism as a part of its proposed two-tier structure.
  • The proposal, however, was shot down by the Ministry of Information and Broadcasting, which will now oversee these platforms.

Way Ahead

• Establish a comprehensive three-tier grievance redress system. 
  • The first level of control will be provided by the OTT Platform itself, through a grievance officer. 
  • The second level will be a self-regulatory institution composed of content publishers and their associations. 
  • An inter-department committee set up by the MIB at the third level will provide oversight and hear appeals for decisions made at level two or even if the MIB refers a complaint to the inter-department committee.

Source: IE