Around 129 start-up founders have written to the Telecom Regulatory Authority of India (TRAI) opposing telecom operators’ demand for regulating over-the-top (OTT) services. The founders, including Paytm’s Vijay Shekhar Sharma, PhonePe’s Sameer Nigam, Zerodha’s Nithin Kamath, Razorpay’s Harshil Mathur, and People Group’s Anupam Mittal, have also opposed any sort of revenue sharing-mechanism between OTTs and telecom operators, saying such a move would affect principles of net neutrality outlined by the government in 2016. Further, such a move would also lead to over-regulation of internet services.
This is in response to suggestions made by telecom service providers including Reliance Jio, Bharti Airtel, and Vodafone Idea Limited (Vi), and their association — Cellular Operators Association of India (COAI), that internet companies should pay telcos for telecom network costs based on the traffic these platforms generate and other such parameters. The basis for this demand is that since the services offered by OTTs are similar to those provided by telcos, the principle of same service, same rules should be applicable.
Start-ups have disputed this argument stating that the services are not similar. They have highlighted that telcos have the power to tilt the level-playing field to favour one website/application/service or another. This will inevitably lead to discrimination, a non-level playing field, entry barriers, and an increased compliance burden. They pointed out that the suggested methods of categorising an application or service as a large traffic generator and deciding the fair and proportionate share/contribution are arbitrary and lack clarity. According to the start-ups, this proposal of the telcos can dilute net neutrality principles and may drive smaller players out of the market, limit user choice and so on.
The start-ups have highlighted that in February 2016, TRAI had issued the Prohibition of Discriminatory Tariffs for Data Services Regulations, by which it restricted the charging of discriminatory prices to consumers based on the content. In the spirit of this order, the regulator must caution against any demand to charge network fees from large traffic generators, prevent telcos from trying to engage in such rent-seeking behaviour, and not impose telecommunications licensing frameworks on internet companies.