Proposed US bill to charge fees from large apps should be adopted in India, says COAI

According to the Cellular Operators Association of India (COAI), the government should adopt a bill, similar to a proposal in the US Congress, that would make large internet apps contribute to infrastructure costs to help lower broadband costs for consumers.

The bill, sponsored in US Congress aimed at lowering broadband costs for consumers, proposed a direction to telecom regulator Federal Communications Commission (FCC) to mandate social media platforms, streaming services apps, cloud computing service providers like WhatsApp, YouTube, Netflix, Google etc. to contribute to universal fund that is used for building networks. The proposed bill named, Lowering Broadband Costs for Consumers Act of 2023, has classified social media platforms, streaming service, over- the-top (OTT) messaging service, video gaming service, videoconferencing service, e-commerce platform, search engines under edge services providers.

COAI noted that the proposed bill in the US vindicates the stand taken by service providers in India. The bill proposes to levy charges only on those entities that generate more than 3 per cent of the estimated quantity of broadband data transmitted in the US and more than $ 5 billion in annual revenue.

Lt. Gen. Dr. S.P. Kochhar, director general, COAI, said that telecom operators in India want only large traffic generators (LTGs), which are a handful of foreign companies, to contribute to the infrastructure cost and similar provisions have been proposed in the US Congress.

Kocchar further added that apps are already operating various business models which include advertisement-based free service or lower priced service for customers or fully paid subscription. The telecom operators in India need average revenue per user of Rs 500 to meet their current infrastructure cost and future requirement. He noted that around 80 per cent of traffic on telecom networks is generated by a handful of LTGs.

Meanwhile, industry bodies representing internet players have opposed the move of charging a fee from apps as they believe it will hurt smaller players, start-up ecosystems as well as violate net neutrality principle that aims to enhance access of broadband services at affordable cost for consumers.