Background
The past decade has witnessed exponential growth in the telecommunications sector. Specifically in India, access to cheaper internet packages and economical smartphones paired with wider accessibility to each of the former have contributed to the expansion of the telecommunication ecosystem. Once considered a resource which only the privileged had access to, the internet now is a mass phenomenon, opening doors to a plethora of virtual possibilities for individuals across gender, age and territories. Currently, internet as a means is used significantly for voice/video messaging and audio/video content creation for consumption by the public at large. Naturally, the use of over the top ("OTT") platforms have gained momentum. OTT platforms (common ones being Netflix, Disney Hotstar, YouTube) deliver streaming content via the internet across devices including mobile phones, smart televisions, computers, tablets etc.
Logically, the next step would be to regulate OTT platforms, which in India, is currently under the ambit of Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 ("IT Rules") read with the Information Technology Act, 2000 ("IT Act"). An 'intermediary' under the IT Act inter alia includes any person who on behalf of another person transmits electronic record or provides any service with respect to the record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers etc.
TDSAT Order
In its order dated October 4, 2023, the Telecom Disputes Settlement and Appellate Tribunal, New Delhi ("TDSAT") took a view that OTT platforms cannot be regulated by the Telecommunication Authority of India ("TRAI") Act, 1997 and can only be regulated by the IT Act and the IT Rules.
The TDSAT order was issued in the matter of All India Digital Cable Federation ("AIDCF") v. Star India Private Limited ("Star"), where AIDCF contended that Star is in violation of Regulation 3(2) of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 ("TRAI Regulation"). Regulation 3(2) of the TRAI Regulation deals with the broadcaster's obligation to provide to the distributor of television channels (which includes DTH operator, multi-system operator) on non-discriminatory basis, the signals of television channels. The allegation raised by AIDCF against Star was that Star was permitting its users to stream the contents of Star Sports television channel free of cost on various OTT applications accessible on the users' mobile, whereas AIDCF was required to pay Star for the same. AIDCF argued that the OTT platforms would fall under the ambit of 'distribution platform' (which means distribution network of a direct to home operator, multi- system operator, head end in the sky operator or internet protocol television operator) under the TRAI Regulations, and therefore, the TDSAT has the jurisdiction to hear the matter.
Addressing the question of maintainability of the petition, the TDSAT held that prima facie, OTT platforms are not television channels, nor do they require any permission or a licence from the Central Government and therefore, regulation of OTT platforms fall outside the purview of TRAI and TDSAT.
TRAI Consultation Paper on OTT
The TDSAT's interpretation of OTT platforms being outside TRAI's regulatory scope has been dealt with succinctly in the 'Consultation Paper on Regulatory Mechanism for Over-the-Top Communication Services and Selective Banning of OTT Services' ("Consultation Paper") dated July 7, 2023 issued by TRAI. Through a comparative analysis of obligations imposed on licensed telecom provider and OTT service providers under the various Indian regulations governing the telecommunications segment, the Consultation Paper established that OTT platforms are not akin to the standard telecom/internet service providers under TRAI. The comparative analysis is as below1:
|
# |
Obligation |
Applicability |
|
|
Licensed Telecom Providers |
OTT Service Providers |
||
|
1. |
Obligations under the Indian Telegraph Act, 1885 |
Yes |
No |
|
2. |
Terms and conditions under TRAI License Agreement |
Yes |
No |
|
3. |
Regulatory fees payable to the Department of Telecommunications ("DoT") under the TRAI License Agreement |
Yes |
No |
|
4. |
Spectrum related charges payable to DoT for the right to use of spectrum |
Yes |
No |
|
5. |
Obligations under the regulations/ orders/ directions issued by TRAI |
Yes |
No |
|
6. |
Obligations on body corporates or intermediaries under The Information Technology Act, 2000 |
Yes |
Yes |
The comparative analysis supports the TDSAT's view in the matter of AIDCF v. Star above. The Consultation Paper has posed, inter alia, questions surrounding how to define OTTs, what would be the competent authority to oversee the licensing/regulatory aspects of OTTs etc.
Conclusion
While the TDSAT has adjourned the matter of AIDCF v. Star for final hearing in December 2023 and the Consultation Paper is being evaluated post receiving comments from stakeholders, there appears to be no debate on whether OTTs need to be brought under a regulatory/departmental regime. Though OTT platforms may not be akin to a 'telecom service provider', they cannot operate independent of telecom services. Therefore, it may not be prudent to exclude OTT platforms entirely from TRAI's regulatory jurisdiction. How will the regulatory gaps be addressed and how will it impact operations of OTT platforms in India would undoubtedly garner attention from various stakeholders across the globe.
Footnote
1. Source: TRAI Consultation Paper on Regulatory Mechanism for Over-the-Top Communication Services and Selective Banning of OTT Services, July 7, 2023.
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