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Curbs mooted on free domestic calling using OTT apps
17-07-2015

WhatsApp, Skype, Viber may be hit, even as telco "zero-rating" platforms get conditional nod


A Department of Telecommunications (DoT) committee has tilted towards telecom operators in its recommendations on net neutrality, even while upholding the validity and utility of this concept. If its recommendations are implemented, consumers will no longer be able to make local and national VoIP phone calls at almost free rates (barring negligible data charges) using applications like WhatsApp, Skype and Viber. However, instant messaging and international calls through these services would remain free.

The committee's report will now be studied by the government even as it waits for a report from regulator Trai on the same matter before taking a final call. The committee has invited suggestions from the public through a discussion forum atmygov.in. 

The report called for disallowed VoIP services to be licenced in the same way as mobile operators are. This could mean that such service providers will eventually have to pay a licence fee, which could force them to start charging customers money for use of their services. 

The logic given by the committee is that calls made through the internet (through services such as Viber, Skype and WhatsApp) are nearly six times cheaper than those made through a conventional mobile network.

Other reports suggest that voice calls offered by telecom companies are about 12.5 times more expensive than those through OTT services; in the case of messages, the difference is 16 times. For a one-minute phone call, a customer is charged about 50 paise, while a one-minute call made through the internet costs four paisa, according to TRAI calculations.

While this "price arbitrage" clearly worried the panel, it maintained that there was no case for prescribing regulatory oversight on these OTT firms' overall operations.

Also, it claims that VoIP players enjoy a regulatory arbitrage as they do not have to comply with licencing conditions and fee such as those mandated on telecom operators. The committee felt that this arbitrage is a "matter of serious concern" for policy makers. "The committee reiterates its view that domestic OTT communication services (or rather internet telephony) should be regulated through exercise of licencing powers available under section 4 of the Indian Telegraph Act to ensure a level playing field," says the report. 

"In case of OTT (over-the-top) VoIP international calling services, a liberal approach may be adopted. However, in case of domestic calls (local and national), communication services by TSPs (telecom service providers) and OTT communication services may be treated similarly from a regulatory angle, for now. The nature of regulatory similarity, the calibration of regulatory response and its phasing could be appropriately determined after public consultations and Trai (Telecom Regulatory Authority of India)'s recommendations," the report said.

This is in line with the demands by telecom operators such as Bharti Airtel, Vodafone and Idea Cellular that there should be similar regulation for similar services.

Zero-rating stays, with riders

In contrast, the committee found no clarity on whether or not zero-rated platforms offered by telecom players violate net neutrality. In its opinion, zero-rating platforms can be treated on a case-by-case basis, and clearance sought from the telecom regulator TRAI.

Bharti Airtel's launch of the Airtel Zero platform on April 6 had triggered a debate on net neutrality. On the Airtel Zero platform, companies including start-ups can offer apps for free; the app maker has to pay the operator for customers' free usage (users don't have to pay any data charges).

Many experts feel this is against the principles of net neutrality; it also opened up the possibility of discrimination in favour of established, cash-rich internet application providers. This could potentially stifle innovation and kill the burgeoning start-up culture in the country.

While falling short of recommending a ban on zero-rating platforms, where telecom operators offer free browsing to consumers for websites that pay for it, the committee seeks to put a check on rampant misuse. It says that traffic management by telecom and internet service providers should be transparent and "improper (paid or otherwise) prioritization may not be permitted." 

"Unreasonable traffic management, which is exploitative or anti-competitive in nature, may not be permitted," the report says. 

Thumbs-down for Facebook's internet.org service

Facebook's much-touted, but highly controversial, internet.org service ??" through which it aims to provide free internet access in remote regions by tie-ups with telecom companies (Reliance Communications in India) ??" has also been flagged by the committee. Internet.org originally provided access to only a host of websites, leading to allegations of discrimination by those unrepresented on the platform. 

"..content and application providers cannot be permitted to act as gatekeepers and use network operations to extract value, even if it is for an ostensible public purpose. Collaborations between telecom service providers and content providers that enable such gatekeeping role to be played by any entity should be actively discouraged. If need be, Government and the regulator may step in to restore balance to ensure that the internet continues to remain an open and neutral platform for expression and innovation," says the report. 

No overall controls warranted

The committee did not recommend any controls for the fast-mushrooming internet applications that are proliferating the online mobile world. "Over-the-top application services have been traditionally available in the market for some time and such services enhance consumer welfare and increase productivity. Therefore, such services should be actively encouraged and any impediments in expansion and growth of OTT application services should be removed." 

However, the committee voiced its concern over the security of consumer and other info that flows over the internet, especially in view of national security. Many of the OTT players are unregulated and some of them have their servers located outside the country. 

Based on stories in Times of India, Business Standard



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