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June 2019

TRAI TO REGULATE 'NET SERVICES


The TRAI is considering regulating at least some communication services, and its recommendation will be out within a month. The range of internet apps that have come up for possible regulation can be broadly divided into 3 categories:

  • Apps That Substitute Telco's Services
  • Apps That Stream live TV Channels
  • Apps That Provide Demand On Video Content like Netflix

Currently, TRAI will rule on regulation of only those apps that overlap in providing telco's services.



FOCUS ON TELECOM OVERLAP

"Communication services is a broad term and can include both real time and non-real time services such as email or Internet websites to govern which the IT Act is already there. We are, however, restricting our scope to those OTT services whose function is similar to those TSPs that have a licence," said TRAI chairman R.S. Sharma.

The regulatory imbalance between TSPs (Telecom Service Providers) and OTT services formed the central question of the discussion at the TRAI open house.

Telcos are obviously perturbed that they pay hefty fees for telecom licenses and are closely supervised and regulated, which apps like WhatsApp have decimated the telco's communications market with free and un-regulated services which were "perfect substitutes".

Telcos demanded that communications apps be regulated with data localisation, maintaining call records, etc.



TRAI Is Currently Only Examining Regulation Of Services That 'Perfectly Substitute' Telco Services





SECURITY THREAT?

TRAI buttressed its argument for regulating communications apps by stating that False news and other aspects of OTT apps like WhatsApp were a threat to data privacy and national security.

The government of India's expert committee on data protection chaired by Justice Srikrishna said that current legal provisions & practices on surveillance, including the absence of any judicial oversight, fail to adequately protect the fundamental right to privacy.

False information shared on these social media platforms, especially during national or natural emergencies is a huge threat to the country and a prime example of the misuse and exploitation of these services.



REGULATED BY IT ACT

OTT apps said that they were already being regulated by the IT Act and adding more regulations will hamper the growth of the sector.



INTERNET FREEDOM

Others reminded TRAI of the importance to maintain freedom of the Internet, permitting free flow of internet content.


JUNE VERDICT

A consultation paper has already been put out and consultations received on regulating internet apps that overlap telco services. TRAI Chairman, Sharma said that the regulator will declare its recommendations by June 2019.



In Future TRAI Plans To Regulate Apps That Show Live TV Channels



OTT APPS STREAMING LIVE TV CHANNELS

After introducing the New Tariff Order (NTO) to make the broadcast ecosystem more transparent, TRAI is likely to soon look into apps that provide live transmission of TV channels.

These apps are un-regulated and often provide Pay TV channels without an additional charge, disturbing the implementation of the NTO.

"Carriage of TV programming has been licensed out to registered broadcasters who are then allowed to give the content to cable operators or satellite players, under a licensing framework. If a third party, like an app, is showing the same channels without paying carriage charges and licence fee, it creates disparity," a senior TRAI official, was quoted by the Economic Times.

"Either both should be under the ambit of the licence, or both should be exempted," the official added. A broadcasting licence is valid for 10 years in India, and the licensee must comply with the programming and advertising code under the Cable Television Networks (Regulation) Act, 1995.

Star India, Sony, Times Network & Zee, all whom offer such apps have opposed any regulatory intervention on OTT services.



No Plans By TRAI To Censor & Regulate Content Of Hotstar, Netflix etc



NETFLIX AMAZON: NO REGULATION

TRAI has explicitly clarified that video streaming services such as Netflix, Amazon Prime Video, and Hotstar are currently not under a regulatory lens. They are currently exempt from regulations.

Earlier this year, 9 (out of more than 32 Indian) OTT Video-on-Demand services including Hotstar, Voot, ZEE5, Arre, SonyLIV, ALT Balaji, Reliance Jio, Netflix and Eros Now decided to adopt a self-regulatory Code of Best Practices under the aegis of the Internet and Mobile Association of India (IAMAI).

There is a strong lobby that is demanding content regulation for OTT video streaming apps like Netflix, since "They stream content that is un-certified, full of vulgarity, sexually explicit, pornographic, profane, virulent, religiously forbidden & morally unethical." They also contend that "The self-regulatory code is a sham, a pretence."

Their petition has been accepted by a Supreme Court bench headed by Chief Justice Ranjan Gogoi. (See elsewhere in this magazine).




SOLUTIONS SOON?

The TRAI's recommendations are unlikely to get implemented, and will almost invariably be challenged in court.

Extended court battles are anticipated as arguments will rely on fundamental issues like freedom of speech, and regulation of the internet.

Even the Supreme Court is taking the issues raised seriously, as the recent petition on regulating & censoring Netflix, Hotstar and others is being heard by the Chief Justice of the Supreme Court. n