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Star takes a dig at TRAI, wants telcos to share rev with OTT players for driving data usage

MUMBAI: Having created their digital content platforms, television broadcasters in India are worried about having to pay carriage fees to internet service providers.

Taking a dig at the Telecom Regulatory Authority of India (TRAI), Star India said that there seems to be a clear suggestion in the consultation paper that it is the duty of the regulator to guarantee the revenues of the telcos.

Instead of looking at the issue from the consumers’ point of view, there seems to be an inclination to try to protect incumbent and, in many cases, outdated revenue streams of the telcos, Star said.

Star also suggested that the government should mandate multi-system operators (MSOs) to provide two-way connectivity and bind them to compulsory provisioning of broadband as part of licensing conditions.

Furthermore, local cable operators (LCOs) should be treated as ISPs and their wire lines should be considered public utilities, which will ensure that they are paid suitably by the MSOs towards access to last mile.

Showing strong support for net neutrality, Star India has suggested that the TRAI needs to ponder whether telcos should pay a share of data revenue for driving data consumption in the country through their innovative services rather than the other way round.

One of the questions posed by TRAI in its consultation paper on ‘Regulatory Framework for OTT Services’ is if the OTT players should pay for use of the telecom service provider’s (TSP) network over and above data charges paid by consumers.

Giving its response to the question, Star India said, “We are of the view that the real question that needs to be considered is whether the TSPs should pay the OTT’s a share of data revenue for significantly driving data consumption which is borne out by the manifold increase in telco data revenues.”

The broadcaster said that OTT players should not be asked to pay for use of the telcos’ network over and above data charges paid by consumers.

It further stated that OTT players should not be penalised for utilising the telcos’ pipes more efficiently. It also contended that OTTs are paying for network usage, streaming and technology costs.

Being a content company, it is natural for Star India to lean on the side of net neutrality and free internet. The company owns and operates a video OTT service called Hotstar.

As the country’s biggest sports content owner, it is also engaged in a full-drawn legal battle with telcos over the issue of providing live cricket scores to their subscribers.

The broadcaster further said that it is too early for a regulatory framework for OTT services as the internet ecosystem is still in an embryonic stage with limited penetration in India, high-speed broadband remaining a pipe dream, and consumer propositions and business models around the internet still in a state of flux.

Noting that the mobile value-added services (VAS) industry had an untimely death due to revenue-sharing conflicts, Star stated that any regulatory intervention that mandates payments by OTTs to telcos will throttle the growth of OTT players.

It also observed that telcos should not differentiate with regard to the quality of service based on an economic arrangement with OTT players and that charging users extra for specific apps or services will overburden them, which, in turn, will lead to them not using the services at all.

It said that the relationships between telcos and OTT players should be governed by principles of net neutrality and fair and reasonable business practices.

Star mentioned that there should be no blocking by telcos and internet service providers (ISPs) of access to legal content, applications, services on non-harmful devices, no slowing or ‘throttling’ by way of impairing or degrading lawful internet traffic based on content, applications, services on non-harmful devices, no toll booth keeping whereby TSPs/ISPs impose charges on OTT services as a precondition for access or usage in any network, and no fast lanes or paid prioritisation.

Maintaining that OTTs have created a level playing field for all, the broadcaster said that telcos or any other player is free to evolve their current business models to participate in this.

It added that there is no need for any sectoral regulatory framework or intervention. Only ‘issue-specific’ applicable laws are required to be framed/updated, or necessary amendments may be carried out in the UASL or ISP licences.

“Firstly, there is no regulatory imbalance with regard to internet-based services and apps. It is the telecom operators who own spectrum, which is a public resource, and hence needs to be licensed. Internet services do not need licences. Telecom operators provided the pipe or network on top of which internet services exist. So, there’s a clear distinction between the two,” Star submitted.

“Secondly, no imbalances exist since TSPs also have their own OTT services [e.g. Hike, Wynk], which are governed by the exact same laws [under IT act, copyright, competition laws] as do the OTT services by standalone players.”

It further pointed out that internet services are already covered by the Information Technology Act, 2008, the Copyright Act, and competition laws. Therefore, there is no need for a separate regulatory framework or licensing.

Expressing concern that the entire paper is silent on piracy issues in the OTT space, the broadcaster said that it would like to make separate submissions in this regard.

“Towards this end, there is an urgent need to consider expanding the role of CERT. Also necessary amendments are required to be made to the IT Act that would help combat piracy,” Star reasoned.

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