Mint Explainer: The debate on regulating messaging and streaming apps

Companies that offer such apps said in response to Trai’s paper that they ought not to be regulated under the Telecommunications Act as they are already “comprehensively regulated" under the Information Technology Act and other laws. Telecom companies opposed this, saying OTT apps rely on the underlying infrastructure and services they provide.

Mint delves deeper into the issue and what’s likely to come next. 

What did Trai propose in its consultation paper on service authorisation?

The telecom regulator sought comments from stakeholders on how to frame the terms and conditions to grant licences for services that fall under the new telecom law, which came into effect earlier this year. It asked stakeholders whether the existing regime should continue or a new, leaner authorisation regime should be introduced. It also asked for views on the fees for a proposed unified service authorisation regime that could replace the current circle-based system. 

The paper did not specifically mention OTT apps, but the regulator did ask stakeholders if certain new authorisations or subcategories of authorisations were needed under the Telecommunications Act, 2023, and what the terms and conditions for these new services should be. 

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In addition, Trai sought stakeholders’ suggestions on defining gross revenue, applicable revenue and adjusted gross revenue, and also asked if the authorisations for global mobile personal communications by satellite (GMPCS) and very small aperture terminal (VSAT CUG) should be merged. 

The regulator will hold an open-house discussion on the paper today (21 August).

What did telecom companies tell Trai?

Telecom service providers said in their submissions to the regulator that the new telecom law defines OTT platforms as ‘access services’, so they should therefore be brought under the licensing framework and require authorisation. “Bringing OTT communication services under the authorisation/licensing regime would ensure fair competition, address potential biases, and foster a level playing field within the telecommunication industry," said the Cellular Operators Association of India (COAI).

What did the OTT platforms say?

Industry bodies including the Internet & Mobile Association of India (IAMAI), Asia Internet Coalition (AIC), NASSCOM, Broadband India Forum (BIF) and US India Strategic Partnership Forum (USISPF), however, said OTT services were not within the scope of the Telecommunications Act, 2023. 

Some, like IAMAI, also highlighted that when the Telecom Act was introduced in Parliament, former telecom minister Ashwini Vaishnaw had clarified that “OTT has been regulated by the IT Act of 2000 and continues to be regulated by the IT Act. There is no coverage of OTT in the new telecom bill passed by Parliament". 

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They added that OTT services are already comprehensively regulated under the Information Technology Act, 2000, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021, and the Digital Personal Data Protection Act, 2023. They said they are also required to comply with the Consumer Protection Act, the Consumer Protection Rules, and the Competition Act. 

OTT industry bodies said they are “inherently different from telcos" as they operate on the application layer while telcos operate on the network layer, and therefore the “same service, same rule" analogy does not apply to them. Nasscom said OTT services are not “free riders" as they are one of the main drivers of telecom companies’ revenues.

How did the telecom industry respond to this?

On 20 August, the Cellular Operators Association of India said in response to the OTT platforms’ comments that the characterisation of telecom companies and OTTs as working on different technology layers, as reported by some media, was flawed and misrepresented the technical reality of modern IP communications. 

COAI director general SP Kochhar said, “It is crucial to understand that TSPs (telecom service providers) operate across all seven layers of the Open Systems Interconnection (OSI) model. This comprehensive approach ensures end-to-end service delivery, from physical infrastructure to user-facing applications. Their service delivery is on the application layer of the OSI stack. 

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“Conversely, OTT platforms function primarily at the application layer, relying on the underlying infrastructure and services provided by TSPs. These platforms leverage the robust network architecture and OSI layers established and maintained by telecom operators to deliver their services."  He said OTT services were “competing and substitutable" with telecom companies and should thus be included under the new framework.

What’s next? 

Trai will host an open house discussion on the consultation paper on Wednesday, where these issues are likely to come up again, before sending its recommendations to the telecom department. 

To be sure, these recommendations are not binding on the government, which can ask the regulator to reconsider them. Changes, if any, to the existing licensing regime will be made by the telecom department, taking into consideration Trai's recommendations. 

However, officials at the ministry of electronics and information technology said OTT apps such as WhatsApp and Telegram cannot come under Trai’s proposed authorisation regime as they were not included in the consultation for the new telecom law.