TRAI Consultation on OTT Regulation Has Consequences Beyond Net Neutrality

Beyond the issue of net neutrality, it is the issue of licensing conditions of OTT communication services like WhatsApp and Signal that will be most concerning.

India is rapidly digitising. There are good things and bad, speed-bumps on the way and caveats to be mindful of. The weekly column Terminal focuses on all that is connected and is not – on digital issues, policy, ideas and themes dominating the conversation in India and the world.

The latest consultation by Telecom Regulatory Authority of India (TRAI) about regulatory mechanisms for Over The Top (OTT) communication services and select banning of these services has created a stir around net neutrality. TRAI raised many questions, one being the impact on net neutrality if OTTs were to tie up with telecom players or required to pay them based on traffic or bandwidth. Beyond net neutrality, this consultation has consequences on privacy, encryption, internet shutdowns and may create a new internet regime in India.

TRAI has been requested by the Department of Telecom to address issues around regulation of OTTs with the Parliamentary Standing Committee on Communication and Information Technology’s recommendations on selective banning of OTTs as an alternative for shutdowns. This has effectively opened up a host of issues on regulation of OTTs under the telecommunications regime.

With regards to the issue of net neutrality, telecom service providers (TSPs) in India want OTTs to pay for their capital expenditure of 5G expansion as they also pay a licensing fee to DoT. OTT communication services like WhatsApp, Telegram, Signal and other apps have cut into the revenues of TSPs while not paying any of these extra licensing costs. The demand for a fee from OTTs to pay for the network expansion is considered unfair when customers are already paying for telecom services. A demand for any form of network fee would violate net neutrality and thus will limit the emergence of new OTTs by giving preferential treatment to the ones paying a fee.

The debate around net neutrality was settled earlier with the fight against Free Basics-Internet.org and the general public opposition to Facebook becoming the gatekeeper. Those conditions that allowed the general public to champion digital rights do not exist today and the risk of net neutrality being repealed in some form does exist.

The Government of India has been actively expanding regulations to stop Big Tech firms’ practices and has been actively promoting Indian alternatives. Limiting Facebook’s plans around the internet in India has been beneficial for Indian startups and other internet companies. But the current demand against net neutrality is domestic, it can also hurt Indian IT firms if they are subjected to the same regulatory setup. What form this regulation takes needs to be seen, but a fee for foreign firms and a relaxation for Indian organisations in some measure can also come.

Beyond the issue of net neutrality, it is the issue of licensing conditions of OTT communication services like WhatsApp and Signal that will be most concerning. The demand to regulate OTTs is coming as an alternative solution to internet shutdowns. If applications like WhatsApp, Facebook or Twitter can be temporarily blocked during emergencies, then there won’t be a complete internet shutdown, is the argument.

Except one can’t block these apps temporarily and the only way to do this would be to build a Chinese-style Great Internet Firewall to inspect all the networks for real-time censorship. BSNL in its response to the consultation paper has concluded it is hard to ban specific OTT services. But such an infrastructure can technically be built and India’s 5G telecom expansion could be the place where this happens.

Current dimensioning of TSP infrastructure had not envisaged such type of deep packet inspection at the time of roll out of its network. Implementation of selective banning of OTT will impact the processing power of resources and huge augmentation in processing power will be required at TSP end. It is pertinent to mention that such type of selective barring can be done for limited time for limited OTT services. There will be need to define this time period and limit of number of OTT service to be banned at a time, this will help to designing and expanding the TSP infrastructure accordingly.” – BSNL response on selective banning of OTTs

The other aspect of this regulation is also how it will regulate end-to-end encrypted systems for internal security requirements. The Global Encryption Coalition is concerned with TRAI’s plans for regulation of OTTs and the consequences on encryption. At present, Section 69 of the Information Technology Act does give the Government of India powers to intercept and decrypt encrypted content. For a long time the question of WhatsApp encryption and the need to identify the contents of messages spreading hate and misinformation has been debated in our courts.

The current TRAI consultation recommendations will determine whether India adopts a new telecom regime. This is not the first time we have opened these conversations, but with the new Telecom Bill likely to be tabled in the parliament, these consultations will determine the fate of Indians digital rights. The draft Indian Telecommunications Bill 2022 already has several provisions concerning the TRAI’s present consultation, some of those provisions are expected to change before it is introduced in parliament.

A host of these regulatory demands will likely be implemented in Manipur with the near complete internet shutdown in the state. Manipur’s road towards access to the internet could likely be with new OTT regulations, with no interest from any quarters to address the challenges in the state.

If India does push for regulation of OTTs registration in India or presses for additional costs for operations, several international companies are likely to exit the market. This is what happened when India brought its VPN rules asking VPN companies to maintain logs. One can term it going back to the licence raj era, with the increased regulations that are already under development limiting imports of computers, telecom equipment into India.

Srinivas Kodali is a researcher on digitisation and a hacktivist.