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US Tech Giants Resist Indian Telecom Networks‘ Attempt to Regulate Internet Services and Implement Network Usage Fees

Global technology giants are pushing back against attempts by India’s telecom companies to bring internet services under stricter regulation, arguing that such measures are unnecessary and could harm consumer interests. The Asia Internet Coalition (AIC), which represents major industry players like Amazon, Apple, Google, Meta, Microsoft, Netflix, and Spotify, has strongly opposed the inclusion of over-the-top (OTT) services in the proposed regulatory framework for telecom operators.

In a submission to the Telecom Regulatory Authority of India (TRAI), the AIC highlighted the fundamental differences between OTT services and traditional telecom operations. OTT services operate on the application layer, while telecom service providers (TSPs) operate on the network layer. The AIC emphasized that OTT providers do not have rights to acquire spectrum, obtain numbering resources, or interconnect with the public switched telephone network, unlike TSPs.

The AIC argued that OTT communication services are not substitutes for traditional telecom services, as they offer additional functionalities like group chats, voice notes, and in-app content sharing. The industry body warned that including internet services in the new framework could violate net neutrality principles and harm consumer interests.

The AIC also pointed out that OTT communication services are already regulated under existing laws, including as intermediaries under the IT Act and related rules. The industry body emphasized that there are sufficient regulations in place in India to oversee OTT services, including requirements for interception, content takedown, incident reporting, and user grievance redressal.

This resistance from global tech giants comes in response to a push by India’s top telecom operators, including Reliance Jio, Bharti Airtel, and Vodafone Idea, to bring OTT services under a new authorization framework. The telco operators have recommended that OTT providers contribute to network development costs based on their traffic consumption, turnover, and user base.

The telecom networks‘ push for stricter regulation reportedly stems from their struggle with low average revenue per user and the significant investments made in 5G airwaves. The telcos are seeking regulatory intervention to boost margins and address the financial challenges they face.

The AIC disputed claims of OTT services „free-riding“ on telecom infrastructure, arguing that OTT services have actually driven increased data consumption and revenues for carriers. The industry body also contended that regulating OTT services under the Telecommunications Act, 2023 would go beyond its intended scope, as clarified by the Union telecoms minister.

The debate in India reflects similar discussions in Europe and South Korea, where network operators are also advocating for contributions from tech giants. The ongoing debate underscores the complex relationship between telecom operators and tech companies in the digital age, as both sides seek to protect their interests and navigate regulatory challenges.

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