New Delhi: As many as 128 of India’s biggest start-ups have written a joint letter to the Telecom Regulatory Authority of India (TRAI), objecting to demands by telecom operators to impose network usage fees on internet-based service providers such as WhatsApp, Netflix and Telegram, while also bringing them under regulatory regime.
The letter, sent Tuesday, follows the release of a July consultation paper on the regulation of over-the-top (OTT) players and the selective banning of applications by TRAI, in response to which telecom service providers (TSPs), such as Reliance Jio, Bharti Airtel and Vodafone Idea, had earlier this month reiterated their demand that OTTs be brought under a regulatory regime so as to ensure a level playing-field.
The TSPs had called for OTTs being asked to pay service providers a fair and reasonable charge for the increased data use they generate, and it was in response to this demand that the startups have written their letter now.
“As a key representative of the Indian economy and internet innovation ecosystem, we are writing to urge the Authority to continue their support for net neutrality principles and caution against any move towards overregulation of internet services being described as Over-The-Top (“OTT”) services, which may have discriminatory consequences,” the letter by the startups said.
Internet services are already regulated under the IT Act, 2000, it added.
The startups said they are “principally against” bringing such services under the same or similar regulatory framework as telecommunications service providers.
Stating that internet applications and services are vibrant, dynamic, and innovative, and are rapidly evolving, the letter noted that most services provide multiple functions and services to users. Therefore, it went on to argue, categorising them as ‘substitute’ services, or segmenting them as messaging, video and other applications, is incorrect.
“This simplistic understanding may stem from the use of the term ‘OTT’, a terminology predominantly used by TSPs,” the letter said. “We urge TRAI to understand that the regulatory difference between TSPs and internet applications/service providers do not requisite an intervention, especially because there are inherent structural and functional differences between the two.”
The representatives of the startups that signed the letter included Zerodha Co-Founder Nithin Kamath, Webveda Founder Ankur Warikoo, TrulyMadly co-founder Snehil Khanor, Razorpay co-founders Harshil Mathur and Shashank Kumar, Toppr.com CEO Zishaan Hayath, Rapido co-founder Rishikesh SR, PhonePe founder Sameer Nigam, Paytm Founder Vijay Shekhar Sharma, MapmyIndia CEO Rohan Verma, Matrimony.com Founder Murugavel Janakiraman, ixigo co-founder Aloke Bajpai, IndiaMART Founder Dinesh Agarwal and 99Games Online Founder Rohith Bhat, among others.
‘Maintain internet as an open platform’
In their letter, the startups also said that that the internet is not a simple two-sided market and that the services delivered by them reach users “via a complex network of networks called the internet, and not value-added services which are delivered by telecom operators”.
They added that they pay for the sending and receiving of content via the internet through payments to their own internet service providers, much like any other internet user does.
The letter also stated that the suggested form of regulatory framework, where TSPs essentially have the power to tilt the playing field to favour one website, application or service or another, will inevitably lead to discrimination, the creation of a non-level playing field, the setting up of entry barriers, and an increased compliance burden.
Further, the suggested methods of categorising an application or services as “large traffic generators” and deciding the “fair and proportionate share/contribution” are arbitrary and lack clarity, which may lead to such decisions being taken on a case-to-case basis, the letter argued.
“We call for the internet to be maintained as an open platform on which network providers treat all content, applications, and services equally, without discrimination,” the startups said. “This includes not putting a service at a competitive disadvantage, either by imposing additional network fees or other regulatory obligations such as licensing under a telecommunications framework.”
They added that telecom licensing requirements would impose additional costs that could harm India’s start-up ecosystem.
“If anything, these obligations will favour large multinational conglomerates who can afford to adapt to such regulations,” they said. “Giving TSPs the key to be able to control these factors will very likely impact the thriving Indian start-up ecosystem.”
The startups also urged TRAI to further strengthen, “rather than dilute”, the principles outlined in the 2016 ‘Prohibition of Discriminatory Tariffs for Data Services Regulations’, by which it restricted the charging of discriminatory prices to consumers based on the content.
(Edited by Zinnia Ray Chaudhuri)
Also read: TRAI seeks views from industry on regulation & selective ban of OTT apps after govt request