OTT platforms paying fee to telecom operators will dent digital ambitions
Imagine trying to watch Never Have I Ever on Netflix. Your popcorn is prepared, and your drinks are chilled. You turn on the TV and the Netflix logo appears. You press play and the little spinning wheel starts moving. Twenty minutes later the circle is still there; the content is not loading.
Over the past few years, Netflix and many other companies have put significant efforts and have invested heavily in ensuring that such a scenario does not happen frequently. Content delivery networks (CDN), data centres and other forms of infrastructure have been developed to ensure the best possible user experience. The internet has grown by adding new services and creating business models that enable the reliable delivery of content. Imagine a set of cogs, forming a well-oiled machine. Every time a user requests a certain form of content, different cogs in this machine work together to ensure content quality and efficiency. The responsibility for all of this does not fall on only one party; it falls on everyone who is part of the internets infrastructure.
India, however, is currently engaged in policy discussions that could damage this well-oiled machine. Indian policy makers are contemplating the idea of requiring big technology companies, like Google, Netflix, or Amazon, to pay a fee to telecommunication providers for the traffic they carry on their behalf. This is one of the options being considered by the Telecom Regulatory Authority of India (TRAI), which according to reports, is contemplating some form of revenue sharing mechanism between internet companies and telecom operators.
In effect, this policy will hand in the internet keys to the two dominant players, namely Jio and Airtel, which account for nearly 70 per cent of the market. Telecommunication providers control the access networks required to access the internet. The general rule though on the internet is that no network is more important than another; all are equal in terms of their role in ensuring the user is able to access, consume and create content on the internet. By imposing a toll, policy makers are effectively implying that telecommunication networks are somewhat more important, the self-proclaimed guardians of the internet.
Earlier this year, TRAI initiated a consultation inviting stakeholder views on whether a converged regulator for telecom, broadcasting, and digital services is required. Among other things, the consultation mistakenly suggests that telecom service providers (TSPs) incur insurmountable infrastructure costs, while internet companies, going by the moniker of over-the-top (OTT) entities, do not bear any such costs. Furthermore, the consultation argues that the recent increase in OTT media consumption has been challenging for telecom service providers (TSPs) and their ability to support more content, devices, and users with limited infrastructure resources. Through these assertions, TRAI has kicked off a process that would pit telecom operators and OTTs against one another. Such a policy proposition will only harm Indian users.
India is not alone in this. The European Union has been having advanced discussions, while Brazil and Vietnam are both toying with similar ideas, making this issue a global concern. The only country where this idea is fully implemented is South Korea and the experience so far has proven to be detrimental to users and the open Internet. More specifically, evidence shows that the cost of internet transit has skyrocketed, latency has dramatically increased, and South Korean policy makers have been engaging in a revolving door of regulation to ensure its effectiveness and efficacy. The end result has been an internet environment that is expensive and unreliable; it is an environment where users are enjoying lower quality services.
In India, the ramifications are likely to be far greater when considering the digital divide that continues to exist in the country and quality of services remain far from ideal. For instance, a post pandemic study conducted in India found that 80 per cent of school-going children were left without access to education during school closures with poor connectivity being cited as one of the major impediments. With wired internet subscribers accounting for only 3.74 per cent of the total internet subscribers, further increase in tariffs is bound to have a deleterious impact on the countrys digital ambitions.
With fair share discussion gaining traction in the EU and Brazil, telcos in India have again started demanding a fee from OTTs. TRAI and policymakers in India, however, would be well advised to shun this move to ensure that the internet remains free, fair, and open for anyone to innovate and create.