Consultation Paper No.

10/2023

भारतीय दू रसंचार विवियामक प्राविकरण

Telecom Regulatory Authority of India

Consultation Paper on

Regulatory Mechanism for Over-The-Top (OTT) Communication Services,

and Selective Banning of OTT Services

New Delhi, India

07.07.2023

Mahanagar Doorsanchar Bhawan, Jawahar Lal Nehru Marg, New Delhi- 110002
Written Comments on the Consultation Paper are invited from the

stakeholders by 04.08.2023 and counter-comments by 18.08.2023. Comments

and counter-comments will be posted on TRAI’s website www.trai.gov.in. The

comments and counter-comments may be sent, preferably in electronic form,

to Shri Akhilesh Kumar Trivedi, Advisor (Networks, Spectrum and Licensing),

TRAI on the email ID [email protected].

For any clarification/ information, Shri Akhilesh Kumar Trivedi, Advisor

(Networks, Spectrum and Licensing), TRAI, may be contacted at Telephone

No. +91-11-23210481.

i
 CONTENTS

Chapter Topic Page No.

Chapter I Introduction and Background 1

Chapter II Examination of the Issues Related to 9

Regulatory Mechanism for Over-The-Top (OTT)
Communication Services

Chapter III Examination of the Issues Related to Selective 58

Banning of OTT Services

Chapter IV International Practices 69

Chapter V Issues for Consultation 84

ANNEXURE

Annexure 1 DoT’s Back Reference Dated 07.09.2022 88

List of Acronyms 92

ii
 CHAPTER I:
INTRODUCTION AND BACKGROUND

A. Introduction

1.1 In July 1992, the Government of India opened eight value added services (viz.
Electronic Mail, Voice Mail, Data Services, Audio Text Services, Video Text
Services, Video Conferencing, Radio Paging, Cellular Mobile Telephone) for
private participation and introduced a licensing regime for telecommunication
services in the country. Subsequently, in the year 1994, the licenses for cellular
mobile telephone services were granted to private entities for the first time.
Since then, many new telecommunication services have been brought under
licensing regime. At present, the Government of India follows Unified Licensing
Regime for telecommunication services. Eligible entities may obtain appropriate
authorizations under Unified License from the Government and provide a range
of telecommunication services to their customers.

1.2 In the year 1997, Telecom Regulatory Authority of India (hereinafter, also
referred to as, “the Authority”) was established through an Act of Parliament
namely ‘The Telecom Regulatory Authority of Inia Act, 1997’. The Authority is
mandated to regulate telecommunication services, protect the interests of
service providers and consumers of the telecommunication sector, and promote
and ensure orderly growth of the telecommunications sector in the country.

1.3 India is currently the world’s second-largest telecommunications market. As on

31.03.2023, there were 1.172 billion1 telephone subscribers in the country. Till
about 2012, voice telephony and Short Message Service2 (SMS) were the
flagship telecommunication services in the country. Thereafter, internet

1
Source: TRAI’s press release on Telecom Subscription Data as on 31st March 2023, accessible at
https://trai.gov.in/release-publication/reports/telecom-subscriptions-reports
2
Short message service (SMS) is a facility that enables a mobile device to send, receive and display messages of
up to 160 characters. Messages received are stored in the network if the subscriber device is inactive and are
relayed when it becomes active.

1
 services, particularly Broadband3 internet services, have witnessed a
remarkable growth in the country. The broadband subscriber base in the
country leapfrogged by 55 times from a modest base of about 15 million in
December 2012 to about 832 million in December 20224. The compound annual
growth rate (CAGR) of broadband subscriber base in India was about 49%
during the period from the year 2012 to 2022.

1.4 With the growth5 in mobile and fixed broadband penetration, a wide variety of
Over-the-top (OTT) services have become available to consumers. As per
International Telecommunication Union (ITU), OTT is an “application accessed
and delivered over the public Internet that may be a direct technical/ functional
substitute for traditional international telecommunication services.” 6 The best-
known examples of OTT are Whatsapp, Telegram, skype, etc.

1.5 In the past one decade, the OTTs have hugely impacted the telecommunication
ecosystem worldwide. As a result, the impact of OTTs is being analyzed in many
countries. In India, initial attempts to analyze the impact of OTT services were
made in the year 2015 separately by Telecom Regulatory Authority of India
(TRAI) and the Department of Telecommunications (DoT), Government of
India. TRAI issued a consultation paper on Regulatory Framework for Over-the-
top (OTT) services dated 27.03.20157 for consultation with stakeholders. The
said consultation process remained inconclusive. Besides, DoT issued ‘Net
Neutrality DoT Committee Report’8 in May 2015. The said report examined,
inter-alia, the OTT services, and their impact on the telecom sector.

3 Broadband technology allows for high-speed transmission of voice, video and data over networks and ICT
applications.
4 Source: TRAI’s reports titled ‘The Indian Telecom Services Performance Indicators’ for October-December 2012

and October-December 2022, accessible at https://trai.gov.in/release-publication/reports/performance-indicators-

reports
5 It is noteworthy that most of the growth has been witnessed in the mobile broadband segment, with only

incremental growth in the fixed broadband segment.

6 Source: Recommendation D.262 (05/2019) issued by Telecommunication Standardization Sector of International

Telecommunication Union (ITU-T), available at https://www.itu.int/rec/T-REC-D.262-201905-I

7 The said consultation paper is available at TRAI’s website at URL: https://trai.gov.in/sites/default/files/OTT-CP-

27032015.pdf.
8 The said report is available at DoT’s web-site at URL:

https://dot.gov.in/sites/default/files/Net_Neutrality_Committee_report%20%281%29_0.pdf

2
1.6 Thereafter, in the year 2016, DoT, through a reference letter dated 03.03.2016,
requested TRAI to provide its recommendations on net neutrality including
traffic management and economic, security & privacy aspects of OTT services,
etc. Considering the complexity of the issues, referred to in the DoT’s reference
letter dated 03.03.2016, and other interrelated issues, the Authority chose to
deal with specific issues through distinct consultation processes. The Authority
released the following recommendations and regulations pertaining to the
issues referred to in the DoT’s reference letter dated 03.03.2016:

Date Recommendations and Regulations

08.02.2016 TRAI issued ‘The Prohibition of Discriminatory Tariffs for Data

Services Regulations, 2016’.

24.10.2017 TRAI sent the Recommendations on ‘Regulatory Framework

for Internet Telephony’ to DoT.

28.11.2017 TRAI sent the recommendations on ‘Net Neutrality’ to DoT.

16.07.2018 TRAI sent the recommendations on ‘Privacy, Security and

Ownership of Data in the Telcom Sector’ to DoT.

1.7 In respect of OTT services, the Authority issued ‘Consultation Paper on

Regulatory Framework for Over-The-Top (OTT) Communication Services’ dated
12.11.20189 and raised various issues for comments and counter-comments
from stakeholders. Based on the comments received on the issues raised in
the said Consultation Paper and further analysis, the Authority sent its
Recommendations on ‘Regulatory Framework for Over-The-Top (OTT)
Communication Services’ dated 14.09.202010 to DoT. The said
recommendations are reproduced below:

9 The said consultation paper is available at TRAI’s website at URL:

https://trai.gov.in/sites/default/files/CPOTT12112018.pdf
10 The said recommendations are available at TRAI’s website at URL:

https://trai.gov.in/sites/default/files/Recommendation_14092020.pdf

3
 “3.1 The Authority recommends that
i. Market forces may be allowed to respond to the situation without
prescribing any regulatory intervention. However, developments shall be
monitored and intervention as felt necessary shall be done at appropriate
time.
ii. No regulatory interventions are required in respect of issues related with
Privacy and security of OTT services at the moment.
iii. It is not an opportune moment to recommend a comprehensive
regulatory framework for various aspects of services referred to as OTT
services, beyond the extant laws and regulations prescribed presently.
The matter may be looked into afresh when more clarity emerges in
international jurisdictions particularly the study undertaken by ITU.”

B. DoT’s Back Reference Dated 07.09.2022

1.8 Thereafter, through a back reference dated 07.09.2022 (Annexure 1), DoT
requested the Authority to reconsider the Recommendations on ‘Regulatory
Framework for Over-The-Top (OTT) Communication Services’ dated
14.09.2020 and suggest a suitable regulatory mechanism for OTTs, including
the issues relating to ‘selective banning of OTT services’ as part of its
recommendations in accordance with the provisions of section 11 of TRAI Act
1997 (as amended). The said back reference is reproduced below:
“This has reference to the recommendations of TRAI of ‘Regulatory Framework
for Over–The–Top (OTT) Communication Services’ dated 14.09.2020. These
recommendations have been considered by the Government and the following
is submitted in this regard-
i. Whereas TRAI has recommended that “No regulatory interventions are
required in respect of issues related with Privacy and security of OTT
services at the moment", it has not provided any detailed justification for
recommending the same.
ii. In view of the humongous growth of OTT services in the recent past and
these services having reached a matured stage, there is a need to

4
 holistically look into the various aspects of these services including
regulatory, economic, security, privacy, and safety aspects. This is also
in keeping with para 2.2 of the National Digital Communications Policy -
2018 which mentions the policy goal for "Ensuring a holistic and
harmonized approach for harnessing Emerging Technologies". It has
been mentioned therein that a policy framework for ‘Over the Top’
services will be developed.
iii. The above-said recommendations dated 14.09.2020 are based on the
Consultation Paper of TRAI dated 12th November 2018 on ‘Regulatory
Framework for Over-The-Top (OTT) Communication Services’. The
consultation revolved mainly on the issue of imbalance between TSPs
and OTT players providing services that can be regarded as same or
similar to services offered by TSPs and issues relating to economic
aspects of such OTT services. On the other hand, the Consultation Paper
of 2015 titled ‘Regulatory Framework for Over-The-Top (OTT) Services
focused on possible regulatory and licensing framework for OTT services
along with related safety, security, and privacy concerns in addition to
Net Neutrality issues.
iv. Further, recommendations dated 14.09.2020 are at variance to TRAI’s
earlier recommendations on Privacy, Security and Ownership of the Data
in the Telecom Sector dated 16.07.2018 wherein it was concluded that
“since these entities are not governed by the license conditions,
application for Telecom Services Providers, the need for regulation of
these entities of the digital ecosystem to ensure protection of consumers
privacy and data security is urgent and inescapable.”
2. A kind reference is also invited to the recommendation no. 14 of the 26th
report of the Parliament’s Standing Committee on Communication and
Information Technology on the subject ‘Suspension of Telecom Services/
Internet and its impact’ (attached as Annexure-1), gist of which is as under-
The Committee strongly recommended that the Department urgently
examine the recommendation of TRAI and come out with a policy which
will enable the selective banning of OTT services with suitable

5
 technological intervention, such as Facebook, WhatsApp, Telegram
services during period of unrest/ crisis that are liable to be used by the
terrorists or anti-national element/ forces of ferment trouble in the
specified regions. The Committee look forward to positive development
in this regard.
With respect to the abovementioned recommendation of the
Parliament’s Standing Committee, DoT replied that it will explore the possibility
of regulation of OTT services and banning the services on selective basis in
consultation with TRAI, MEITY and MHA.
3. In view of above it is requested that TRAI may reconsider its
recommendations on ‘Regulatory Framework for Over-The-Top (OTT)
Communication Services’ dated 14.09.2020 and suggest a suitable regulatory
mechanism for OTTs, including issues relating to “selective banning of OTT
services” as part of its recommendations in accordance with the provisions of
section 11 of TRAI Act 1997, as mentioned in 2000.”

1.9 The Authority analyzed the afore-mentioned back reference and sent its
response dated 01.11.2022 to DoT. A relevant extract of the said response is
reproduced below:
“2. …, the following points are brought to your kind notice:
(a). In Para (i) it is mentioned that TRAI has not provided any detailed
justification for recommending "No regulatory interventions are required in
respect of issues related with privacy and security of OTT services". It may be
noted that detailed justification has been given with respect to each aspect
covered in the aforesaid recommendations. For example, on issues related with
privacy and security of OTT services, sub para (ii) para 2.4 Chapter 2 of the
recommendations of TRAI on 'Regulatory Framework for OTT communication
services' dated 14.09.2020 may please be referred.
(b). In para (ii), NDCP para 2.2 is referred to and mentioned that 'a policy
framework for 'Over the Top' services shall be developed’. Whereas para 2.2 of
NDCP states that "Promoting innovation in the creation of Communication
Services and network infrastructure by developing a policy framework for 'Over

6
 the Top' services”, which is wider in scope and not limited to the OTT services
as referred above in DoT letter.
(c). In para (iv), it is mentioned that recommendations of TRAI on OTT dated
14.09.2020, are at variance to TRAl's earlier recommendations on Privacy,
Security and Ownership of the Data in the Telecom Sector dated 16.07.2018.
Here it is clarified that aforesaid recommendations on OTT issued in 2020 are
not at variance to TRAI recommendations on Privacy, Security and Ownership
of the Data in the Telecom Sector dated 16.07.2018. The para referred i.e.,
"since these entities are not governed by the license conditions, applicable for
Telecom Service Providers, the need for regulation of these entities of the
digital ecosystem to ensure protection of consumers privacy and data security
is urgent and inescapable”, is para 2.35 Chapter 2 of the TRAI
recommendations, which is not part of the recommendations. Rather it is
mentioned in the internal discussions on analysis in the chapters. Further, the
above para does not mention OTT services explicitly.
3. Considering the vast growth of OTT Services using Telecom Resources
and new facts such as "Selective banning of OTT Services" referred in the
aforesaid communication of DoT, the Authority is of the view that a fresh
consultation process may be initiated to frame suitable regulatory framework
for OTT. Accordingly, the Authority has taken necessary initiatives to start the
consultation process to get a comprehensive input from various stakeholders
for framing required recommendations on OTT Services.”

C. The Present Consultation Paper

1.10 By way of issuing this consultation paper, the Authority is initiating a fresh
consultation process for soliciting comments from stakeholders on ‘Regulatory
Mechanism for Over-The-Top (OTT) Communication Services, and Selective
Banning of OTT Services’. For drafting this Consultation Paper, various
documents, studies and reports available in the public domain, and published
by government agencies/ departments, international bodies, telecom regulators
in other countries, research agencies/ institutions, academic institutions,

7
 operators, etc. were referred to. Excerpts from certain documents, which have
domain relevance, have been included in this Consultation Paper, and wherever
necessary, the web-links have been given as reference.

1.11 The Consultation Paper is divided into five chapters. This Chapter deals with
the introduction and background. Chapter II examines the issues related to
regulatory mechanism for Over-The-Top (OTT) communication services.
Chapter III examines the issues related to selective banning of OTT services.
The Chapter IV provides an overview of international practices on the subject.
Chapter V summarizes the issues for consultation.

8
 CHAPTER II
EXAMINATION OF THE ISSUES RELATED TO
REGULATORY MECHANISM FOR OTT COMMUNICATION SERVICES

A. Telecommunication services

2.1 As per the Telecommunications Regulation Handbook11 issued by the World

Bank and ITU, “governments in most countries continue to see
telecommunication as an essential public service. Even after telecommunication
networks are no longer run by them, governments normally retain a regulatory
role to ensure that telecommunication services are supplied in a manner
consistent with national perception of the public interest”.

2.2 The Annex on Telecommunications12 of ‘General Agreement on Trade of

Services’ (GATS), a treaty of World Trade Organization (WTO), defines the term
‘telecommunication’ as “the transmission and reception of signals by any
electromagnetic means”.

2.3 In India, the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act,
1933, and the Telecom Regulatory Authority of India Act, 1997, together
provide a regulatory framework for telecommunication services. The Section
1(k) of the Telecom Regulatory Authority of India Act, 1997 defines
telecommunication service as below:
“telecommunication service” means service of any description (including
electronic mail, voice mail, data services, audio tex services, video tex services,
radio paging and cellular mobile telephone services) which is made available to
users by means of any transmission or reception of signs, signals, writing,
images and sounds or intelligence of any nature, by wire, radio, visual or other
electro-magnetic means but shall not include broadcasting services.

11 Source: https://www.itu.int/ITU-D/treg/Documentation/Infodev_handbook/1_overview.pdf
12Source: https://www.wto.org/english/tratop_e/serv_e/12-tel_e.htm

9
2.4 As per the Section 4 of Indian Telegraph Act, 1885, “[w]ithin India, the Central
Government shall have the exclusive privilege of establishing, maintaining and
working telegraphs: Provided that the Central Government may grant a license,
on such conditions and in consideration of such payments as it thinks fit, to any
person to establish, maintain or work a telegraph within any part of India:…”

2.5 Section 3 of the Indian Telegraph Act, 1885 defines the terms ‘telegraph’ and
‘message’ as below:
“telegraph” means any appliance, instrument, material or apparatus used or
capable of use for transmission or reception of signs, signals, writing, images
and sounds or intelligence of any nature by wire, visual or other electro-
magnetic emissions, Radio waves or Hertzian waves, galvanic, electric or
magnetic means;
“message” means any communication sent by telegraph, or given to a
telegraph officer to be sent by telegraph or to be delivered;

2.6 At present, the Government of India, through the Department of

Telecommunications (DoT), follows a regime of Unified License, under which,
it grants authorizations13 to eligible entities to provide telecommunication
services. A relevant extract of the Unified License Agreement is given below:
“WHEREAS by virtue of the provisions of Section 4 of the Indian Telegraph Act,
1885, the Licensor enjoys exclusive privilege to grant License for telecom
services and the Licensee has requested the Licensor for grant of Unified
License …. Whereupon and in pursuance to the said request, the Licensor has
agreed to grant Unified License …”.

13 There are nine service authorizations under Unified License viz. (a) Access Service, (b) Internet Service, (c)
National Long Distance (NLD) Service, (d) International Long Distance (ILD) Service, (e) Global Mobile Personal
Communication by Satellite (GMPCS) Service, (f) Public Mobile Radio Trunking Service (PMRTS), (g) Very Small
Aperture Terminal (VSAT) Closed User Group (CUG) Service, (h) Audio Conferencing/ Audiotex /Voicemail Service,
(i) Machine to Machine (M2M) Service.

10
2.7 The Unified License Agreement defines the term ‘service’ as “collection,
carriage, transmission and delivery of messages over Licensee’s network in
Service Area as per authorization under this License.”

2.8 Apart from granting authorizations under Unified License, the Government also
grants a few stand-alone licenses and authorizations for providing
telecommunication services e.g., Captive Mobile Radio Trunking Service
(CMRTS) license, Authorization to provide In Flight and Maritime Connectivity
(IFMC) service, etc.

B. Evolution of online services and OTTs

2.9 In the early part of the development of the telecommunication services sector,
the main product was voice. This is changing fast. With today’s Internet
Protocol (IP) networks, data is increasingly replacing voice as the main product.
The changes in network technology have supported the creation of an
ecosystem of online applications including over-the-top (OTT) services that
introduce completely new use cases including the Internet of Things (IoT),
connected cars, smart education, smart health, smart agriculture, etc.

2.10 In some use cases such as messaging, consumer preferences have switched
from traditional telecommunication services to OTTs. With OTTs used
increasingly for messaging and to some extent for voice communication,
globally, the general trend is a transition from voice and SMS towards data as
a primary source of revenue for telecom service providers. In India,
composition of the revenue basket of wireless access service providers has
undergone a sea-change in the period from the year 2013 to 2022. The
following table presents a comparison of the composition of average revenue
per user (ARPU) per month from wireless service in the Quarter Ending (QE)
December 2022 vis-à-vis the ARPU per month from GSM14 service in QE June
2013.

14GSM is an acronym for Global System for Mobile Communication. In terms of subscriber base, GSM service
constituted more than 90% of wireless service segment in the QE June 2013.

11
 Quarter Ending Quarter Ending
June 2013 December 2022
Revenue
Percent Revenue Percent
(excluding
S. share of (excluding share of
Item service
No. total GST) per total
tax) per
revenue subscriber revenue
subscriber
from per month from
per month
subscribers (in Rs.) subscribers
(in Rs.)

1.1 Rental revenue 19.54 15.79% 0.81 0.50%

Revenue from
1.2 72.53 58.60% 14.79 10.10%
calls

Revenue from
1.3 3.99 3.22% 0.23 0.20%
Usage SMS
from
Home
Service Revenue from
1.4 10.02 8.10% 125.05 85.10%
Area data usage

Revenue from
1.5 7.33 5.92% 1.44 1.00%
other VAS15

1.6 Other revenue 2.08 1.67% 3.33 2.30%

Usage
outside
Revenue from
2 Home 8.28 6.69% 1.31 0.90%
out- roamers
Service
Area

Total revenue from

3 123.77 100% 146.96 100%
subscribers

Net inter-operator
4 settlement charges -12.32 -5.82
receivable

Net Revenue (ARPU)

5 111.45 141.14
per month

Table 2.1: Composition of ARPU per Month - Wireless Service16

15
VAS is an acronym for Value Added Service.
16 The figures for the Quarter Ending June 2013 correspond to GSM service, while the figures for Quarter Ending
December 2022 correspond to entire wireless service segment. Source: TRAI’s reports titled ‘The Indian Telecom
Services Performance Indicators’ for April-June 2013 and October-December 2022, accessible at
https://trai.gov.in/release-publication/reports/performance-indicators-reports

12
2.11 As may be seen from the above table, the contribution of data usage in the
revenue from mobile subscribers has grown to more than 10 times from 8.10%
in the quarter ending (QE) June 2013 to 85.1% in the QE December 2022.

2.12 While on one hand, with the passage of time, Internet data usage has become
the most prominent revenue driver in telecommunication services sector in
India, the number of Internet data users have also grown manifold in the
country. The Internet subscriber base in India grew to more than 4 times from
198.39 million in QE June 2013 to 865.90 million17 in QE December 202218. The
following figure depicts the growth in the number of Internet subscribers in the
country from 2005 to 2022.

1000
Number of Internet Subscribers in India (in million)

900

800
No. of Innternet Subscribers (in million)

700

600

500

400

300

200

100

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
As on Year ending

Figure 2.1: Statistics on Internet Subscribers in India

17
The wireless Internet subscriber base and wireline Internet subscriber base stood at 833.49 million and 32.41
million respectively as on 31.12.2022.
18
Source: TRAI’s reports titled ‘The Indian Telecom Services Performance Indicators’ for April-June 2013 and
October-December 2022, accessible at https://trai.gov.in/release-publication/reports/performance-indicators-
reports

13
2.13 Similar growth trends in Internet subscriber base have been observed globally.
According to ITU data19, worldwide an estimated 5.3 billion people used the
Internet in 2022. The global Internet penetration rate increased from 16% in
2005 to 66% in 2022. The following figure depicts the global statistics on
Internet users from 2005 to 2022.

Figure 2.2: Global statistics on Internet users20

2.14 With a view to capture the services that make up the internet ecosystem, the
Global System for Mobile communications Association (GSMA) has adapted a
framework named ‘The Internet Value Chain’. The said report identified five
main segments of internet value chain as below:
(a) Content Rights,
(b) Online Services,
(c) Enabling Technology & Services,

19 Source: https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx
20 ibid

14
 (d) Internet Access Connectivity, and
(e) User Interface.

2.15 The following figure depicts the internet value chain, propounded by the GSMA
in its report titled ‘The Internet Value Chain 2022’:

Figure 2.3: Internet Value Chain (GSMA, 2022)21

21 Source: https://www.gsma.com/publicpolicy/resources/internet-value-chain

15
2.16 Using the above framework, GSMA has quantified the overall size of the internet
value chain based on the 2020 revenues of each of the sub-segments. Based
on this approach, GSMA has estimated the total revenue of the internet value
chain in 2020 as USD 6.7 trillion globally. As per GSMA, ‘Online Services’
segment generated over half of this revenue. The following figure depicts the
contribution of each segment in the internet value chain in 2020.

Figure 2.4: Internet Value Chain Valuation22

2.17 As can be seen from the Internet Value Chain propounded by GSMA, ‘Online
Services’ constitute a variety of services. An early attempt to classify the online
services enabled by internet was made by Detecon International GmbH in its

22 Source: https://www.gsma.com/publicpolicy/resources/internet-value-chain

16
 study paper of 2013 on ‘The rise of OTT players-what is the appropriate
regulatory response?’23 authored by Shirley Baldry, Dr. Markus Steingröver, and
Markus A. Hessle. In the said paper, Detecon segmented online services based
on a broad set of use cases as below:

Figure 2.5: Classification of online services24

2.18 ITU-T in its technical report25 on ‘Economic Impact of OTTs’ (2017) took note
of the above classification of online services as below:
“A recent study by Baldry, Steingröver, and Hessler (2013) provides a
categorisation of online services. It seems clear that there is a great variety of
online services. It is instructive to note that only the first two columns of Figure
… (“OTT communications” and “OTT media”) represent OTT services in the
Baldry, Steingröver, and Hessler taxonomy – the rest are online services, but
not necessarily OTT services. “

2.19 As mentioned above, worldwide an estimated 5.3 billion people used the
Internet in 2022. Catering to this large and growing market of internet users

23 Source: https://www.afralti.org/wp-content/uploads/2017/04/Paper_OTT_Player.pdf
24 ibid
25 Source: https://www.itu.int/dms_pub/itu-d/oth/07/23/D07230000030001PDFE.pdf

17
 are OTT app developers, virtually unfettered by barriers to market entry.
Launching a new mobile app requires minimal staff, capital investment and
infrastructure. With the rise of cloud computing, mobile app companies no
longer need to build expensive and complex data centers; they can rent
computing power and start and grow their businesses. New entrants can easily
distribute their mobile apps to millions of people through app stores that
provide instant access to a global audience. Given these market conditions,
OTT apps have flourished.26

2.20 The OTT landscape is remarkably dynamic and competitive, as users

increasingly spread their time between more and more applications. The
decreasing cost of high-speed Internet connectivity27 and the increasing
processing power and storage space on personal devices allow people to move
easily between different apps, add new ones or use several at the same time.
There is considerable overlap between the user bases of competing
applications, and OTT technologies impose virtually no constraints on end users
from using many similar applications concurrently, a process known as
‘multihoming’. In Germany, for instance, a May 2020 report by the
Bundesnetzagentur (Federal Network Agency) found that 65% of survey
respondents practise multihoming for communication OTT applications.28

C. Benefits of OTT services

2.21 OTT services have transformed the economies of both developed and
developing countries; moreover, this effect has clearly trickled down to small
businesses and to individuals. Historically, these benefits have tended to be
concentrated in developed countries; however, as the process of digitalization

26 Source: Output Report on ITU-D Question 3/1 ‘Emerging technologies, including cloud computing, m-services
and OTTs: Challenges and opportunities, economic and policy impact for developing countries’ accessible at
https://www.itu.int/en/ITU-D/Study-Groups/2018-2021/Pages/Publications.aspx
27 In India, the average revenue realization per GB of wireless data usage in the year 2014 was Rs. 268.97 per GB.

(Source: https://trai.gov.in/sites/default/files/Wireless_Data_Service_Report_21082019.pdf). It declined to Rs.

10.10 per GB during the quarter ending December 2022. (Source: https://trai.gov.in/release-
publication/reports/performance-indicators-reports)
28 Source: https://www.itu.int/en/ITU-D/Study-Groups/2018-2021/Pages/Publications.aspx

18
 accelerates, and as more and more people worldwide are connected to the
Internet, these benefits accrue to developed and developing countries alike.
This tendency is closely linked to the growth in the availability and affordability
of mobile broadband (and smart phones), which has deepened network
coverage and opened it up to the masses.29

2.22 ITU-D in its report of 202130 mentions that the COVID-19 “pandemic has
highlighted that for most people the Internet is no longer just a convenience,
but a necessity. People with reliable Internet access have been able to use
OTTs to more easily access and share critical health information, maintain
contact with friends and family, work remotely, and otherwise mitigate the
adverse impact of social distancing, quarantines and similar measures.”

2.23 ITU-D in its report of 202131 further mentions that “by creating value for
consumers, OTTs stimulate demand for broadband networks and services that,
in turn, incentivize network operators to deploy and expand infrastructure as
consumers require increasing bandwidth. In other words, the availability of
OTTs creates a virtuous cycle that increases the value of broadband network
services and thereby drives further take-up and adoption of higher-value data
plans. … OTT companies and telecommunication service providers engender
benefits for each other in a symbiotic, complementary and mutually reinforcing
manner. Richer OTT applications drive demand and willingness to pay for
enhanced network access, whilst improved access coverage and quality enable
greater use of messaging and other applications. OTT applications drive the
demand for Internet connectivity services, thus increasing traffic and,
consequently, the revenue of telecommunication service providers.“

29
Source: https://www.itu.int/dms_pub/itu-t/opb/tut/T-TUT-ECOPO-2017-PDF-E.pdf
30 Source: https://www.itu.int/en/ITU-D/Study-Groups/2018-2021/Pages/Publications.aspx
31
ibid

19
2.24 In its report on OTTs (2023), Esya Center32 reinforces the above point. As per
this report, there is a virtuous cycle of OTT adoption and growth of telecom
service provider (TSP) networks as depicted in the following figure.

Figure 2.6: The virtuous cycle of OTT adoption and growth of TSP networks 33

2.25 ITU-D in its report of 202134 further mentions that “because OTT companies
and network operators have both enjoyed the benefits of consumer hunger for
broadband access, both sectors have invested heavily in the infrastructure to
support it. …
While most sub-scale OTTs rely on MNO infrastructure for last-mile delivery to
customers, hyperscale OTT service providers such as Facebook and Google are
increasingly investing in infrastructure and connectivity projects around the
world. …
Given the high data use of their customers, OTT providers have a growing
vested interest in supporting the availability of high-speed broadband for users
around the globe. As such, they are increasingly investing in network
infrastructure.”

32 The Esya Centre is a New Delhi based technology policy think tank. Source:
https://www.esyacentre.org/documents/2023/1/31/regulation-of-ott-communications-services-justified-concern-
or-exaggerated-fear
33
Source: https://www.esyacentre.org/documents/2023/1/31/regulation-of-ott-communications-services-justified-
concern-or-exaggerated-fear
34 34 Source: https://www.itu.int/en/ITU-D/Study-Groups/2018-2021/Pages/Publications.aspx

20
D. OTT Services

2.26 If policy or regulatory measures were to be enacted for OTT services, it would
presumably be necessary to establish a regulatory definition for OTT services.
Keeping this in mind, this section begins with the definition of OTT services.

(1) Definition of OTT Services

2.27 The term ‘OTT’ was coined more than a decade ago. Since its inception, there
have been numerous attempts worldwide to define the term. This section
presents the definitions of the term OTT, as declared by various jurisdictions
and forums, in a chronological order.

2.28 In July 2013, the Organisation for Economic Co-operation and Development
(OECD) Communications Outlook (2013) described OTT services as “video,
voice and other services provided over the Internet rather than solely over the
provider’s own managed network” 35.

2.29 In March 2015, The Office of Communications (Ofcom), United Kingdom in its
Mobile Call Termination Market Review 2015-18 defined OTT service36 as “a
type of service provided “over the top” of an existing data network connection
such as a fixed or wireless broadband connection.”

2.30 In January 2016, Body of European Regulators for Electronic Communications

(BEREC) in its ‘Report on OTT Services’37 defined OTT service as “content, a
service or an application that is provided to the end user over the public
Internet”.

35 Source: https://www.potraz.gov.zw/wp-content/uploads/2016/01/Consultation_OTT.pdf
36 Source: https://www.ofcom.org.uk/__data/assets/pdf_file/0025/74257/annex_15_glossary.pdf
37 Source: https://www.berec.europa.eu/en/document-categories/berec/reports/berec-report-on-ott-services

21
2.31 In May 2019, ITU-T in its Recommendation D.262 (05/2019) defined OTT as
“an application accessed and delivered over the public Internet that may be a
direct technical/ functional substitute for traditional international
telecommunication services”. The Recommendation noted, however, that
“[t]he definition of OTT is a matter of national sovereignty and may vary among
Member States”.

2.32 In the year 2020, Commonwealth Telecommunication Organization (CTO) in its

report on ‘Over The Top (OTT) Applications & Internet Value Chain’38 defined
OTT as below:
“OTTs can be content, a service or an application that is provided to the end
user over the public Internet.”

(2) Classification of OTT Services

2.33 Many jurisdictions have attempted to group OTT services in various classes.
This section presents the classification of OTT services, as provided by various
jurisdictions and forums, in chronological order.

2.34 The DoT Committee Report on Net Neutrality (May 2015)39 classified OTT
services into two groups as below:
“(i) OTT communications services – These services (e.g. VoIP) provide real-
time person to person telecommunication services. These services are
similar to the telecommunication services provided by the licensed
telecom service providers (TSPs) but are provided to the users as
applications carried over the internet using the network infrastructure of
TSPs. Essentially OTT communications services compete with the services
provided by TSPs riding on the infrastructure created by TSPs.
(ii) OTT application services – All other OTT services such as media services
(broadcasting, gaming), trade and commerce services (e-commerce, radio

38
Source: https://cto.int/wp-content/uploads/2020/05/CTO-OTT-REPORT-2020.pdf
39 Source: https://dot.gov.in/sites/default/files/Net_Neutrality_Committee_report%20%281%29_0.pdf

22
 taxi, financial services), cloud services (data hosting & data management
platforms/applications), social media (Internet based intermediary
applications like Facebook, YouTube) offer services to end-users using the
network infrastructure created by TSPs but do not directly compete with
the service offerings for which the TSPs have obtained a licence under the
applicable law i.e. the Indian Telegraph Act, 1885.”40

2.35 BEREC in its Report on OTT Services (January 2016)41 considered the following
taxonomy for OTT services the most useful:
“(a) OTT-0: an OTT service that qualifies as an electronic communication
services (ECS)42;
(b) OTT-1: an OTT service that is not an ECS but potentially competes with
an ECS;
(c) OTT-2: other OTT services”

2.36 Commonwealth Telecommunication Organization (CTO) in its report on ‘Over

The Top (OTT) Applications & Internet Value Chain’ (2020) mentioned as
below:
“OTTs can be distinguished between those that are electronic communication
services (OTT-ECS), those that potentially compete with electronic
communication services (OTT-Com), those that potentially compete with
broadcasting services (OTT-Content) and those that neither compete with
electronic communication services nor broadcasting services (OTT-Other).”43

40 https://dot.gov.in/sites/default/files/Net_Neutrality_Committee_report%20%281%29_0.pdf
41 Source: https://www.berec.europa.eu/en/document-categories/berec/reports/berec-report-on-ott-services
42As defined in the European electronic communications code (Directive (EU) 2018/1972), electronic

communications services are normally provided for payment via electronic communications networks. This includes
– except for services providing, or exercising editorial control over, content transmitted using such networks and
services – the following types of services:
(i) internet access service – a publicly available electronic communications service that provides access to the
internet, and thereby connectivity to virtually all end points of the internet, irrespective of the network technology
and terminal equipment used;
(ii) interpersonal communications service;
(iii) services used wholly or mainly for sending signals, such as transmission services used for the provision of
machine-to-machine services and for broadcasting
Source: https://eur-lex.europa.eu/EN/legal-content/glossary/electronic-communications-services.html
43 https://cto.int/wp-content/uploads/2020/05/CTO-OTT-REPORT-2020.pdf

23
E. OTT Communication Services

2.37 As outlined in Chapter I of this Consultation Paper, the Authority, in the year
2018, issued ‘Consultation Paper on Regulatory Framework for Over-The-Top
(OTT) Communication Services’ dated 12.11.2018 and raised various issues for
comments and counter-comments from stakeholders. In the said consultation
paper, the Authority observed that “OTT services could theoretically be
considered in the broadest sense to mean all online services (for instance, e-
commerce platforms or applications offering aggregating services). However,
in the background of DoT’s reference letter dated March 3, 2016 and the issues
already covered in the consultations that have preceded this one, the Authority
has chosen in this consultation to focus only on the regulatory issues and
economic concerns pertaining to such OTT services as can be regarded the
same or like the services provided by the telecom service providers. Unless
otherwise implied or explicitly stated in the context, the term OTT services used
in this consultation paper is restricted within this scope.” The stakeholder
consultation process, initiated through the afore-mentioned consultation paper
dated 12.11.2018, culminated in the Authority’s recommendations on
‘Regulatory Framework for Over-The-Top (OTT) Communication Services’
dated 14.02.2020 to DoT. It is noteworthy that DoT, through its back reference
dated 07.09.2022, has requested TRAI to “reconsider its recommendations on
‘Regulatory Framework for Over-The-Top (OTT) Communication Services’
dated 14.02.2020 and suggest a suitable regulatory mechanism for OTTs,
including issues relating to “selective banning of OTT services” as part of its
recommendations”.

2.38 Keeping the above in view, the present consultation is focused on the following:
(a) Identification of a suitable regulatory mechanism for OTT communication
services, and
(b) Examination of the issues related to selective banning of OTT
communication services.

24
2.39 Taking into account - (a) the definition of OTT provided by ITU (May 2019),
and (b) the classification of OTT services provided in the DoT Committee Report
on Net Neutrality (May 2015), as mentioned in the para 2.31 and 2.34 above,
an OTT communication service may be characterized by the following twin
features:
(i) It is accessed and delivered through an application (App) over the public
Internet, using the network infrastructure of telecom service providers;
and
(ii) It is a direct technical/ functional substitute for traditional
telecommunication services provided by the telecom service providers.

2.40 Prior to examining the issues related to OTT communication services, it appears
necessary to ascertain the universe44 of OTT communication services, and to
identify the classes45 (or categories), if any, of OTT communication services.
Accordingly, the Authority solicits comments of stakeholders on the following
set of questions:

Issues for consultation:

Q1: What should be the definition of over-the-top (OTT) services?

Kindly provide a detailed response with justification.

Q2: What could be the reasonable classification of OTT services based

on an intelligible differentia? Please provide a list of the categories
of OTT services based on such classification. Kindly provide a
detailed response with justification.

44 In mathematics, and particularly in set theory, category theory, type theory, and the foundations of mathematics,
a universe is a collection that contains all the entities one wishes to consider in a given situation. Source:
https://en.wikipedia.org/wiki/Universe_(mathematics)#:~:text=In%20set%20theory%2C%20universes%20are,
or%20Morse%E2%80%93Kelley%20set%20theory
45 In set theory, a class is a collection of sets that can be unambiguously defined by a property that all its members

share. Source: ibid

25
 Q3: What should be the definition of OTT communication services?
Please provide a list of features which may comprehensively
characterize OTT communication services. Kindly provide a detailed
response with justification.

Q4: What could be the reasonable classification of OTT communication

services based on an intelligible differentia? Please provide a list of
the categories of OTT communication services based on such
classification. Kindly provide a detailed response with justification.

F. Juxtaposition of OTT Communication Services and Traditional

Telecommunication Services

2.41 TRAI in the Consultation Paper on Regulatory Framework for Over-the-top

(OTT) Services46 dated 27.03.2015 described OTT provider as “a service
provider offering ICT (Information Communication Technology) services, but
neither operates a network nor leases network capacity from a network
operator. Instead, OTT providers rely on the global internet …to reach the user,
hence going “over-the-top” of a telecom service provider’s (TSP’s) network”.

2.42 DoT Committee Report on Net Neutrality (May 2015) provided an outline of the
modus-operandi of OTT applications. It said that “OTT applications are enabled
by delayering of communications networks through Internet Protocols (IP) that
permit the applications layer to function independent of the media layers. IP
has facilitated the separation of “carriage” from “content”, which has allowed
content provided by OTT service providers to be carried over the top of
communication networks to directly serve end-users at the edges of the
network. In OTT transactions, the network operators link the OTT service

46 Source: https://trai.gov.in/sites/default/files/OTT-CP-27032015.pdf

26
 provider and end-users without being responsible for the content carried over
it.” 47

2.43 Traditionally, an entity desirous of offering telecommunication services such as

voice, video, and messaging to its customers in the country would first obtain
a suitable service license under Section 4 of the Indian Telegraph Act, 1885
from the Government; and then establish a telecommunication network to
provide voice, video, and messaging services to its customers. However, the
delayering of telecommunications networks through Internet Protocol48 has
facilitated the OTT communication service providers to directly offer voice,
video, and messaging services to end users over the top of telecommunication
networks through OTT applications.

2.44 Apart from voice, video, and messaging services, OTT applications also offer
many features that go well beyond traditional telecommunication services. For
example, Instant messaging services through OTT applications provide richer
services than traditional short messaging service (SMS). OTT messaging
includes ‘one to many’ broadcast messages, in addition to private or direct
messaging. The OTT messaging apps possess a wide range of capabilities such
as voice and video messages as in Whatsapp, Facetime, Skype, etc., messages
using geo-location information as in Ola, Uber, Zomato, Swiggy, etc., or photo
sharing, as in Instagram, Snapchat, etc. In short, rather than offering simple
substitutions for voice, video and SMS, OTT applications offer a range of
features over and above the traditional telecommunication services.

2.45 ITU-D in its report of 202149 states that “communications-based OTTs typically
differ in a number of ways from traditional telecommunication services. For
example, OTTs generally do not provide connection to a public network and

47 Source: https://dot.gov.in/sites/default/files/Net_Neutrality_Committee_report%20%281%29_0.pdf
48 Internet Protocol (IP) is a ‘network layer’ communications protocol for delivery of packets from the source host
to the destination host solely based on the IP addresses.
49
Source: https://www.itu.int/en/ITU-D/Study-Groups/2018-2021/Pages/Publications.aspx

27
 instead create a type of closed-user group within the application. Thus, OTTs
do not require scarce numbering resources, nor do they require interconnection
agreements with traditional operators.”

G. Need for developing a policy and regulatory framework for OTT

communication services

2.46 In the year 2018, the Government announced National Digital Communication
Policy (NDCP) 2018. The NDCP 2018 “seeks to unlock the transformative power
of communications networks - to achieve the goal of digital empowerment and
improved well being of the people of India; and towards this end, attempts to
outline a set of goals, initiatives, strategies and intended policy outcomes”.50

2.47 The NDCP 2018 has three missions namely (a) Connect India, (b) Propel India,
and (c) Secure India. Under the Propel India Mission, the NDCP 2018 states
that “the recent past has witnessed an unprecedented transformation in the
Digital Communications Infrastructure and Services sector with the emergence
of new technologies, services, business models and players. There is hence an
imperative need to review the existing licensing, regulatory and resource
allocation frameworks to incentivize investments and innovation to optimise
new technology deployments and harness their benefits”. Towards this, the
NDCP-2018 envisages to ensure “a holistic and harmonized approach for
harnessing Emerging Technologies" by promoting “innovation in the creation
of Communication services and network infrastructure by Developing a
policy framework for ‘Over The Top’ services” as a strategy to achieve
the goals of the Propel India Mission.

2.48 In this background, through the back reference letter dated 07.09.2022, DoT
has mentioned, inter-alia, as below:

50 Source: https://dot.gov.in/sites/default/files/EnglishPolicy-NDCP.pdf

28
 “ii. In view of the humongous growth of OTT services in the recent past and
these services having reached a matured stage, there is a need to holistically
look into the various aspects of these services including regulatory, economic,
security, privacy, and safety aspects. This is also in keeping with para 2.2 of
the National Digital Communications Policy -2018 which mentions the policy
goal for "Ensuring a holistic and harmonized approach for harnessing Emerging
Technologies". It has been mentioned therein that a policy framework for ‘Over
the Top’ services will be developed.”

2.49 Keeping the above in view, this section attempts to examine various aspects of
OTT communication services considering the studies undertaken by ITU, and
other developments on the subject around the world.

(1) ITU’s Technical Report on Economic Impact of OTTs (2017), and

the Indian context

2.50 In the year 2017, International Telecommunications Union (ITU) issued a

Technical Report on Economic Impact of OTTs51 (hereinafter, referred to as
“the ITU’s Technical Report”). Chapter 3 of the ITU’s Technical Report outlines
the opportunities and impacts associated with OTT services. Chapter 4 outlines
policy challenges with respect to OTT services.

2.51 The ITU’s Technical Report in Chapter 3 mentions that “concerns are
widespread that OTTs may be impacting the revenues and profits of traditional
network operators. This could in turn depress investments that are needed in
fibre-based infrastructure, and in new mobile access technologies such as LTE.
Different interpretations are possible as to the relevance and severity of this
threat”. The ITU’s Technical Report indicates that there “seems to be little
doubt that revenue is declining for a number of traditional services, especially
for SMS. The cause is not proven, but the observed trends are suggestive of

51 Source: https://www.itu.int/dms_pub/itu-t/opb/tut/T-TUT-ECOPO-2017-PDF-E.pdf

29
 substitution effects. Substitution effects are arguably also important for
international voice calls.”

2.52 In the Indian Context, in the period from the year 2013 to 2022, the number
of outgoing SMS per subscriber per month declined by about 55% from 27 (for
GSM service in the Quarter Ending June 2013) to 12.26 (for wireless service in
the Quarter Ending December 2022)52. In the same period, the revenue from
SMS per subscriber per month decreased by about 94% from Rs. 3.99 (for GSM
service in the Quarter Ending June 2013) to Rs. 0.23 (for wireless service in the
Quarter Ending December 2022)53.

2.53 Further, in the period from the year 2013 to 2022, the number of outgoing
international long distance (ILD) voice minutes of usage (MOU) per wireless
subscriber per month declined by 83% from 0.3 (for GSM service in the Quarter
Ending June 2013) to 0.05 (for wireless service in the Quarter Ending December
2022) in the country.

2.54 As per the Publication titled ‘The State of the Network’ (2022 Edition) 54 of
Telegeography, at the global level, “2015 marked a turning point in the
international voice market - the first time since the Great Depression that
international call traffic declined, even if only by one half percent. It’s been a
race downhill ever since, as the slump in voice traffic has turned into a rout.
Carriers’ traffic declined by 9% in 2017 and 4% in 2018 and a further 6% in
2019. The COVID-19 pandemic spurred a short term rally in international call
volumes in early 2020, but things pretty much returned to the new normal.
Traffic fell a further 7% in 2020, slightly faster than the two previous years. …
calculation suggests that cross-border OTT traffic overtook international carrier

52 Source: TRAI’s reports titled ‘The Indian Telecom Services Performance Indicators’ for April-June, 2013 and
October-December, 2022, accessible at https://trai.gov.in/release-publication/reports/performance-indicators-
reports
53
ibid
54 Source: https://www2.telegeography.com/hubfs/LP-Assets/Ebooks/state-of-the-network-2022.pdf

30
 traffic in 2016, and would near 1.4 trillion minutes in 2021, dwarfing the 375
billion minutes of carrier traffic projected by TeleGeography.”

2.55 The ITU’s Technical Report further mentions that “the loss in traditional voice
and SMS revenues needs to be understood in the context of compensating
increased revenues for (mobile) data services. … The data consumption of a
WhatsApp message does not generate sufficient network operator revenue to
offset what an SMS would have generated, but when one factors in the
increased number of messages, increased volume of content per message (and
for voice, longer duration for voice calls), and all of the other data hungry
applications, the effects of online and OTT services on revenues are complex
overall…”

2.56 In the eight years period from the year 2014 to 2022, the volume of monthly
wireless data usage in India grew by about 156 times from 92.4 million GB55
(December 2014) to 14.4 trillion GB (December 2022)56. In the same period,
the average revenue from data usage per wireless subscriber per month in the
country increased by about 5.6 times from Rs. 22.19 (for GSM service in the
Quarter Ending December 2014) to Rs. 125.05 (for wireless service in the
Quarter Ending December 2022)57. In this period, the wireless Internet
subscriber base in India grew by about 3.35 times from 248.53 million (as on
31.12.2014) to 833.49 million (as on 31.12.2022)58.

2.57 With respect to the growth in data usage far exceeding the growth in revenue
from data usage, the ITU’s Technical report states as below:
“A few years ago, claims were widespread that Internet traffic growth was
driving unbounded costs, that flat rate prices prevented network operators from
charging to recover their costs, and that regulatory intervention was therefore

55
GB is an acronym for Giga Byte.
56 The information furnished by telecom service providers to TRAI
57 Source: TRAI’s reports titled ‘The Indian Telecom Services Performance Indicators’ for October-December 2014

and October-December 2022, accessible at https://trai.gov.in/release-publication/reports/performance-indicators-

reports
58
ibid

31
 required to address the claimed market failure. Concerns along these lines are
visible both in developed and developing countries.
This is a persuasive narrative, but alternative interpretations are also possible.
These alternative views generally are based on claims that growth in traffic
does not necessarily equate to an equivalent growth in cost.
Factors in this alternative assessment include:
• Internet traffic growth is indeed healthy, but no longer seems to reflect
explosive growth. The percentage growth in both fixed and mobile traffic
volumes appears to decline year over year …. This trend is visible in multiple
forecasts, and has been visible (for fixed broadband) since the nineties.
• Relevant unit costs also decline year over year (an effect known as Moore’s
Law), and offset any increase in traffic volume, ….. It has been claimed
that this decline slightly exceeds the rate of increase in traffic for the fixed
network at present. If so, this would suggest that fixed network prices are
stable or declining because the corresponding costs are stable or declining.
• Prices for both fixed and mobile broadband services do not appear to be
“stuck” at any particular level, but rather appear to respond to normal
forces of supply and demand.
The decline in unit costs for key traffic-dependent items of equipment (for
instance, large routers and long haul DWDM equipment used by network
operators) appear to more than offset the increase in the amount of equipment
required to carry fixed network traffic. For the mobile network, the combined
effect of increased traffic-dependent equipment volumes and declining unit cost
appears to be in line with the increase in the monthly price paid by consumers
(ARPU). In neither case are there indications of market failure.”

2.58 In the Indian context, in the period from the year 2012 to 2022, the monthly
average revenue per user (ARPU) for wireless service grew by about 44% from

32
 Rs. 98 (For GSM service in Quarter Ending December 2012) to Rs. 141.14 (for
wireless service in Quarter Ending December 2022)59.

2.59 In India, with the passage of time, the mobile network technology has
advanced from 2G (GSM and CDMA), 3G (WCDMA etc.), 4G (LTE etc.) and now
5G. The GSMA in its paper titled ‘The Benefits of Technology Neutral Spectrum
Licences’ (June 2019)60 has provided an assessment of the improvement in
spectral efficiency and data speed with the evolution of mobile network
technology as below:
“For data, GSM has an average spectral efficiency of 0.16 bits per Hz. For HSPA
(3G) this is 0.8 bits per Hz i.e. a 5-fold improvement. In other words, if an
operator refarms one 2x5 MHz block of 900 MHz spectrum from GSM to 3G
(HSPA) this would improve throughputs by a factor of 5. Furthermore, if an
operator implements 2x2 MIMO in 3G, this increases the average spectral
efficiency by 1.3 times to 1.04 bits per Hz. Thus an operator using the same
amount of spectrum can deliver 6.5 times higher throughputs compared to
GSM. However, MIMO in 3G is relatively rare whereas it is now common in 4G
deployments. 4G (LTE) effective spectral efficiency depends on the 3GPP
technology release and the age of handsets in the network. If an operator
deploys, say, LTE release 10 in the 900 MHz band the spectral efficiency gains
are even bigger compared to 3G. Without MIMO the spectral efficiency for 4G
is 1.46 bits per Hertz (bits/ Hz) compared to 0.8 bits/Hz for 3G (HSPA). LTE
radios deployed today in sub-1 GHz spectrum are invariably 2x2 MIMO hence
the spectral efficiency for LTE in 900 MHz is 1.9 bits/Hz compared to just 0.16
bits/Hz for GSM. This means if an operator refarms 900 MHz from GSM to 4G,
data throughout increases by a factor of 11.9.”

59 Source: TRAI’s reports titled ‘The Indian Telecom Services Performance Indicators’ for October-December 2012
and October-December 2022, accessible at https://trai.gov.in/release-publication/reports/performance-indicators-
reports
60 Source: https://www.gsma.com/spectrum/wp-content/uploads/2019/06/Benefits-of-Technology-Neutral-
Spectrum-Licences.pdf

33
2.60 The use of higher MIMO61 in 4G and 5G technologies results in an even greater
increase in data throughput. GSMA, in the afore-mentioned paper, illustrates
the average spectral efficiencies in various mobile network technologies as
below:

Figure 2.7: Average spectral efficiencies in various mobile network

technologies62

2.61 The above figure suggests that for the same quantum of access spectrum, the
data throughput has grown manifold from 2G networks (which were prevalent
till the year 2012) to 5G networks (which are being deployed now). From this
description, it may be inferred that the cost of delivery of unit mobile data in
access networks has declined significantly with the evolution of mobile network
technology.

2.62 While substantial efficiencies have been obtained in access networks through
the evolution of mobile network technology, the backbone networks, which are
generally optical fiber based, have also witnessed a significant improvement in
the efficiency in delivering data with the passage of time. As a result, the prices
of international internet bandwidth (which is a factor input for both mobile and
fixed-line broadband services) have declined substantially. As per the

61 MIMO (multiple-input, multiple-output) technique is used to increase the data throughput by using multiple
transmitter antenna and multiple receiver antenna.
62
Source: https://www.gsma.com/spectrum/wp-content/uploads/2019/06/Benefits-of-Technology-Neutral-
Spectrum-Licences.pdf

34
 Publication titled ‘The State of the Network’ (2022 Edition)63 of Telegeography,
“across a range of markets, 10 GigE prices fell 18% compounded annually from
Q2 2018 to Q2 2021. A comparable sample of 100 GigE port 64 prices fell 30%
over the same period”.

2.63 Further, in respect of the overall impact of OTT services on societal welfare,
the ITU’s Technical Report states, inter-alia, as below:
“Societal welfare is the sum of producer welfare and consumer welfare.
Consumers presumably view OTT services as offering better price/ performance
than the services for which they substitute (otherwise, they would not be
purchased). The OTT service is either less expensive than an equivalent service,
or else offers better value overall.
Most analyses of the economic impact of OTT services tend to be incomplete
to the extent that
• they consider only costs to producers, ignoring benefits to consumers;
• they often ignore real benefits that flow to producers of the services;
• they may not be clear as to the assumptions that they are making;
• they may not be clear as to the comparison they are making, and in
particular as to the counterfactual scenario that they are assuming.
Exactly what is compared is being compared to what?
Online services tend to intensify competition, and thus to reduce the spread
between cost and price (i.e. the profit margin). They reduce market
inefficiencies caused by imperfectly informed consumers. The increase in
market efficiency has two distinct effects on societal welfare.
• First, the reduced retail prices transfer societal welfare from producers to
consumers. This transfer is, in a static economic analysis, neutral in
principle to societal welfare, even though it is harmful to producers. What
producers lose, consumers gain.

63Source: https://www2.telegeography.com/hubfs/LP-Assets/Ebooks/state-of-the-network-2022.pdf
64The prices of 10 GigE and 100 GigE port refers to the prices paid by telecom service providers for leasing the
Ethernet internet bandwidth of 10 Gbps and 100 Gbps respectively.

35
 • Second, the reduced retail prices lead to increased consumption due to
the price elasticity of demand. More of the product or service is consumed.
This effect (formally referred to as a reduction in deadweight loss)
represents a real and unambiguous gain in societal efficiency, benefitting
both suppliers and consumers.
For OTT services, the relevant benefits to producers can be assumed to flow
primarily from increased overall consumption of network services; and
secondarily (but relatedly) from an increased number of subscribers to the
network due to the enhanced desirability of the service. OTT services have
presumably eroded profit margins for telecommunications market segments
that previously had been highly profitable, namely SMS and international voice
calls; nonetheless, data revenues are growing substantially, presumably due
both to an increase in the number of subscribers and an increase in traffic
volume per subscriber, both of which benefit from online services usage in
general and OTT service usage in particular. Overall consumer willingness to
pay (WTP) presumably also benefits from the use of online services.
In some countries, the net effect is an increase in network operator revenues
rather than a decrease. Circumstances could however vary greatly from one
country to the next.”

2.64 In the Indian context, in the ten-year period from the year 2012 to 2022, the
quarterly Adjusted Gross Revenue (AGR) of access service segment grew by
about 86% from Rs. 274.55 billion (in Quarter Ending December 2012) to Rs.
510.23 billion (in Quarter Ending December 2022).

2.65 The ITU’s Technical Report in Chapter 4 reflects on the issues of competitive
neutrality (the level playing field) for OTT services. It states, inter-alia, as
below:
“There are few who would disagree with the general proposition that similar
services that are similarly situated, and that compete with one another, should
be subject to obligations that are similar (to the extent that doing so is
practical). Specifically, one could argue that it is important to maintain

36
 competitive neutrality between OTT services and the underlying networks with
which they compete. Doing so would serve to maintain competitive neutrality.
Philosophically, one can argue that the choice between traditional versus OTT
services should be made by the market, with as little interference as possible
by regulatory authorities.
This seemingly straightforward principle is difficult to apply in practice. Are the
new services really effective substitutes, are they imperfect substitutes, are
they economic complements, or are they something else? Is the original
rationale for the original regulatory obligation really relevant to the online
service that competes with it? How practical and proportionate is it to impose
the traditional obligation on a new service – does it impose unreasonably high
costs? …
The range of services to which any specific obligation should apply, must be
considered in light of the goals of the obligation and the proportionality of that
obligation being applied to any specific service or service type. This implies that
the social benefits of the obligation and its scope need to be proportionate to
the economic costs entailed for each regulated provider, and the static and
dynamic competition effects of partial or universal application of the obligations.
A preference for a level playing field can be part of the assessment of
proportionality, but it is only one of the many elements. …
The answers to these questions would appear to be crucial; however, the most
appropriate answers might well vary from one service to the next, and also
from one country to the next.”

2.66 In the Indian context, as already indicated, the telecom service providers
(TSPs) need a telecommunication service license under Section 4 of Indian
Telegraph Act, 1885 to offer telecommunication services to their consumers
through telecommunication networks. On the other hand, OTT communication
service providers offer voice call, and messaging and video call services similar
to the services provided by TSPs, without any such license.

37
2.67 The telecom service providers in India are regulated by several laws, including
the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933 and the
Telecom Regulatory Authority of India Act, 1997. The terms and conditions of
the Unified License Agreement entered by the telecom service providers with
the Central Government are binding upon them. However, presently none of
these obligations are applicable to OTT communication service providers. Some
of the obligations under the Unified License Agreement65, which the telecom
service providers are required to adhere to are listed below:
(i) Lawful Interception: The Licensee is required to ensure that the traffic
passing through its network can be monitored.
(ii) Privacy and security: The Licensees are required to ensure the protection
of privacy of communication and to ensure that unauthorized
interception of messages does not take place. The license agreement
also restricts the Licensee from employing bulk encryption equipment in
its network and mandates the ensuring of network security. The Licensee
is also required to provide the call data records of all the specified calls
handled by the system at specified periodicity, as and when required by
the security agencies in the format prescribed from time to time.
(iii) Emergency Services: The Licensee is mandated to provide, either
independently or through mutually agreed commercial arrangements
with other telecom service providers, all public utility services as well as
emergency services including toll free services like police, fire,
ambulance.
(iv) Roll-Out Obligations: The Licensees, which obtain radio frequency
spectrum from the Government, are required to roll out specific network
services within specified timelines.
(v) Calling Line Identification (CLI): As per the security conditions laid down
in the Unified License Agreement, CLI facility is to be provided by
Licensee, and should not be tampered.

65 Source: https://www.dotindia.co.in/unified-licnse.html

38
(vi) Call Detail Record (CDR): The Licensee is required to maintain all
commercial records/ Call Detail Record (CDR)/ Exchange Detail Record
(EDR)/ IP Detail Record (IPDR) about the communications exchanged
on the network, which must be archived for at least two years for
scrutiny by the Licensor for security reasons.
(vii) Customer verification: The Licensee is under an obligation to ensure
adequate verification of each customer in the format prescribed by the
Licensor, before enrolling him as a subscriber. The licensee is required
to check the bonafide of the customer, verifying details as per Customer
Acquisition Form (CAF).
(viii) Customer Grievance Redressal: The license conditions require the
Licensee to be responsive to the complaints lodged by its subscribers,
rectify the anomalies within the mean time to restore (MTTR) specified
and maintain the history sheets for each installation, statistics, and
analysis on the overall maintenance status. Further Licensee is also
mandated to notify in writing to its customers, all the policy and
arrangements with respect to repair, fault rectification, compensation, or
refunds.
(ix) Network interconnection: The Licensee is required to provide
interconnection to the networks of the eligible telecom service providers
and is under an obligation to abide by the regulations on interconnection
prescribed by TRAI.
(x) Merger conditions: The license conditions require that whenever
amalgamation or restructuring i.e., merger or demerger is sanctioned
and approved by the High Court or Tribunal, scheme of amalgamation
or restructuring shall be effective only after the written approval of the
licensor for transfer/merger of licenses.
(xi) Entry/ Exit obligations: In case a Licensee wants to surrender its license,
it may surrender the license or any service authorization under this
license, by giving notice of at least 60 Calendar days in advance to the
Licensor (DoT) and at least 30 Calendar days’ notice to each subscriber.

39
2.68 At present, telecom service providers are required to pay a onetime non-
refundable entry fee for each authorized service, prior to signing the license
agreement. Additionally, telecom service providers are also under an obligation
to pay an annual license fee which is a percentage of the Adjusted Gross
Revenue (AGR). Under the Unified License Agreement, the license fee currently
is 8% of the AGR. Further, in case the telecom service providers obtain radio
frequency spectrum, they have to pay spectrum related charges as per the
provisions specified in the relevant Notice Inviting Applications (NIA) document
for the auction of frequency spectrum or conditions of spectrum allotment/
Letter of Intent/ directions/ instructions of DoT.

2.69 In addition to the Unified License Agreement, the telecom service providers are
also required to adhere to the regulatory obligations under the provisions of
the Indian Telegraph Act, 1885, which are listed below:
(i) Interception: The Indian Telegraph Act,1885 puts a general obligation
on telecom service providers to prevent unauthorized interception of
messages and to maintain secrecy. The said Act also restricts any
’telegraph officer’, which includes any person employed by a license
holder, from altering, intercepting, or divulging the contents of any
message, except as required by law (Section 26). Designated public
officials have the right to intercept telephonic communications under
identified circumstances (Section 5) and as per rules framed under the
Indian Telegraph Act, 1885.
(ii) Universal Service Obligation66: The Universal Service Obligation (USO)
Fund was established with fundamental objective of providing access to
basic telegraph services to people in remote and rural areas at affordable
and reasonable prices. Subsequently, the scope of USO Fund was
widened to provide access to telegraph services (including mobile
services, broadband connectivity and ICT infrastructure creation) in rural
and remote areas. The Indian Telegraph (Amendment) Act, 2003 giving

66 Source: https://usof.gov.in/genesis

40
 statutory status to the Universal Service Obligation Fund (USOF), and
the rules for administration of the fund known as Indian Telegraph
(Amendment) Rules, 2004 were notified on 26.03.2004. As per the
Indian Telegraph Act 1885 (as amended in 2003 and 2006), the USO
Fund is to be utilised exclusively for meeting the Universal Service
Obligation. These services include provision of public telecom and
information services, provision of household telephones in rural and
remote areas, provision of additional rural community phones in areas
after achieving the target of one Village Public Telephone in every
revenue village etc. The Licensees are required to pay a USO Levy of 5%
of their Adjusted Gross Revenue (AGR), as part of their License Fee to
DoT.

2.70 Following are some of the key obligations applicable to telecom service
providers under the regulations67 framed by TRAI:
(i) Interconnection: Telecom service providers are mandated to pay
interconnection charges that are specified under the Telecommunication
Interconnection Usage Charges Regulations, issued by TRAI.
(ii) Billing & Metering (Code of Practice): Telecom service providers are
required to follow the Quality of Service (Code of Practice for Metering
and Billing Accuracy) Regulations, 2006, issued by TRAI.
(iii) Tariff protection: The Telecommunication Tariff Order, 1999 (as
amended) requires telecom service providers to abide by the obligations
pertaining to transparency, continuity, billing methods etc. in tariffs.
(iv) Quality of Services (QoS): Telecom service providers are required to
meet the QoS benchmarks notified by TRAI. In case of non-compliance,
telecom service providers are liable to pay financial disincentives.
(v) Grievance redressal: Under the Telecom Consumers Complaint Redressal
Regulations, 2012, issued by TRAI, each telecom service provider is
required to have a complaint resolution center which must resolve

67 Source:https://www.trai.gov.in/sites/default/files/CPOTT12112018.pdf

41
 complaints within the time frame specified by TRAI. Consumers can
contact this center on a toll-free number to register their complaints.
(vi) Unsolicited Customer Communication (UCC): The Telecom Commercial
Communication Customer Preference Regulations (TCCCPR), 2018
issued by TRAI mandates that every Access Provider shall ensure that
any commercial communication using its network only takes place using
registered headers assigned to the senders for the purpose of
commercial communication. It also mandates that every Access Provider
shall establish Customer Preference Registration Facility (CPRF) and shall
make necessary arrangements to facilitate its customers, on 24 hours X
7 days basis throughout the year.
(vii) Mobile number portability (MNP): The Telecommunication Mobile
Number Portability Regulations, 2009, issued by TRAI, give customers of
a telecom service provider the freedom to port to another telecom
service provider.

2.71 The Information Technology Act, 2000 (IT Act) 68 and the rules framed under
it place certain regulatory obligations on body corporates or intermediaries
which includes TSPs and providers of OTT services that can be regarded as
same/ similar to the services provided by TSPs. Some of the regulatory
obligations are given below:
(i) Lawful Interception obligations: Section 69 of the IT Act gives the power
to the Government to intercept, monitor or decrypt any computer
resource. This provision also lays down a penalty of imprisonment upto
seven years for an intermediary who does not assist the Government in
interception or monitoring. Further Section 69B of the IT Act also
empowers the Government to monitor and collect traffic data or
information through any computer resource for cyber security.
(ii) Takedown obligations: Section 69A of the IT Act empowers the
Government to issue directions to any intermediary for blocking for

68 Source: https://legislative.gov.in/actsofparliamentfromtheyear/information-technology-act-2000

42
 public access of any information in any computer resource. The provision
also prescribes a punishment of imprisonment upto seven years for any
intermediary who fails to comply with the direction issued under it.
(iii) Privacy and cybersecurity obligation: Information Technology
(Reasonable Security Practices and Procedures and Sensitive Personal
Data or Information), 2011 requires every service provider to outline a
detailed privacy policy that is applicable to all users, that articulates
nature of data collected, type of data that is collected and for what
purpose including retention and further use. Additionally, India has
consumer protection laws, financial regulations, competition law that
ensures different aspects of user interest are protected. Further, Section
72 A of the IT Act provides for punishment for disclosure of information
in breach of lawful contract.
(iv) Intermediary liability: Rule 3(7) of the Information Technology
(Intermediaries Guidelines), 2011 lays down a positive obligation on part
of intermediaries like Internet Platforms and Services to comply with all
lawful orders and render assistance to government agencies that are
lawfully authorized. Section 79 of the IT Act states that intermediaries
are exempted from liability for third party information or communication
links made available or hosted by them subject to certain conditions. This
includes the condition that the intermediary must observe due diligence
while discharging its functions. However, this exemption does not apply
if (i) the intermediary has conspired or abetted or aided or induced the
commission of an unlawful act; or (ii) upon receiving actual knowledge,
or on being notified by the appropriate agency that any information, data
or communication link controlled by the intermediary is being used to
commit the unlawful act, the intermediary fails to expeditiously remove
or disable access to that material.
(v) Encryption obligations: Section 69 of the IT Act requires entities to abide
by any order to decrypt a computer resource. Section 84A allows the
Government to prescribe suitable modes or methods of encryption for
promotion of e-commerce and e-governance in the country.

43
2.72 The following table provides a comparison of the obligations imposed on the
licensed telecom service providers vis-à-vis OTT communication providers:
S. Obligation Applicability on
No. Licensed OTT
Telecom Communication
service service providers
providers
1 the obligations under the Indian Telegraph Yes No
Act, 1885
2 the terms and conditions under the License Yes No
Agreement
3 the regulatory fees payable to DoT under Yes No
the License Agreement
4 spectrum related charges payable to DoT Yes No
for the right to use of spectrum
5 obligations under the regulations/ orders/ Yes No
directions issued by TRAI
6 obligations on body corporates or Yes Yes
intermediaries under The Information
Technology Act, 2000

(2) ITU’s recommendations on ‘Collaborative framework for OTTs’

(2019)

2.73 In May 2019, ITU-T issued its recommendations D.262 (05/2019)69 on

Collaborative framework for OTTs’. These recommendations provide a
collaborative framework in order to promote competition, consumer protection,
consumer benefits, dynamic innovation, sustainable investment and
infrastructure development, accessibility and affordability in relation to the

69 Source: https://www.itu.int/rec/dologin_pub.asp?lang=e&id=T-REC-D.262-201905-I!!PDF-E&type=items

44
global growth of the over the top (OTT) applications. An extract of the said
recommendations is given below:
“6 Creating an enabling environment to encourage competition, innovation and
investment in the digital economy
6.1 In view of the evolving telecommunication environment, Member States are
encouraged, in coordination with stakeholders, to promote competition, and
encourage innovation and investment in the international telecommunication
ecosystem.
6.2 To promote fair competition, innovation and investment in a highly dynamic
and fast-moving industry, Member States should assess the economic, policy
and consumer welfare impacts of OTT in all critical areas affected, including
their regulatory frameworks and existing economic incentives with respect to
the provisioning and use of OTTs.
6.3 Member States are encouraged to consider and develop enabling policies
and/or regulatory frameworks to foster fair competition between network
operators and providers of OTTs. Member States are also encouraged to
examine, if necessary, the reduction of the regulatory burden upon traditional
networks and telecommunication services.
6.4 An important element of competition policy and regulation is the
identification and definition of relevant markets, and in this context, Member
States should consider the fundamental differences between traditional
international telecommunication services and OTTs, including the cross-border
and global nature of OTTs, low barriers to entry for OTTs and integration of the
markets amongst other factors.
7 Relationship between OTT and network operators
7.1 In the new communication ecosystem, connectivity and services, while no
longer tethered together, all remain critically interdependent. Given that
network operators and OTT are part of the same ecosystem, Members States
should consider the important inter-dependencies between them, which may
include how consumer demand for OTT can lead to an increase in demand for
data from telecommunication service providers as well as a decrease in demand
for traditional international telecommunication services.

45
7.2 Member States should encourage mutual cooperation as far as practical
between OTTs and network operators, with a view to fostering innovative,
sustainable, viable business models and their positive roles in fostering socio-
economic benefits.
7.3 Member States should continue to stimulate entrepreneurship and
innovation in the development of telecommunication infrastructures, especially
the development of high capacity networks, considering the disruptive power
and the social and economic impact of increasing access to broadband
connections.
8 Fostering innovation and investment
8.1 Member States should continue to foster entrepreneurship and innovation
in OTT applications, including their creation, provision and use, which benefit
users, and encourage sustainable infrastructure investments.
8.2 In the spirit of service availability and affordability, Member States should
foster enabling legal and regulatory environments, and develop policies that
are fair, transparent, stable, predictable and non-discriminatory; and that
promote competition, foster technological and service innovation and
encourage private sector investment incentives, in order to ensure the
continuing growth and adoption of OTTs.
8.3 Member States and Sector Members should participate and contribute to
standardization efforts through global and regional standard development
organizations in order to ensure open, interoperable, portable, secure and
affordable services and applications for consumers, anywhere and anytime,
where practicable.
8.4 More generally, Member States are encouraged to consider not only the
opportunities and benefits that OTTs provide but also the challenges that arise
from their exponential growth. Member States should foster access to and
growth of these services through, inter alia, support for innovation, demand
stimulation, industry collaboration and public-private partnerships.
9 Consumer protection and international collaboration
9.1 Due to the ever-increasing volumes of data being exchanged globally over
the Internet as well as over international traditional telecommunication

46
 services, Member States and regulators should take appropriate measures to
encourage all market participants to maintain the security of international
telecommunication networks carrying such data and thus help protect
consumers.
9.2 Given the global nature of many OTT, collaboration across multiple Member
States and Sector Members should be strongly encouraged.”

(3) ITU’s Recommendation on voluntary commercial

arrangements between telecommunication network operators
and OTT providers (2020)

2.74 In August 2020, ITU-T issued its recommendations D.1101 (08/2020)70 on

‘Enabling environment for voluntary commercial arrangements between
telecommunication network operators and OTT providers’. The said
recommendation recognizes that “there has been significant expansion in the
social and economic impact of OTT on society, and its demand has been
increasing faster than ever. In the long run, cooperation between OTT
providers and network operators may encourage competitive markets and
sustainable development of the international telecommunication/ICT
ecosystem”. A relevant extract of the said recommendations is given below:
“6 An enabling environment for voluntary commercial arrangements between
telecommunication network operators and providers of OTT application
6.1 Given that network operators and OTTs are part of the international
telecommunication/ ICT ecosystem, Member States are encouraged to work
with relevant stakeholders to develop an enabling environment for the benefit
of all stakeholders.
6.2 Member States are encouraged to create an enabling regulatory
environment that supports and encourages the development of innovative
business models in line with the advancement of technology and innovations,
which are changing faster than ever.

70 Source: https://www.itu.int/rec/T-REC-D.1101-202008-I/en

47
6.3 Recognizing that OTT providers create new demand for communication
services, it is important for Member States to create frameworks that do not
inhibit market entry. At the same time, Member States should continue to
ensure that even if softer regulation is in place, a competitive landscape is
assured for the benefit of consumers and innovation.
6.4 In order to capitalize on the consumer demand for OTT applications,
Member States should enable telecommunication network operators the
flexibility to adopt innovative business models, such as the transition to data-
centric end-user tariff structures to reduce dependence on revenues from
traditional telecommunication services.
6.5 Regulators are encouraged to permit telecommunication network operators
to offer their own OTT applications without subjecting them to legacy
telecommunication regulations, as long as those applications as well as
underlying broadband Internet access services are offered in a way that does
not disadvantage or discriminate against competitive alternatives.
6.6 Recognizing that the private and public sectors play a key role in the
expansion of telecommunication/information and communication technologies
(ICTs), for example through investments in infrastructures and services,
Member States are encouraged to develop policy frameworks to enable
voluntary commercial arrangements among telecommunication network
operators and providers of OTT applications so as to allow each to invest in
Internet infrastructure, without subjecting the parties to traditional
telecommunication regulatory requirements.
6.7 In order to promote a competitive landscape for the benefit of consumers
and innovation, Member States are encouraged to examine the appropriate
level of regulations both to OTT providers and traditional telecommunication
providers, which may include refraining from extending legacy
telecommunication regulations to providers of OTTs and examining the
reduction of the regulatory burden upon traditional networks and
telecommunication services.
7 Specific measures

48
 7.1 Member States are encouraged to promote mutual cooperation as far as
practical between providers of OTTs and telecommunication network operators.
To maintain competition in the market in the context of these partnership,
member states are encouraged to consider conducting analysis on competition
impacts (including transparency, non-discriminatory conditions, innovations
and consumer benefits) of those arrangements.”

(4) CTO’s Recommendations on OTT Applications & the Internet

Value Chain (2020)

2.75 In the year 2020, Commonwealth Telecommunication Organization (CTO)

released its ‘Recommendations to Regulators, Policy Makers and Tax Authorities
on Over The Top (OTT) Applications & the Internet Value Chain’71. The
conclusion of these recommendations are given below:
“The ICT sector value chain has expanded and so has the requirement for
regulatory tools and oversight:
There are more participants in the ICT sector value chain now than 25 years
ago and content has been democratised. Evolving technologies have further
changed how the ICT sector generates value for end-users. The linkages
between segments of the wider ICT value chain mean that regulation cannot
be limited to only one segment of the value chain. As more players enter the
ICT value chain, boundaries between segments will blur and interventions in
one market will have knock-on effects in other markets in the value chain. Just
as segments of the value chain influence each other, so regulation in the
connectivity segment must consider regulations from other institutions and
jurisdictions.
Regulatory best-practice principles have not changed:
Rushing to regulate OTTs resulted in clear negative impacts on consumers, the
ICT sector and economic growth in several countries. Regulatory interventions

71 Source: https://cto.int/wp-content/uploads/2020/05/CTO-OTT-REPORT-2020.pdf

49
 concerning OTTs should not deviate from the primary purpose of regulation
and should follow best-practice principles (like Ofcom’s). Prior impact
assessments are needed. For example, a regulatory impact assessment (RIA)
is the most important tool to estimate the impact on markets and to ensure
regulatory principles of proportionate and minimal intervention are met.
Regulating OTTs also requires a clear and precise definition of OTT applications
and services. Regulators will have to collect evidence of the impact of OTTs in
a market. If there is evidence of market failure, regulators will have to assess
which regulatory tool is appropriate and proportionate.
New institutions and legislative frameworks will arise:
While competition issues arising from OTT use can be assessed with the current
regulatory market definitions and tools, other emerging online (tech)
regulations are required to address online consumer protection, data privacy
and cybersecurity.”

(5) ITU’s Recommendation on customer redress and consumer

protection mechanism for OTTs (2021)

2.76 In December 2021, ITU-T issued its recommendations D.1102 (12/2021) on

‘Customer redress and consumer protection mechanisms for OTTs’72. This
Recommendation proposes customer redress and consumer protection
mechanisms related to the provision and consumption of OTTs. This comes in
the wake of the increasing use of OTT applications for voice calling, instant
messaging and video calling. The protection mechanisms bring convenience
and service affordability for consumers. The relevant extract of the said
recommendation is given below:
“6 Transparency and accountability
6.1 Ensuring transparency and accountability For transparency and
accountability, Member States through the national regulatory authorities
(NRAs), should ensure that:

72 Source: https://www.itu.int/rec/dologin_pub.asp?lang=e&id=T-REC-D.1102-202112-I!!PDF-E&type=items

50
a) The language used for terms and conditions is simple and widely understood.
b) The text used for terms and conditions is visible for all to see and read.
c) Information on terms and conditions including changes thereof, is made
available to consumers in a timely, accurate, and transparent manner in order
to enable consumers to make informed and rational decisions.
7 Data protection and privacy
7.1 Access to and use of personal data
OTT subscribers should be able to make informed decisions about the extent
to which their data can be accessed by others and the usage that third parties
may make of it. As such, the Member States through NRAs should endeavour
to ensure that consumers whose personal data has been collected have a right
to:
a) Access their data and understand how it is used;
b) Amend inaccurate data about themselves;
c) Port their data;
d) Control/restrict the processing of their data;
e) Withdraw their consent on the use of their data;
f) Request for the deletion or de-identification of their data.
7.2 Limitations in exceptional circumstances
A consumer's rights to control, access, deletion/de-identification, and portability
may be limited in exceptional circumstances, and only to the extent necessary,
if exercising such rights would:
a) Compromise the privacy, security, or other rights of the personal information
of another consumer (for example, when exercising rights, it would give a
person access to someone else's information);
b) Interfere with law enforcement, judicial proceedings, investigations, existing
legal obligations, or efforts to guard against, detect, or investigate malicious,
unlawful or fraudulent activity, or enforce contracts;
c) Require disproportionate effort, taking into consideration available
technology;
d) Disclose the organization's proprietary technology or business insights; or
e) Violate laws or the rights and freedoms of other consumers.

51
7.3 Procedures for data collection and processing
OTT providers should maintain transparent procedures for data collection and
processing and establish the requisite infrastructure to ensure smooth handling
of consumer data. These can be achieved through:
a) Establishing systems for accurate and secure records for all data collected;
b) Establishing systems for handling personal data requests, data deletion
requests and data disclosure requests in a timely and efficient manner;
c) Obtaining consent through adaptable, technology-neutral, flexible
mechanisms, including opt-in and opt-out mechanisms, to facilitate consumer
flexibility in exercising their rights;
d) Establishing a comprehensive privacy and security programme appropriate
to the size and the nature of the information collected, and be able to
demonstrate compliance with the programme;
e) Establishing oversight of data transfers.
8 Customer support services
8.1 Access to customer support services
Consumers should have access to a variety of customer support services such
as live chat support, e-mail, phone, and self-service knowledge support
channels.
9 Competition issues
9.1 Data portability
OTT subscribers should be able to easily switch from one OTT provider to
another by easily porting their data from one service provider to another as and
when they desire, where technically feasible. As such, OTT providers are
encouraged to facilitate data portability and interoperability of their platforms
to foster competition and provide choice for consumers in the market. OTT
providers should be able to consider data protection and security requirements
in designing tools to enable portability and deciding with whom to interoperate,
with guidance from regulators.
10 Consumer empowerment mechanisms
10.1 Consumer education and awareness

52
 Member States are encouraged through the NRAs to develop and implement
consumer empowerment programmes related to the use of OTTs through
education and awareness campaigns and public advocacy amongst others.
Focus of the programmes may include:
a) Consumer rights and responsibilities in the use of OTTs;
b) Enhancing media literacy.
11 Enhancing responsible use of OTTs
11.1 OTT providers are encouraged to put in place measures that promote
responsible use of OTTs, which may include inserting features that allow users
to monitor how much time they spend on social media.
12 Regional and international cooperation
12.1 Member States are encouraged to foster cooperation at regional and
international levels for the purpose of sharing information and experiences on
OTT consumer protection issues.”

(6) BEREC preliminary assessment of the underlying assumptions

of payments from large CAPs to ISPs (2022)

2.77 In October 2022, BEREC issued a paper titled ‘BEREC preliminary assessment
of the underlying assumptions of payments from large CAPs to ISPs’73. This
paper presents a preliminary assessment, in relation to the discussion on the
mechanism for “direct compensation” also referred to as “fair share” proposed
by the members of European Telecommunications Network Operators'
Association (ETNO) during 2021/2022, which resembles the “sending party
network pays” (SPNP) charging regime. The paper states that “previously, at
the World Conference on International Telecommunications 2012 (WCIT 2012),
ETNO proposed to implement a “sending party network pays” charging
mechanism. At that time, BEREC assessed this proposal and concluded that
deviating from the current principles might be of significant harm to the internet

73Source: https://www.berec.europa.eu/system/files/2022-
10/BEREC%20BoR%20%2822%29%20137%20BEREC_preliminary-assessment-payments-CAPs-to-ISPs_0.pdf

53
 ecosystem, as ISPs could exploit their termination monopoly in a similar manner
to the traditional telephony termination monopoly”. The paper mentions that
“at this stage, the paper “only focuses on the underlying assumptions regarding
the need to regulate remunerations of large content and application providers
(CAPs) to internet service providers (ISPs)”.
2.78 The preliminary findings of BEREC regarding the direct compensation
mechanism are given below:
“BEREC has found no evidence that such mechanism is justified given the
current state of the market. BEREC believes that the ETNO members’ proposal
could present various risks for the internet ecosystem.
To wrap up, the BEREC preliminary findings regarding the “direct
compensation” mechanism are:
1. The internet has proven its ability to self-adapt to changing conditions, such
as increasing traffic volume and changing demand patterns.
2. There needs to be an adequate justification for any measure intervening in
the market.
3. The “sending party network pays” (SPNP) model would provide ISPs the
ability to exploit the termination monopoly and it is conceivable that that such
a significant change could be of significant harm to the internet ecosystem.
4. Therefore, SPNP would require regulatory oversight and could require
regulatory intervention.
5. Traffic is requested and thus “caused” by ISPs’ customers.
6. CAPs are also able to optimise the data efficiency of the content and
applications they provide.
7. Fixed access networks costs exhibit a very low traffic-sensitivity, while mobile
networks experience some degree of traffic-sensitivity.
8. IP-interconnection disagreements are typically about increasing the capacity
of the IP interconnection link.
9. The cost of network upgrades that are necessary to handle an increased IP
traffic volume are very low when compared to the total network costs.
10. CAPs and ISPs are mutually dependent on each other.

54
 11. The demand from ISPs customers for content drives demand for broadband
access.
12. Availability of broadband access drives demand for content.
13. There is no evidence of “free-riding”.
14. Costs for internet connectivity are typically covered and paid for by ISPs
customers.
15. A further and broader analysis could be carried out on other approaches
related to the debate.

2.79 In this background, the Authority solicits inputs of stakeholders on the following
set of questions:

Issues for consultation:

Q5. Please provide your views on the following aspects of OTT

communication services vis-à-vis licensed telecommunication
services in India:
(a) regulatory aspects;
(b) economic aspects;
(c) security aspects;
(d) privacy aspects;
(e) safety aspects;
(f) quality of service aspects;
(g) consumer grievance redressal aspects; and
(h) any other aspects (please specify).
Kindly provide a detailed response with justification.

Q6. Whether there is a need to bring OTT communication services under

any licensing/regulatory framework to promote a competitive
landscape for the benefit of consumers and service innovation?
Kindly provide a detailed response with justification.

55
Q7. In case it is decided to bring OTT communication services under a
licensing/ regulatory framework, what licensing/ regulatory
framework(s) would be appropriate for the various classes of OTT
communication services as envisaged in the question number 4
above? Specifically, what should be the provisions in the licensing/
regulatory framework(s) for OTT Communication services in respect
of the following aspects:
(a) lawful interception;
(b) privacy and security;
(c) emergency services;
(d) unsolicited commercial communication;
(e) customer verification;
(f) quality of service;
(g) consumer grievance redressal;
(h) eligibility conditions;
(i) financial conditions (such as application processing fee, entry
fee, license fee, bank guarantees etc.); and
(j) any other aspects (please specify).
Kindly provide a detailed response in respect of each class of OTT
communication services with justification.

Q8. Whether there is a need for a collaborative framework between OTT

communication service providers and the licensed
telecommunication service providers? If yes, what should be the
provisions of such a collaborative framework? Kindly provide a
detailed response with justification.

Q9. What could be the potential challenges arising out of the

collaborative framework between OTT communication service
providers and the licensed telecommunication service providers?
How will it impact the aspects of net neutrality, consumer access and

56
 consumer choice etc.? What measures can be taken to address such
challenges? Kindly provide a detailed response with justification.

2.80 The following chapter examines the issues related to selective banning of OTT
services.

57
 CHAPTER III
EXAMINATION OF THE ISSUES RELATED TO SELECTIVE BANNING OF
OTT SERVICES

A. Background

3.1 The section 5(2) of the Indian Telegraph Act, 188574 provides as below:
“(2) On the occurrence of any public emergency, or in the interest of the public
safety, the Central Government or a State Government or any officer specially
authorised in this behalf by the Central Government or a State Government
may, if satisfied that it is necessary or expedient so to do in the interests of the
sovereignty and integrity of India, the security of the State, friendly relations
with foreign States or public order or for preventing incitement to the
commission of an offence, for reasons to be recorded in writing, by order,
direct that any message or class of messages to or from any person
or class of persons, or relating to any particular subject, brought for
transmission by or transmitted or received by any telegraph, shall not
be transmitted, or shall be intercepted or detained, or shall be disclosed to
the Government making the order or an officer thereof mentioned in the order:
Provided that press messages intended to be published in India of
correspondents accredited to the Central Government or a State Government
shall not be intercepted or detained, unless their transmission has been
prohibited under this sub-section.” [Emphasis supplied]

3.2 The section 7(1) of the Indian Telegraph Act, 1885 provides as below:
“(1) The Central Government may, from time to time, by notification in the
Official Gazette, make rules consistent with this Act for the conduct of all or any
telegraphs established, maintained or worked by the Government or by persons
licensed under this Act.”

74
Source: https://dot.gov.in/sites/default/files/the_indian_telegraph_act_1985_pdf.pdf

58
3.3 In exercise of the powers conferred by section 7 of the Indian Telegraph Act,
1885, the Central Government notified the Temporary Suspension of Telecom
Services (Public Emergency or Public Safety) Rules, 2017 [G.S.R. 998(E)]75 to
regulate the temporary suspension of telecom services due to public emergency
or public safety. The relevant extract of these rules is given below:
“2. (1) Directions to suspend the telecom services shall not be issued except
by an order made by the Secretary to the Government of India in the Ministry
of Home Affairs in the case of Government of India or by the Secretary to the
State Government in-charge of the Home Department in the case of a State
Government (hereinafter referred to as the competent authority), and in
unavoidable circumstances, where obtaining of prior direction is not feasible,
such order may be issued by an officer, not below the rank of a Joint Secretary
to the Government of India, who has been duly authorised by the Union Home
Secretary or the State Home Secretary, as the case may be:
Provided that the order for suspension of telecom services, issued by the officer
authorised by the Union Home Secretary or the State Home Secretary, shall be
subject to the confirmation from the competent authority within 24 hours of
issuing such order:
Provided further that the order of suspension of telecom services shall cease to
exist in case of failure of receipt of confirmation from the competent authority
within the said period of 24 hours.
(2) Any order issued by the competent authority under sub-rule (1) shall
contain reasons for such direction and a copy of such order shall be forwarded
to the concerned Review Committee latest by next working day.
(3) The directions for suspension issued under sub-rule (1) shall be conveyed
to designated officers of the telegraph authority or to the designated officers
of the service providers, who have been granted licenses under section 4 of the
said Act, in writing or by secure electronic communication by an officer not
below the rank of Superintendent of Police or of the equivalent rank and mode

75
Source: https://dot.gov.in/circulars/temporary-suspension-telecom-services-public-emergency-or-public-
safety-rules-2017

59
 of secure electronic communication and its implementation shall be determined
by the telegraph authority.
(4) The telegraph authority and service providers shall designate officers in
every licensed service area or State or Union territory, as the case may be, as
the nodal officers to receive and handle such requisitions for suspension of
telecom services.
(5) The Central Government or the State Government, as the case may be,
shall constitute a Review Committee.
(i) The Review Committee to be constituted by the Central Government shall
consist of the following, namely:-
(a) Cabinet Secretary-Chairman;
(b) Secretary to the Government of India In-charge, Legal Affairs-
Member;
(c) Secretary to the Government, Department of Telecommunications -
Member.
(ii) The Review Committee to be constituted by the State Government shall
consist of the following, namely:-
(a) Chief Secretary -Chairman;
(b) Secretary Law or Legal Remembrancer In-Charge, Legal Affairs -
Member;
(c) Secretary to the State Government (other than the Home Secretary)
- Member.
(6) The Review Committee shall meet within five working days of issue of
directions for suspension of services due to public emergency or public safety
and record its findings whether the directions issued under sub-rule (1) are in
accordance with the provisions of sub-section (2) of section 5 of the said Act.”

3.4 The matter relating to the Temporary Suspension of Telecom Services (Public
Emergency or Public Safety) Rules, 2017 came up for adjudication before the
Hon’ble Supreme Court in the Writ Petition (Civil) No. 1031 of 2019 and Writ

60
 Petition (Civil) No. 1164 of 2019. Through the judgment dated 10.01.202076
passed in the afore-mentioned writ petitions, the Hon’ble Supreme Court
issued, inter-alia, the following directions:
“a. The Respondent State/competent authorities are directed to publish all
orders in force and any future orders under Section 144, Cr.P.C and for
suspension of telecom services, including internet, to enable the affected
persons to challenge it before the High Court or appropriate forum.
b. We declare that the freedom of speech and expression and the freedom to
practice any profession or carry on any trade, business or occupation over the
medium of internet enjoys constitutional protection under Article 19(1) and
Article 19(1)(g). The restriction upon such fundamental rights should be in
consonance with the mandate under 19(2) and (6) of the Constitution, inclusive
of the test of proportionality.
c. An order suspending internet services indefinitely is impermissible
under the Temporary Suspension of Telecom Services (Public Emergency or
Public Service) Rules, 2017. Suspension can be utilized for temporary duration
only.
d. Any order suspending internet issued under the Suspension Rules, must
adhere to the principle of proportionality and must not extend beyond
necessary duration.
e. Any order suspending internet under the Suspension Rules is subject to
judicial review based on the parameters set out herein.
f. The existing Suspension Rules neither provide for a periodic review nor a
time limitation for an order issued under the Suspension Rules. Till this gap is
filled, we direct that the Review Committee constituted under Rule 2(5) of the
Suspension Rules must conduct a periodic review within seven working days of
the previous review, in terms of the requirements under Rule 2(6).
g. We direct the respondent State/ competent authorities to review all orders
suspending internet services forthwith.

76 Source: https://main.sci.gov.in/supremecourt/2019/28817/28817_2019_2_1501_19350_Judgement_10-Jan-
2020.pdf

61
 h. Orders not in accordance with the law laid down above, must be revoked.
Further, in future, if there is a necessity to pass fresh orders, the law laid down
herein must be followed.
i. In any case, the State/ concerned authorities are directed to consider
forthwith allowing government websites, localized/limited ebanking facilities,
hospitals services and other essential services, in those regions, wherein the
internet services are not likely to be restored immediately.
…”

3.5 Subsequently, through an Office Memorandum dated 10.11.2020 to all Chief

Secretaries of States & Chief Secretaries/ Administrators of Union Territories,
the Central Government conveyed, inter-alia, as below:
“It may be ensured that orders for suspension of Telecom Services issued under
Temporary suspension of Telecom Services (Public Emergency or Public Safety)
Rules, 2017 are in compliance to the directions of the Hon’ble Supreme Court.”

3.6 Further, through an amendment dated 10.11.202077, the Central Government

amended the Temporary Suspension of Telecom Services (Public Emergency or
Public Safety) Rules, 2017 and inserted the following sub-rule:
“(2A) The suspension order issued by the competent authority under sub-rule
(1) shall not be in operation for more than fifteen days.”

3.7 Thereafter, in December 2021, the Parliament’s Standing Committee on

Communication and Information Technology submitted its 26th report titled
‘Suspension of telecom services/ Internet and its impact’. The recommendation
No. 14 of the said report is reproduced below:
“Selective Banning of Services
14. Keeping in view the fact that complete shutdown of telecom services/
internet affects the people in many ways, the Committee desired to know if it

77
Source: https://dot.gov.in/circulars/gazette-notification-temporary-suspension-telecom-services-
amendment-rules-2020

62
was technically possible to shut down only those services in areas likely to be
used by terrorist/ anti-social elements rather than shutting down the internet
as a whole. The Department has informed that services hosted on cloud are
difficult to ban selectively since they operate from multiple locations in multiple
countries and continuously shift from one service to the other. However,
websites operating through fixed URLs can be banned. The Department have
also informed the Committee that Facebook, WhatsApp, Telegram etc. are
basically categorized as over the top telecom services, OTT services in short.
These OTT services are riding over the existing telecom service provider's
network. The Committee note that recently, Department of Telecom have
received a recommendation from TRAI on the OTT services and one of the
major recommendations of the TRAI is that currently these OTT services are
not required to be regulated. DoT are examining the recommendation and will
take an appropriate decision on the recommendations. DoT would be in a
position to provide answers to the Committee once the decision is taken
whether they would be able to block the OTT services selectively or not.
The Committee feels that it will be of great relief if the Department can
explore the option of banning selective services, such as Facebook. WhatsApp,
Telegram etc. instead of banning the Internet as a whole. This will allow
financial services, health, education, and various other services to continue to
operate for business as usual thereby minimizing inconvenience and suffering
to the general public and also help in controlling spreading of misinformation
during unrest. Adoption of such less restrictive mechanisms will be a welcome
initiative. The Committee strongly recommend that the Department urgently
examine the recommendation of TRAI and come out with a policy which will
enable the selective banning of OTT services with suitable technological
intervention, such as Facebook, WhatsApp, Telegram services during periods
of unrest/ crisis that are liable to be used by the terrorists or anti national
element/ forces to ferment trouble in the specified regions. The Committee look
forward to positive development in this regard. Till such time every effort should
be made to ensure that uninterrupted services are provided through the State
broadband network which can be monitored easily for possible misuse.“

63
3.8 In this background, through the back-reference dated 07.09.2022, DoT has
requested TRAI to suggest a suitable regulatory framework for OTTs, including
issues relating to “selective banning of OTT services” as part of its
recommendations.

B. Examination of the Matter

3.9 Clause 2.1(i) of Chapter IX of Unified License (Internet Service) states, inter-
alia, as below:
“The subscriber shall have unrestricted access to all the content available on
Internet except for such content which is restricted by the Licensor/ designated
authority under Law.”

3.10 Under section 69A of the Information Technology Act 202078, the Government
has powers to issue directions for blocking for public access of any information
through any computer resource. The said provision is reproduced below:
“69A. Power to issue directions for blocking for public access of any information
through any computer resource.–
(1) Where the Central Government or any of its officers specially authorised by
it in this behalf is satisfied that it is necessary or expedient so to do, in the
interest of sovereignty and integrity of India, defence of India, security of the
State, friendly relations with foreign States or public order or for preventing
incitement to the commission of any cognizable offence relating to above, it
may subject to the provisions of sub-section (2), for reasons to be recorded in
writing, by order, direct any agency of the Government or intermediary to block
for access by the public or cause to be blocked for access by the public any
information generated, transmitted, received, stored or hosted in any computer
resource.

78
Source: https://www.indiacode.nic.in/handle/123456789/1999

64
 (2) The procedure and safeguards subject to which such blocking for access by
the public may be carried out, shall be such as may be prescribed.
(3) The intermediary who fails to comply with the direction issued under sub-
section (1) shall be punished with an imprisonment for a term which may
extend to seven years and also be liable to fine.”

3.11 The section 2(1)(w) of the Information Technology Act, 2000 defines the term
‘intermediary’ as below:
"intermediary", with respect to any particular electronic records, means any
person who on behalf of another person receives, stores or transmits that
record or provides any service with respect to that record and includes telecom
service providers, network service providers, internet service providers, web-
hosting service providers, search engines, online payment sites, online-auction
sites, online-market places and cyber cafes;

3.12 In exercise of the powers conferred under the relevant sections of the
Information Technology Act 2020, the Government has framed Information
Technology (Procedure and Safeguards for blocking for Access of Information
by Public) Rules, 200979. These rules provide, inter-alia, a detailed procedure
to be followed and safeguards for blocking access of information by the public.
The clause 5 of these rules is reproduced below:
“5. Direction by Designated Officer. – The Designated Officer may, on receipt
of any request from the Nodal Officer of an organization or a competent court,
by order direct any Agency of the Government of intermediary to block for
access by the public any information or part thereof generated, transmitted,
received, stored or hosted in any computer resource for any of the reasons
specified in sub-section (1) of Section 69A of the Act.”

79

Source:https://www.meity.gov.in/writereaddata/files/Information%20Technology%20%28%20Procedure%20a
nd%20safeguards%20for%20blocking%20for%20access%20of%20information%20by%20public%29%20Rules%
2C%202009.pdf

65
3.13 When directed by the authorized agencies, all intermediaries including the
Access Service Providers and Internet Service Providers (ISPs) must promptly
implement the blocking, as specified. Section 12 of Information Technology
(Procedure and Safeguards for blocking for Access of Information by Public)
Rules, 2009 stipulates action for non-compliance of directions by Intermediary
as below:
“12. Action for non-compliance of direction by Intermediary. – In case the
intermediary fails to comply with the direction issued to him under rule 9, the
Designated Officer shall, with the prior approval of the Secretary, Department
of Information Technology, initiate appropriate action as may be required to
comply with the provisions of sub-section (3) of section 69A of the Act.”

3.14 Shutdown of telecommunications or the internet can have significant

ramifications for a country’s economy. It also disrupts critical services such as
education and healthcare. Consequently, such shutdown affects the life and
livelihood of the citizens of the country. In a report published by the UN Human
Rights office on 24.01.202280, “[t]he costs to jobs, education, healthcare, and
political participation virtually always exceed any hoped-for benefit.” For these
reasons, selective banning of specific OTT applications and websites etc., which
are likely to be used by the terrorists or anti-national elements to ferment
trouble in the specified regions, appears to be preferable as compared to
complete internet shutdown.

3.15 In this context, the need for a regulatory framework for selective banning of
OTT services under the Temporary Suspension of Telecom Services (Public
Emergency or Public Safety) Rules, 2017 or any other law, in force is required
to be examined.

3.16 Prima facie, the websites that use dynamic IP addresses and are hosted on
cloud servers can pose a challenge to conventional methods of blocking. In

80 Source: https://news.un.org/en/story/2022/06/1121242

66
 such situations, alternative methods may be necessary to effectively control
internet filtering. Advanced techniques can be employed to identify and block
access to such websites. Further, there may be scenarios where the targeted
websites use Hypertext Transfer Protocol Secure (https) protocol. HTTPS
protocol provides encryption and security for websites, making it difficult for
service providers to block content on these sites. However, there are still ways
to block or filter content at a network level, such as using a firewall or content
filtering software. As far as area specific barring is concerned, it also needs to
be carried out at network level, for which effective methods are required to be
worked out.

3.17 In this background, the Authority solicits inputs of stakeholders on the following
set of questions:

Issues for consultation:

Q10. What are the technical challenges in selective banning of specific

OTT services and websites in specific regions of the country for a
specific period? Please elaborate your response and suggest
technical solutions to mitigate the challenges.

Q11. Whether there is a need to put in place a regulatory framework for

selective banning of OTT services under the Temporary Suspension
of Telecom Services (Public Emergency or Public Safety) Rules, 2017
or any other law, in force? Please provide a detailed response with
justification.

Q12. In case it is decided to put in place a regulatory framework for

selective banning of OTT services in the country, -
(a) Which class(es) of OTT services should be covered under
selective banning of OTT services? Please provide a detailed
response with justification and illustrations.

67
 (b) What should be the provisions and mechanism for such a
regulatory framework? Kindly provide a detailed response with
justification.

Q13. Whether there is a need to selectively ban specific websites apart

from OTT services to meet the purposes? If yes, which class(es) of
websites should be included for this purpose? Kindly provide a
detailed response with justification.

Q14. Are there any other relevant issues or suggestions related to

regulatory mechanism for OTT communication services, and
selective banning of OTT services? Please provide a detailed
explanation and justification for any such concerns or suggestions.

3.18 The following chapter provides an overview of international regulatory practices

in respect of OTT services.

68
 CHAPTER IV
INTERNATIONAL PRACTICES

4.1 The regulatory practices in respect of OTT services followed in some countries
are outlined below.

A. Australia

4.2 In 2018, the Australian Competition and Consumer Commission (ACCC)

conducted a study81 of the communication sector looking specifically at OTTs
and the need for future access regulations.

4.3 The report concluded that, ‘there is no basis for requiring equivalent regulatory
treatment of OTT and traditional voice services’. The ACCC reasoned that ‘the
extent of substitution from traditional voice services to OTT voice services is
limited by technical shortfalls (such as any-to-any connectivity) and
consequently we do not consider OTT services to be full substitutes for voice
services at this time.’

4.4 One of the findings of the report is that ‘the competitive relationship between
OTT services and the traditional communications services they replicate is likely
to be different for each type of service. To the extent that competition from
OTT services acts as a constraint on pricing, there may be a case for reducing
or removing existing economic regulation of traditional communications
services.

4.5 In Australia, complete or nationwide internet shutdowns have not been

reported. Certain websites or online platforms may be blocked or filtered to
prevent access to illegal or harmful content, such as websites involved in the
distribution of child pornography or extremist materials. The Australian
government has also implemented measures to combat online piracy and

81 Source: Communications Sector Market Study Final Report April 2018 (accc.gov.au)

69
 copyright infringement, resulting in the blocking of specific websites. ISPs in
Australia are required to comply with legal obligations and cooperate with law
enforcement agencies when necessary.

B. Austria

4.6 The regulatory framework for electronic communications in Austria is set out in
the Austrian Telecommunications Act 2021 (TKG), which transposed the
Directive (EU) 2018/1972 of the European Parliament and of the Council of 11
December 2018 establishing the European Electronic Communications Code
(EECC) into Austrian Law.

4.7 The EECC introduced a new, broad definition of electronic communication

services, which now includes:
(a) Number based interpersonal communication services (hereinafter NB-
ICS).
(b) Number-independent interpersonal communication services (hereinafter
NI-ICS) as defined in article 2 EECC.
The respective definitions in the Austrian TKG 202182 read as follows:
“Art 4 Definitions
[…]
7. ‘number-based interpersonal communications service’ means an
interpersonal communications service which connects with publicly assigned
numbering resources, namely, a number or numbers in national or international
numbering plans, or which enables communication with a number or numbers
in national or international numbering plans;
8. ‘number-independent interpersonal communications service’ means an
interpersonal communications service which does not connect with publicly
assigned numbering resources, namely, a number or numbers in national or

82
Source: https://www.rtr.at/rtr/service/rechtsvorschriften/gesetze/TKG_2021_en-gb.pdf

70
 international numbering plans, or which does not enable communication with
a number or numbers in national or international numbering plans;“

4.8 With this new definition of “communications service” in the TKG 2021, many of
the Internet-based services are in a direct competitive relationship with
conventional telephony and SMS. Number-independent interpersonal
communications services (NI-ICS) are now included in the scope of certain
sector-specific regulations. The TKG 2021 places them on an equal footing with
traditional communications services in some areas (keyword: "level playing
field"), such as Security and integrity, Service Quality, Interoperability,
Universal service fund, Objection procedures and procedural rules (Duty to
notify contractual conditions), Information requirements and Monitoring of
competition.

C. Bangladesh

4.9 The Bangladesh Telecommunication Regulatory Commission (BTRC) has been

empowered by the Government under the Bangladesh Telecommunication
Regulation Act, 2001 (Act) to issue directives. Over-the-top (OTT) services are
creating new dimensions in the entertainment industry and creating true
substitution of the incumbent voice-based telecom services. As a consequence,
this phenomenon is asking for the overhaul of the regulatory regime telecom
sector. Consideration of the economic impact of OTTs is based upon recognition
of the fundamental differences between traditional telecommunication
operators and OTTs, including inter-alia, control of broadband internet access,
level of regulatory exposure, barriers to entry, competitive environment, level
of substitutability between OTTs and traditional telecom services and
interconnection to public networks.

4.10 Internet Protocol Telephony Service Provider (IPTSP) operators’ OTT services
shall be operated and regulated under the following existing policy, regulations
and guideline:

71
 (i) International Long Distance Telecommunications Services (ILDTS) Policy
2010;
(ii) IPTSP licensing Guidelines;
(iii) Interconnection Regulations, 2004;
(iv) Quality of service Regulations, 2018.

4.11 OTT means an application accessed and delivered over the public internet that
may be a direct technical/ functional substitute for traditional calling (&
messaging) services. OTT user shall specifically refer to a user who is using a
mobile based application to make a call (and/or send message) either to
another OTT user or to a conventional subscriber (with a number) in PLMN/
PSTN/ IPTSP network.

4.12 OTT (mobile app) based calling service (offered by nationwide IPTSP) is allowed
into the PLMN and PSTN network, in accordance with Directives83 on Mobile
Applications Based (Over-the-Top, OTT) Calling Services of the IPTSP.

4.13 BTRC will decide the specific interconnection capacity for IPTSP operators
offering app-based calling service. Based on the considerations of different
factors, BTRC will approve the interconnection capacity for individual service
providers. The modality (technology) of the interconnection shall be decided by
BTRC. For either type of technology (circuit or IP based), the IPTSP operator
will provide an appropriate traffic monitoring system to the concerned division
of BTRC.

4.14 OTT providers are required to have commercial negotiation with the
infrastructure providers, for their services to be allowed through incumbent
network. These commercial negotiations consider how much of the network
resources of the incumbents is used for the particular OTT and the cost of the

83Source:

http://old.btrc.gov.bd/sites/default/files/Directives%20on%20Mobile%20Applications%20Based%20Calling%20S
ervices%20%28OTT%29%20of%20The%20IPTSP%20Operators.pdf

72
 network resources. It is also considered whether the service offered by the OTT
is a substitution to the core service offered by incumbent.

D. Brazil84

4.15 In the current framework, there are services that do not require a licence as
they are classified as a value-added service (serviço de valor adicionado, SVA).
These services “complement” and “assist” telecommunication activities, and are
considered neither telecommunication nor broadcasting services.

4.16 Over-the-top services (OTTs) are considered as Value-added services in Brazil.

OTT services are not covered under any license and are not regulated in the
country.

E. European Union85

4.17 The European Union (EU) has adopted the new European Electronic
Communications Code (EECC) on the 11th of December 201886. The EECC is
revising the framework to clearly regulate these new services. There are now
two new regimes: one for number-independent service providers (such as
instant messaging), the other for number-based service providers (such as
VoIP). On the one hand, if OTT services offer access to publicly assigned
numbering resources, they are subject to similar rules as the traditional
telecommunications operators. On the other hand, if they only offer “number-
independent interpersonal communications services”, they will be subject to a
new and lighter regime.

4.18 At first, this new set of obligations was supposed to be implemented in every
EU country before the 21.12.2020. However, by October 2021 only eight

84 Source: Communication policy and regulation | OECD Telecommunication and Broadcasting Review of Brazil
2020 | OECD iLibrary (oecd-ilibrary.org)
85 Source: https://ec.europa.eu/commission/presscorner/detail/en/IP_22_1975
86 Source: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018L1972

73
 countries (Finland, Hungary, Denmark, Greece, Bulgaria, France, Germany, and
Italy) 87 implemented the new framework in their national law.

4.19 The European Commission decided in April 2022 to refer Spain, Croatia, Latvia,
Lithuania, Ireland, Poland, Portugal, Romania, Slovenia and Sweden to the
Court of Justice of the European Union over their failure to fully transpose and
communicate to the Commission how national measures transpose the EU
Electronic Communications Code.

4.20 In July 2021, the European Union Agency for Cybersecurity (ENISA) published
its ‘Guideline on Security Measures Under the EECC’ (4th Edition)88, confirming
that the security provisions in the EECC for number-independent interpersonal
communication services (NI-ICS) are the same as for the number-based
services. The said guideline mentioned, inter-alia, as below:
“5.3 SUPERVISION REGIME FOR NI-ICS PROVIDERS
In general, the security provisions in the EECC for NI-ICS are the same as for
the number based services. Both are subject to (normal) ex-ante, supervision,
and are required to provide information, submit to security audits and be
subjected to investigation of non-compliance by the competent authorities.
However, because these providers of do not normally exercise actual control
over the transmission networks, there may be different risks for these
providers, and certain security measures may not be needed, if justified on the
basis of a risk assessment.”

F. France

4.21 France has implemented the EECC via an Ordinance published on the
26.05.2021 and two subsequent decrees issued in September and October
2021. As a result, it is now compulsory for VoIP and OTT operators to respect
the obligations set out in the EECC.

87 Source: https://www.gleisslutz.com/en/Telecommunications_Modernisation_Act.html
88 Source: https://www.enisa.europa.eu/publications/guideline-on-security-measures-under-the-eecc

74
4.22 A press release by the French Regulator (ARCEP) in July 2022 mentioned that
the transposition of the European Electronic Communications Code in May 2021
gave ARCEP newfound powers, including the regulation of new over-the-top
(OTT) providers, which provide calling and instant messaging services, and
updating the universal electronic communications service, to keep pace with
the population’s changing consumption habits89.

G. Germany90

4.23 In 2019, there was a proposal for a new regulatory framework to monitor
content on online platforms. A fully modernized Telecommunications Act
(Telekommunikationsgesetz, TKG) has come into force in Germany on 1 st
December 2021. OTT-I providers are regulated under telecommunications law
for the first time. OTT-I services facilitate individual and group communication
in the form of language, images, videos, or other data using the internet
protocol only over the open internet, without offering content.

4.24 In contrast, OTT-II services do not fall within the scope of Telecommunications
Act. OTT-II services include content elements, ranging from search engines
and on-demand platforms to information portals.

H. Indonesia91

4.25 To enhance legal certainty, especially with the rapidly developing digital
platforms, the Ministry of Communication, and Informatics of the Republic of
Indonesia (MOCI) has issued the Regulation regarding Private Electronic
System Provider (Regulation) on 16th November 2020, which was promulgated
and effective since 24th November 2020.

89 Source: https://en.arcep.fr/news/press-releases/view/n/annual-report-180722.html
90
Source: https://www.gleisslutz.com/en/Telecommunications_Modernisation_Act.html
91Source: https://www.hoganlovells.com/en/publications/indonesian-regulator-set-clearer-terms-for-internet-
platforms

75
4.26 This Regulation is aimed to complete a regulatory framework regarding the
management and supervision of electronic system providers by private entities
(private ESPs). This Regulation provides clarification on the terms and
requirements for registration, and most importantly removing data localization
requirements previously introduced in the draft regulation which sparked
controversies. The Regulation introduces an obligation.

4.27 The Regulation introduces an obligation (Article 3 (1) and (2) of the regulation)
for private TSPs to be registered with the MOCI through the Online Single
Submission (OSS) system. This obligation extends to all private TSPs that
operate internet portals, websites, and applications used for specific purposes.

I. Singapore

4.28 Infocomm Media Development Authority (IMDA) has taken a two-pronged

approach to telecom licensing:
(a) Facilities-based operators (FBO), which refers to the deployment and/or
operations of telecom networks.
(b) Service-based operators (SBO), which refers to utilizing telecom network
elements from an FBO to provide telecom services.
(i) Individual SBO license, where individual licensing is required
(Managed Data Network Service, MVNO, IX, IP Telephony, M2M etc).
(ii) Class SBO license, where only registration with IMDA is required
(Interconnected VOIP, International Calling Cards, Call-back services
etc).

4.29 Internet based Voice and Data Services (communications OTT service provider)
must obtain a Service-Based Operating (SBO) licence that prescribes only a
minimum quality of service standards.92 In contrast, TSPs require a Facilities-

92 Source: Telecommunications (Class Licences) Regulations - Singapore Statutes Online (agc.gov.sg)

76
 Based Operations licence93, which have far greater regulatory obligations to
fulfill than SBO licensees. They are required to pay higher licence fees and have
roll out obligations to fulfill as per the license. They are also required to
implement and support number portability; provide interconnection; pay for the
use of radio frequencies and comply with the IMDA’s Quality of Service
standards.

4.30 The government has implemented measures to regulate online content and
combat illegal activities, such as the spread of fake news, hate speech, or online
scams. These measures involve targeted actions against specific websites or
online platforms that violate local laws or regulations. In some cases, access to
certain websites or content may be restricted or blocked temporarily. Singapore
has strict regulations in place to maintain social harmony and national security,
which may involve monitoring or restricting certain online activities. However,
complete or nationwide internet shutdowns have not been reported in
Singapore.

J. Trinidad and Tobago

4.31 The topic of OTTs was first considered by the Telecommunications Authority of
Trinidad and Tobago (TATT) in its consultative document, “Towards the
Treatment of Over-the-Top (OTT) Services” in June 2015. In addition to
evaluating the impact of OTT voice over Internet Protocol (VoIP) services within
the industry, the document also aimed to engage the public on pertinent issues
relating to OTTs. At that time, the TATT Authority took the decision to subsume
previous discussions on OTT issues and net neutrality into one document
addressing both topics.

4.32 In July 2018, the TATT Authority began public stakeholder discussions on the
topics of net neutrality and OTT regulation through its consultative document
Discussion Paper on Net Neutrality and OTT Services in Trinidad and Tobago

93 Source: Facilities-Based Operations (FBO) Licence - Infocomm Media Development Authority (imda.gov.sg)

77
 (the Discussion Paper). The Authority sought feedback on the document from
stakeholders with respect to the proposed guiding principles and regulatory
approaches to net neutrality and the treatment of OTT services in Trinidad and
Tobago.

4.33 In October 2021, the Authority published the decisions on recommendations

(DORs) and the final version of the Discussion Paper. Based on feedback from
that consultation process, and considering the dynamism of the industry, TATT
indicated that future consultations on both topics would continue in separate
frameworks on net neutrality and OTTs.

4.34 TATT has signaled some interest in introducing regulations to explicitly govern
OTT services, particularly those which function equivalently or similarly to the
traditional services and use numbering resources to connect to the PSTN.

4.35 TATT published “Framework on Over-the-Top Services (OTTs) in Trinidad and

Tobago” 94 in August 2022 for a first round of consultation. In the proposed
framework, TATT defines Over the Top Services as “Content, service or
application, accessed by the public via the Internet, that may be a direct
substitute for, and/ or may compete with a public telecommunications and/or
broadcasting service.” and that the scope of the proposed Framework is limited
to OTT communications (voice and messaging) and OTT media services. This
Framework presents TATT’s recommendations on the treatment of OTT
services accessed in Trinidad and Tobago.

K. Turkey95

4.36 Within the scope of the Mobile Call Termination market, it was evaluated that
in Turkey, OTT messaging services, generally put some degree of competitive
strain on mostly SMS/MMS services. In this regard, the tariff control obligation

94 Source: https://tatt.org.tt/Portals/0/Documents/2022/Framework%20on%20OTTs-Ed.pdf?ver=2022-08-29-
105153-363
95 Source: Inputs to TRAI from BTK

78
 on SMS/MMS termination was lifted for mobile network operators. The licenced
operators in Turkey complain about the OTTs that these providers are not
regulated and should be regulated like licensed operators.

4.37 The amending law, passed and published on 13 October 2022 defines OTT
services and OTT service provider as below:
“Over the top service: electronic communication services between persons
within the scope of auditory, written, visual communication that are provided
through a publicly available software independent of operators or the internet
service provided to subscribers and users who have internet access.
Over the top service provider: Natural persons or legal entities providing
services that are covered by the definition of over the top services.”

4.38 The law gives a clear power to The Information and Communication
Technologies Authority (ICTA) (Turkish: Bilgi Teknolojileri ve İletişim Kurumu
(BTK)) to regulate and authorize OTT service providers considering the
characteristics of the OTTs. However, currently BTK is closely monitoring the
practices of the other countries, and possible regulation proposals will be
evaluated in the near future.

L. United States of America

4.39 Non-interconnected OTT communications apps are not regulated as

telecommunications services under US communications Act96.

4.40 The US distinguishes between ‘telecommunications services’ (e.g. voice

telephony) and ‘information services’ (e.g. text messaging).
Telecommunications services are regulated more heavily than information
services.

96Source: Communications Act of 1934: as amended by Telecom Act of 1996

https://transition.fcc.gov/Reports/1934new.pdf

79
4.41 The US Congress has found that the ‘Internet and other interactive computer
services have flourished, to the benefit of all Americans, with a minimum of
government regulation’.

4.42 Under US law, the policy of the US is ‘to preserve the vibrant and competitive
free market that presently exists for the Internet and other interactive computer
services, unfettered by Federal or State regulation.’

4.43 While the United States has not experienced a complete internet shutdown,
there have been instances where specific websites or online services have been
temporarily restricted or blocked. These actions are usually taken for reasons
related to national security or during periods of emergency.

M. Vanuatu97

4.44 OTT is currently stimulating the increasing level of competition in the market
and at the same time contributing to the social and economic development of
Vanuatu. OTT provider is defined as a provider which offers information and
communications Technology (ICT) services but does not operate a network or
lease capacity from a network operator in Vanuatu. Rather, rely on the internet
access with speed to be able to reach consumers, thus, going “over-the-top”
of the telecom service provider’s network.

4.45 Telecommunications Radiocommunications and Broadcasting Regulator (TRBR)

regulates policies related to Telecommunications and Broadcasting in Vanuatu.
TRBR is mandated to regulate and monitor the Telecommunications market in
an efficient and transparent manner, however, any decision made must be
evaluated based on the Regulatory Impact Assessment (RIA) importantly
focusing on the cost and benefit of its intervention into the market.

97 Source: https://www.trbr.vu/attachments/article/842/trbr_public_consultation_report_on_ott.pdf

80
4.46 The regulation of OTTs is relatively a new dimension for the Vanuatu regulatory
environment and the TRBR is currently at the data-gathering stage to assess
the impacts of these OTT services regulatory inventions to regulate OTT
services may lead to unexpected outcomes including to lower network
investments due to reduction in data revenue. More assessment is needed prior
to any regulation to estimate the impact on the markets and to ensure
regulatory principles of proportionate and minimal intervention are met.

N. Zimbabwe

4.47 In 2016, the Postal and Telecommunications Regulatory Authority of Zimbabwe

(PORTRAZ) published a consultation paper98 on OTT services with the following
objectives:
(i) Examine the impact of OTT VoIP services on stakeholders in the
telecommunications industry
(ii) Review and assess the current legislative provisions for the operating of
OTT services in Zimbabwe
(iii) Seek public feedback in order to come up with appropriate
recommendations on the regulatory treatment of OTT services in
Zimbabwe

4.48 The paper mentioned that the current regulatory framework did not provide for
the licensing of OTT players and was limited in its regulatory oversight of
services provided over the Internet. The fundamental difference between the
OTTs and the network operators remained the ownership of the network. If
OTT players were treated as providers of Application Services, they could be
categorized as Application Service Providers under the proposed Converged
Licensing Framework which was to be implemented soon. The proposed
framework had the following license categories:
(i) Network Facilities License (NFL)
(ii) Network Services License (NSL)

98 Source: https://www.potraz.gov.zw/wp-content/uploads/2016/01/Consultation_OTT.pdf

81
 (iii) Application Services license (ASL)
(iv) Unified License
(v) International Gateway(s) License

4.49 Under the proposed Converged Licensing Framework, the scope of the
Application Services License is given as follows: “The Application Services
License shall allow the provision of electronic communication services to end-
users such as Internet services, VoIP, messaging services, video conferencing,
payphone mobile money among others. Under the same license, a licensee can
offer as many application services as he/she can at no additional license fees.
The Application Service License shall be issued as an Individual License or Class
License”.

4.50 The proposed Application Services License had two classes as follows:
(i) Application Service License Category A: Caters for Application Service
Licensees who are also licensed to offer network services at national or
international level. The license duration is 10 years for category A which
will be issued as an Individual License with a scope to operate at
international and national levels.
(ii) Application Services Class license category B: This will be an electronic
communication license entitling the holder who neither owns any network
facilities nor operates any telecommunications network but leases capacity
to provide one or more application services. Examples are internet service
providers (ISPs), Mobile Virtual Network Operator (MVNO), Fixed Virtual
Network Operator (FVNO), Value Added Services providers. The duration
for this license will be 5 years.

4.51 The authorization of OTTs as Application Service Providers under the converged
licensing framework will enable a proper regulatory framework to consider
cases of revenue sharing. Such authorization should also incorporate concerns
such as emergency services and provision of lawful interception amongst
others. If local application providers will be licensed under the new Converged

82
 Licensing Framework, international application providers should also be
licensed.

4.52 The following chapter summarizes the issues for consultation.

83
 CHAPTER IV
ISSUES FOR CONSULTATION

Stakeholders are requested to provide responses to the following questions with

detailed justifications:

A. Issues Related to Regulatory Mechanism for OTT Communication

Services

Q1: What should be the definition of over-the-top (OTT) services? Kindly

provide a detailed response with justification.

Q2: What could be the reasonable classification of OTT services based on

an intelligible differentia? Please provide a list of the categories of
OTT services based on such classification. Kindly provide a detailed
response with justification.

Q3: What should be the definition of OTT communication services? Please

provide a list of features which may comprehensively characterize
OTT communication services. Kindly provide a detailed response with
justification.

Q4: What could be the reasonable classification of OTT communication

services based on an intelligible differentia? Please provide a list of the
categories of OTT communication services based on such
classification. Kindly provide a detailed response with justification.

Q5. Please provide your views on the following aspects of OTT

communication services vis-à-vis licensed telecommunication services
in India:
(a) regulatory aspects;
(b) economic aspects;

84
 (c) security aspects;
(d) privacy aspects;
(e) safety aspects;
(f) quality of service aspects;
(g) consumer grievance redressal aspects; and
(h) any other aspects (please specify).
Kindly provide a detailed response with justification.

Q6. Whether there is a need to bring OTT communication services under

any licensing/regulatory framework to promote a competitive
landscape for the benefit of consumers and service innovation? Kindly
provide a detailed response with justification.

Q7. In case it is decided to bring OTT communication services under a

licensing/ regulatory framework, what licensing/ regulatory
framework(s) would be appropriate for the various classes of OTT
communication services as envisaged in the question number 4 above?
Specifically, what should be the provisions in the licensing/ regulatory
framework(s) for OTT Communication services in respect of the
following aspects:
(a) lawful interception;
(b) privacy and security;
(c) emergency services;
(d) unsolicited commercial communication;
(e) customer verification;
(f) quality of service;
(g) consumer grievance redressal;
(h) eligibility conditions;
(i) financial conditions (such as application processing fee, entry
fee, license fee, bank guarantees etc.); and
(j) any other aspects (please specify).

85
 Kindly provide a detailed response in respect of each class of OTT
communication services with justification.

Q8. Whether there is a need for a collaborative framework between OTT

communication service providers and the licensed telecommunication
service providers? If yes, what should be the provisions of such a
collaborative framework? Kindly provide a detailed response with
justification.

Q9. What could be the potential challenges arising out of the collaborative
framework between OTT communication service providers and the
licensed telecommunication service providers? How will it impact the
aspects of net neutrality, consumer access and consumer choice etc.?
What measures can be taken to address such challenges? Kindly
provide a detailed response with justification.

B. Issues Related to Selective Banning of OTT Services

Q10. What are the technical challenges in selective banning of specific OTT
services and websites in specific regions of the country for a specific
period? Please elaborate your response and suggest technical
solutions to mitigate the challenges.

Q11. Whether there is a need to put in place a regulatory framework for

selective banning of OTT services under the Temporary Suspension of
Telecom Services (Public Emergency or Public Safety) Rules, 2017 or
any other law, in force? Please provide a detailed response with
justification.

86
Q12. In case it is decided to put in place a regulatory framework for selective
banning of OTT services in the country, -
(a) Which class(es) of OTT services should be covered under selective
banning of OTT services? Please provide a detailed response with
justification and illustrations.
(b) What should be the provisions and mechanism for such a
regulatory framework? Kindly provide a detailed response with
justification.

Q13. Whether there is a need to selectively ban specific websites apart from
OTT services to meet the purposes? If yes, which class(es) of websites
should be included for this purpose? Kindly provide a detailed response
with justification.

Q14. Are there any other relevant issues or suggestions related to regulatory
mechanism for OTT communication services, and selective banning of
OTT services? Please provide a detailed explanation and justification
for any such concerns or suggestions.

87
 ANNEXURE 1

DoT’S BACK REFERENCE DATED 07.07.2022

88
89
90
91
 LIST OF ACRONYMS

S. No. Acronym Description

1 3GPP Third Generation Partnership Project

2 ACCC Australian Competition and Consumer Commission

3 AGR Adjusted Gross Revenue

Electronic Communications, Postal and Print media

4 ARCEP
distribution Regulatory Authority

5 ARPU Average Revenue Per User

6 ASL Application Services license

Body of European Regulators for Electronic

7 BEREC
Communications

8 BTRC Bangladesh Telecommunication Regulatory Commission

9 CAF Customer Acquisition Form

10 CAGR Compound Annual Growth Rate

11 CAPs Content and Application Providers

12 CDMA Code-Division Multiple Access

13 CDR Call Detail Record

14 CLI Calling Line Identification

15 CMRTS Captive Mobile Radio Trunking Service

16 CPRF Customer Preference Registration Facility

17 CTO Commonwealth Telecommunication Organization

92
S. No. Acronym Description

18 CUG Closed User Group

19 DWDM Dense Wavelength Division Multiplexing

20 DoT Department of Telecommunications

21 ECS Electronic Communication Services

22 EDR Exchange Detail Record

23 EECC European Electronic Communications Code

24 ENISA European Union Agency for Cybersecurity

25 ESPs Electronic System Providers

26 ETNO European Telecommunications Network Operator

27 EU European Union

28 FBO Facilities-Based Operators

29 FVNO Fixed Virtual Network Operator

30 GATS General Agreement on Trade of Services

31 GMPCS Global Mobile Personal Communication by Satellite

32 GSM Global System for Mobile communication

33 GSMA Global System for Mobile communications Association

34 GST Goods and Services Tax

35 HSPA High Speed Packet Access

36 Https Hypertext Transfer Protocol Secure

93
S. No. Acronym Description

37 ICT Information and Communications Technology

38 ICTA Information and Communication Technologies Authority

39 IFMC In Flight and Maritime Connectivity

40 ILD International Long Distance

41 ILDTS International Long-Distance Telecommunications Services

42 IMDA Infocomm Media Development Authority, Singapore

43 IoT Internet of Things

44 IP Internet Protocol

45 IPDR IP Detail Record

46 IPTSP Internet Protocol Telephony Service Provider

47 ISP Internet service provider

48 IT Information Technology

49 ILD International Long Distance

50 ITU International Telecommunication Union

51 ITU-D ITU Telecommunication Development Sector

52 LTE Long Term Evolution

53 M2M Machine to Machine

54 MeitY Ministry of Electronics and Information Technology

55 MHA Ministry of Home Affairs

94
S. No. Acronym Description

56 MIMO Multiple Input Multiple Output

57 MMS Multimedia Messaging Services

58 MNO Mobile Network Operator

59 MNP Mobile Number Portability

Ministry of Communication, and Informatics of the Republic

60 MOCI
of Indonesia

61 MoU Minutes of Usage

62 MTTR Mean Time to Restore

63 MVNO Mobile Virtual Network Operator

64 NB-ICS Number-Based Interpersonal Communication Services

65 NDCP National Digital Communication Policy

66 NFL Network Facilities License

67 NIA Notice Inviting Applications

Number-Independent Interpersonal Communication

68 NI-ICS
Services

69 NLD National Long Distance

70 NRA National Regulatory Authorities

71 NSL Network Services License

72 OECD Organisation for Economic Co-operation and Development

73 Ofcom Office of Communications

74 OSS Online Single Submission

95
S. No. Acronym Description

75 OTT Over-The-Top

76 PLMN Public Land Mobile Network

77 PMRTS Public Mobile Radio Trunking Service

Postal and Telecommunications Regulatory Authority of

78 PORTRAZ
Zimbabwe

79 PSTN Public Switched Telephone Network

80 QE Quarter Ending

81 QoS Quality of Service

82 RIA Regulatory Impact Assessment

83 SBO Service-Based Operators

84 SMS Short Messaging Service

85 SPDI Sensitive Personal Data or Information

86 SPNP Sending Party Network Pays

87 TATT Telecommunications Authority of Trinidad and Tobago

Telecom Commercial Communication Customer Preference

88 TCCCPR
Regulations

89 TKG Austrian Telecommunications Act

90 TRAI Telecom Regulatory Authority of India

Telecommunications Radiocommunications and

91 TRBR
Broadcasting Regulator, Vanuatu

92 TSP Telecom Service Provider

93 UCC Unsolicited Customer Communication

96
S. No. Acronym Description

94 UL Unified License

95 URL Uniform Resource Locator

96 USD U.S. Dollar

97 USO Universal Service Obligation

98 USOF Universal Service Obligation Fund

99 VoIP Voice over Internet Protocol

100 VSAT Very Small Aperture Terminal

101 WCDMA Wideband Code Division Multiple Access

102 WCIT World Conference on International Telecommunications

103 WTO World Trade Organization

97