ALF Countercomments to TRAI Consultation on OTT Services

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8 May 2015

To

Shri A. Robert J. Ravi

The Telecom Regulatory Authority of India

Mahanagar Doorsanchar Bhawan

Jawahar Lal Nehru Marg, New Delhi 110002

Dear Sir,

Re: Counter Comment responses to Comments on the TRAI Consultation Paper

on Regulatory Framework for Over-the-top (OTT) Services (No. 2/2015)

We are grateful to the TRAI for making available the comments on its Consultation Paper

on regulatory framework for OTT services for public counter comments. On behalf of our

organisation, Alternative Law Forum, we have responded with some counter comments to

comments provided to the Consultation Paper herewith.

The Alternative Law Forum, established in 2000, is a collective of lawyers and researchers

who work on various issues of public interest. We have also been working and teaching in

the area of media and internet laws and regulation for many years, and our members in

the past have been part of expert groups constituted by the government, assisted in policy

oriented research and also made submissions on a number of issues of public importance.

We hope you will take our comments and counter comments into account for

recommendations on the subject.

For Alternative Law Forum

122/4, Infantry Road

Bangalore-560001

Smarika Kumar

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Preamble: General Principles

The issue of framing a governance framework for OTT players in the country is a

complicated one, which affects many facets of law and policy that are in various ways,

interrelated. Changes in one facet has implications for several other facets of governance,

including most importantly, the Constitution of India. Accordingly we have based our

Counter Comments on six general principles that must be adhered to when framing a

governance framework for OTTs or for TSPs in the contexts which the TRAI Consultation

Paper raises. These are as following:

Ensuring Conditions for Innovation in both OTT and TSP markets.

Ensuring High Competition in both OTT and TSP markets.

Ensuring Access to the Internet (by enhancing and guaranteeing Reach,

Quality of Services, and Affordability of Internet Connections) for

consumers and Reducing Digital Divide.

Ensuring Access to Diversity of Content on the Internet for all citizens.

Ensuring Freedom of Speech, or no illegitimate censorship on the Internet.

Ensuring Regulation of Gatekeeping Power of TSPs, or Net Neutrality. Our

definition of Net Neutrality differs from the one proposed in the TRAI

Consultation Paper1 and is as following: Net Neutrality means the state where

the gatekeepers to the internet (including ISPs, TSPs) are subject to a

governance framework in order to ensure they do not use their power to unfairly

discriminate between similarly situated persons, content, or traffic.2

Keeping these principles in mind, we have framed our Counter Comments. We have

additionally divided our Counter Comment responses under three broad themes which

various comments to the TRAI Consultation Paper addressed. These are as following:

I. On Governance/Regulatory Mechanism for OTTs and TSPs

II. On Net Neutrality

III. On Investments in Network Infrastructure

Our Counter Comments under these themes are expanded on in the following pages:

1 para 5.3, TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015, available at < http://www.trai.gov.in/WriteReaddata/ConsultationPaper/Document/OTT-CP-27032015.pdf> 2 We would thank discussions with Pranesh Prakash of Centre for Internet and Society, Bangalore which helped in framing this definition of net neutrality for the Indian context.

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I. On Governance/Regulatory Mechanism for OTTs and

TSPs

I.1. There is no basis for developing a licensing or registration regime for

OTT services.

Some of the comments on the TRAI Consultation Paper like that of AUSCPI3 offer that OTT

services should be brought under a registration or licensing regime. We strongly disagree

with this, to point out that there is no basis for developing a licensing or registration regime

for OTT services because of the following reasons:

I.1.a. OTTs cannot legitimately be said to fall under telegraph under Telegraph

Act, 1885.

The prerogative for licensing telecommunications services stems from Section 4 of the

Telegraph Act. Various communication networks have been read by courts to be included

under the meaning of telegraph. In Union of India v. S. Prakash, the Allahabad High

Court had held regarding the definition of telegraph under the Telegraph Act, The

definition of 'telegraph' as given in the Act will also mean any appliance, instrument, or

apparatus used for transmission or reception of signs, signals, writing images and sounds

or intelligence of any nature through wire etc. including electricity and in view of this

definition, which is of wide import, the word 'telegraph' means appliance, instrument or

apparatus used for transmission or reception of signs, signals, ' images etc. through

electric wires with the use of electricity or waves.4 The Rajasthan High Court in Shankar

Birmiwal v. Union of India5 has held regarding the definition of telegraph, Since a

telephone is an instrument used for transmission and reception of sound by wire, it is

"telegraph" as defined in Section 3(1) of the Act and a telephone connection is a "telegraph

line" as defined in Section 3(4) of the Act. The provision of a telephone connection is,

therefore, governed by the provisions of the Act and the rules framed thereunder.

The above interpretations of telegraph under the Act imply that it refers to a physical

appliance, instrument or apparatus, or a network which is capable of transmission of

signals for communication.6 OTTs on the other hand, form a part of the Application Layer

of the internet, and ride on top of physical network and infrastructure, rather than being

a part of it in both the TCP/IP and OSI models.7 There is an inherent difference in the

technology used by communications OTTs and TSPs for telephony and messagingthe

former uses packet switching, while the latter uses circuit switching. For this reason, they

cannot be classed as similar services.8 Therefore OTTs cannot be said to fall under the

ambit of telegraph in the Telegraph Act, and therefore cannot legitimately be subject to

a licensing regime.

3 Pg 1,3,4, AUSCPI comments on TRAI Consultation Paper on Regulatory Framework for OTT

Services, 27 March 2015. 4 Union of India v. S. Prakash, 1990 (2) AWC 957

5 Shankar Birmiwal v. Union of India, AIR 1982 Raj 187

6 See also Piyush Joshi, Law Relating to Infrastructure Projects, LexisNexis (2004), page 390 7 The OSI Models Seven Layers Defined and Functions Explained, available at , TCP/IP Protocol Fundamentals Explained With a Diagram, available at 8 See Section 1.4.a of the present submission where we expand on these differences, and why OTT and TSP cannot be classified as similar or same services.

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I.1.b. OTTs do not fulfil the rationale for the licensing regime under the Telegraph

Act, 1885.

The Supreme Court in Ministry of Information and Broadcasting v. Cricket Association of

Bengal9 has explained the rationale for the licensing regime for telecommunications

infrastructure. It has held, There is no doubt that since the airwaves/frequencies are a

public property and are also limited, they have to be used in the best interest of the society

and this can be done either by a central authority by establishing its own broadcasting

network or regulating the grant of licences to other agencies, including the private

agencies. This implies that to be licensed, a telecommunications resource must fulfil two

conditions: first, it must be a public property, and second it must be of scarce or limited

nature. Communications OTT players fulfil neither of these conditions as they are

transmitted as data packets which cannot be scarce, on top of TSP networks. This

additionally reinforces that there is no legal rationale to apply the licensing regime under

Telegraph Act to OTTs.

I.1.c. Licensing OTTs in this environment can adversely impact innovation and

ease of access of smaller players to the OTT market.

Licensing of OTTs can additionally create barriers for entry into the OTT marketcurrently

it is an extremely low cost operation, but licensing can make OTT operations highly cost-

intensive. This will allow big OTT players to dominate and reduce incentives for innovation

and investment for smaller players by creating an oligopolistic OTT market. That is another

reason to prevent creation of a licensing regime for OTTs.

I.2. Concerns of Security, Privacy, Speech and Copyright Protection in

Relation to OTTs are already addressed by existing legal frameworks, and

new frameworks are not needed.

Many comments like that of COAI10, ASSOCHAM11, AUSCPI12 to name a few, have

suggested framing of laws to additional obligations upon OTTs for ensuring security,

privacy, regulation of speech, and protection of copyright. This is based on the rationale

that OTTs are unregulated in these matters, while TSPs are not. But unlike what is reflected

in these comments, OTT players DO NOT operate in a complete regulatory vacuum. There

are several laws and legislations in place or being deliberated, which already provide a

regulatory framework for the OTTs. The following table summarises the true comparison

between TSPs and OTTs governance frameworks13:

Telecom Operators Internet Services / OTT

Services

Regulatory

Framework

Access providers

(internet and voice) and

Online platforms and

services are regulated as

9 Ministry of Information and Broadcasting v. Cricket Association of Bengal AIR1995 SC1236 10 See COAI response to Q5, pages 9-11, in COAI Comments on TRAI Consultation Paper on

Regulatory Framework for OTT Services. 11 See ASSOCHAM response, page 17, in ASSOCHAM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 12 See AUSCPI response to Q5, pages 2-3, in AUSCPI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 13 Comparative Table provided by Amlan Mohanty, How Telcos and Internet Services Are Regulated

in India, May 8, 2015, available at http://techlawtopia.com/comparison-telcos-ott/

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carriage services

(national and international long

distance) are governed by

licenses issued under the

Indian Telegraph Act, 1855.

intermediaries under theInformation

Technology Act, 2000 and

rules on privacy, security,

content removal etc.

thereunder.

Privacy Telcos must ensure privacy of

communications and prevent

unauthorised interceptions.

They must also comply with

theprivacy rules in relation to

collection, disclosure and

transfer of information.

The privacy rules are

applicable to online

service

providers. Services

related to healthcare,

banking, finance etc.

could attract additional

obligations.

Content Telcos must implement

measures to prevent unlawful

content from being carried over

the network.

To qualify for safe

harbours, online

platforms must remove

unlawful content and

follow the blocking rules.

Security Telcos must install and

maintain interception and

monitoring systems at their

own expense, with provisions

for real-time monitoring of

traffic. Government agencies

must have direct access to this

data. Certain executives like

the CEO and CFO must be

security vetted if he/she is a

foreigner.

The government can

require online platforms

and service providers to

intercept, monitor or

decrypt information under

different rules.

Law Enforcement Telcos must be able to pinpoint

the geographical location of any

subscriber, and provide a

traceable identity of each user.

Online platforms may be

required to share identity

related information for

investigative purposes.

Encryption Telcos cannot employ bulk

encryption. Prior permission is

required for the use of

encryption above certain limits,

and the decryption keys must

also be deposited with the

government. The unified

license has done away with this

condition, and states that the IT

Act will govern the use of

encryption.

Under the IT Act, the

government can prescribe

the modes or methods for

encryption. Online

platforms must assist the

government with

decryption of information

or face criminal sanctions.

Penalties Breach of license conditions

could result in termination of

the license, and/or the

imposition of financial penalties

by the government. Non-

compliance with TRAI

regulations attract separate

penalties.

Online platforms can be

held liable under various

provisions of the IT Act, as

well as the Indian Penal

Code and other content

regulations.

Financial Conditions Telcos must satisfy certain

financial conditions to qualify

for a license, An entry fee and annual license fees are

N.A.

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also payable, besides spectrum usage charges as applicable.

QoS TRAI can set service quality

benchmarks with respect to call

drops, billing, tariffs, customer

service etc.

N.A.

VAS Value added services such as ring tones, caller tunes and

multimedia can be offered to

subscribers directly, subject to

compliance with TRAIs directives on billing,

subscriptions, renewals etc.

N.A.

VoIP Access providers can provide

internet telephony services, subject to certain restrictions.

They can provide PC-to-PC, and

IP to-IP telephony, but calls originating from India cannot

be terminated on mobile

phones or landlines in India.

N.A.

These provisions and some additional ones are expanded upon as following:

I.2.a. Issues of security and commercial liability for OTTs are addressed via the

Information Technology Act, 2000.

We would like to remind the Regulator that the Preamble to the Information Technology

Act, 2000 mentions that it is a legislation to provide legal recognition for transactions

carried out by means of electronic data interchange and other means of electronic

communication, commonly referred to as "electronic commerce". The provisions and rules

under the Act additionally cover grounds and procedures for security, encryption and key

disclosure by OTTs.

We submit accordingly that Table 3.1 provided in the TRAI Consultation paper14 comparing

regulatory frameworks for TSPs and OTTs, which has also been endorsed in several

comments15, is extremely flawed as it does not take into account regulations mandated

for OTT players through legislations. Regulatory framework for any entity may be

established in three ways: Via legislations, via judicial interventions and orders and, via

executive regulations which may or may not be enforced by TRAI. We submit that for the

Regulator to ignore any regulatory framework for OTTs which is not enforced through it,

is a very defective understanding of what it means to regulate OTT players. Therefore to

say that there is no requirement at all for OTTs regarding security conditions and

regarding Monitoring services i.e. Lawful Interception and Monitoring16, to omit that a

major amount of security concerns are covered by existing legislations17 and to omit

14 Page 43 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at 15 See for example comments of COAI, AUSCPI, ASSOCHAM etc. 16 See Table 3.1 on Page 43 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at 17 See paras 3.20-3.23 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top

Services, 27 March 2015, available at

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acknowledging that activities like DoS, spreading of malicious software etc.18 are actually

covered by the Information Technology Act as criminal offences19, is inherently incorrect.

For this reason, we disagree with comments of ASSOCHAM20 and of COAI21 which claim

that security and legal issues in working of OTTs have not already been addressed.

I.2.b. Issues of regulation of speech and content of OTTs are addressed via the

Indian Penal Code, 1860 and the Information Technology Act, 2000.

The Indian Penal Code as well as the Information Technology Act together provide a

framework for addressing speech concerns over OTTs. There is a long history of

applications of these legislations and their judicial interpretation in adherence with the

Constitution of India.

In this context, it is extremely worrying when the Regulator seeks to address speech issues

under the head of Safety22 on the internet through additional regulation while ignoring

that issues like stalking, child pornography, financial fraud etc. over the internet are

already addressed through the Indian Penal Code and the Information Technology Act.

There also seem to be suggestions that speech on OTTs be additionally regulated23 on

account of cultural sensitivitieswhich is an argument that tends to be unconstitutional.

We are also very concerned that the Consultation Paper regards that users of the social

media websites express opinions freely without the usual social restraint as a problem

which needs regulation24 along with some comments25, even though under our

Constitution, speech can only be regulated when it falls under a ground given under Article

19(2) and no ground of lack of social restraint is enough to prohibit it.26 Attempting any

sort of regulation of speech over OTTs outside of this context would thus be blatantly

unconstitutional. For this reason, we strongly disagree with AUSCPI comments which offer

that regulation for speech be framed outside of this existing legal framework for the

OTTs.27

1.2.c. Issues of consumer interests and their protection in respect of OTTs are

addressed via Consumer Protection Act, 1986 as well as Indian Contract Act, 1872

and Sale of Goods Act, 1930.

18 See Para 3.35 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services,

27 March 2015, available at 19 See section 43 of Information Technology Act, 2000. 20 See Page 10, ASSOCHAM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 21 See COAI Response to Qs 6 and 7, pages 11-12, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 22 Para 3.35 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at 23 Para 3.24-3.26 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at

24 Para 3.25 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27

March 2015, available at 25 See AUSCPI Response to Q5., page 2-3, AUSCPI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 26 See most recently, Supreme Court judgment in Shreya Singhal and Others v. Union of India (March 2015), available at 27 See AUSCPI Response to Q13., page 3-4, AUSCPI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

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The Consumer Protection Act along with the Indian Contract Act and Sale of Goods Act

forms the regulatory framework which can address the interests of consumers with respect

to OTTs by providing for a mechanism to register and proceed on consumer complaints

against OTTs, an appeals mechanism, provisions for protection for consumers in standard

forms of contracts, false representation, fraudulent sales and sale of defective goods and

services by OTT players.

So to argue, as has been done in the Consultation Paper, that consumer protection laws

and rules do not apply to OTTs in the same way as they do to brick-and-mortar sellers28

is inherently false. This is adequately illustrated by the multitude of cases concerning OTT

services which have been brought before and addressed by consumer forums.29

I.2.d. Issues of unfair business practices and competition concerning OTTs are

addressed through The Competition Act, 2002.

The Competition Act, 2002 seeks to address anti-competitive and unfair practices of

businesses, including that of OTT players. Accordingly, the Competition Commission of

India has been investigating the business practices of the OTT player, Google, to determine

if its search and advertising practices violate competition law in the country.30 So when

the Consultation paper raises concerns about the unfair business models and lack of search

neutrality of OTTs which is funded through advertising31, it is to be remembered that

competition law already provides a regulatory framework to regulate such businesses.

Additional regulation may be needed in this regard, but that needs to be arrived at only

after comprehensive understanding of such additional regulations on competition,

innovation, ease of accessibility and diversity in OTT services.

I.2.e. Issues of intellectual property, copyright and trademarks infringements

concerning OTTs are addressed through Indian Copyright Act, 1957, Trademarks

Act, 1999 and the Patents Act, 1970.

Infringement of copyright, trademarks, and patents, along with conditions for and

exceptions to the same, have already been defined under Indian Copyright Act, 1957,

Trademarks Act, 1999 and the Patents Act, 1970, respectivelyall of which are applicable

to OTT players in relevant contexts and read along with intermediary liability provisions of

the Information Technology Act and its interpretation in line with the Constitution.32

So it becomes extremely problematic when the Consultation Paper remarks that, There

have been suggestions to throttle speeds of such websites or OTTs that provide pirated

content or have a history of doing so. The intention is to make sure that content providers

28 Para 3.34 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at 29 See for eg., Ebay India Pvt Ltd v Ajay Kumar, available at http://indiankanoon.org/doc/140261623/, Rediff.com India Ltd v. Urmil Munja, available at

http://indiankanoon.org/doc/119372137/ and MD, Air Deccan v. Sri Rama Aggarwala, available at 30 See CCI receives probe report on Google anti-trust case (Mint, April 8 2015) available at < http://www.livemint.com/Companies/DEMtlk0TU90D3hoCdnYgWN/CCI-receives-probe-report-on-Google-antitrust-case.html> 31 Para 5.48 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at 32 See most recently, Supreme Court judgment in Shreya Singhal and Others v. Union of India (March 2015), available at

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become increasingly conscious of their errors.33 Any such move would bypass the

safeguards of the abovementioned legislations through unregulated use of their

gatekeeping power by the TSPs. It would be unabashedly unconstitutional and propagate

a chilling effect on speech and knowledge sharing on the internet, by giving TSPs/ISPs the

power to decide what constitutes pirated content and then make access to it difficult, when

this decisive power is exclusively reserved for the Judiciary under our Constitution34. For

these reasons we also stand in strong disagreement with comments which ask for

additional regulation of OTTs outside of the abovementioned framework to combat piracy,

as this would be decidedly unconstitutional.35

I.2.f. Issues of privacy are addressed through the Privacy Bill, 2014 and

Information Technology Act, 2000.

Article 21 of the Constitution has been interpreted to include a right to privacy.

Additionally, there have been discussions regarding a comprehensive Privacy Bill tabled in

the Parliament, which carves out protection for sensitive data on the internet.36 The

Consultation Papers concerns over users privacy leading to implications for the nations

security and financial health, cracking phishing, privacy, identity theft, child pornography

and cyber extortion37 are currently addressed by Information Technology Act, Indian Penal

Code38, and in future, by the Privacy Bill. For this reason, we disagree with comments of

ASSOCHAM which claim that privacy and legal issues in working of OTTs have not already

been addressed.39

I.2.g. No OTT regulation can operate outside the ambit of the Constitution of

India.

Lastly, the operation of all OTTs must fall under the scope of Constitution of India, and no

regulation of OTTs can stand to be in the violation of Constitutional safeguards and Part

III embodying Fundamental Rights.

In light of such legislations already existing to provide a regulatory framework for OTTs,

it is extremely dangerous for the Regulator to suggest questions in the Consultation Paper

which ignore their presence and application to OTTs. If any of the abovementioned

frameworks are found inadequate, imbalanced or lacking, the right route to take is a

democratic engagement with the Legislature via relevant MPs to consider amendment of

laws, or through petitions in Courts because changes in these frameworks impinge on

important Constitutional questions.

For the Regulator to take a backdoor approach to address relevant concerns through

creation of additional barriers without a bearing in law for the operation of OTTs is highly

undesirable. Creation of such barriers through imposition of technological constraints by

33 Para 3.36 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at 34 See Article 19(1)(a) read with Article 32 of Constitution of India. 35 See AUSCPI Response to Q5., page 2-3, AUSCPI Comments on TRAI Consultation Paper on

Regulatory Framework for OTT Services, 27 March 2015. 36 Elonnai Hickok, Leaked Privacy Bill: 2014 v. 2011 (Centre for Internet and Society, 31 March

2014), available at < http://cis-india.org/internet-governance/blog/leaked-privacy-bill-2014-v-2011> 37 Para 3.26 of TRAI Consultation Paper on Regulatory Framework for Over-the-Top Services, 27 March 2015, available at 38 See Section 43 of Information Technology Act, 2000, and Section 292 of Indian Penal Code. 39 See ASSOCHAM Response on page 10, ASSOCHAM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

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giving gatekeeper TSPs/ISPs the arbitrary power to decide which OTT content can flow on

their networks will constitute the very violation of the rule of law and will be in ignorance

of Constitutional safeguards.

I.3. Licensing or registration of OTTs not necessary for enforcement of

Indian laws for the OTTs.

We submit that merely for the enforcement of Indian law towards OTT players who are

operating or doing business in India, licensing or registration is not needed. This is because

there is enough legal basis for these OTT players to come within and submit to the

jurisdiction of India. Therefore, we would disagree with comments of ASSOCHAM to the

TRAI Consultation Paper which argue for additional regulation over the terms and

conditions of OTTs for the enforcement of Indian laws over OTT services.40

That Indian law is applicable and enforceable for OTT players operating in India is fairly

illustrated by the pronouncement of the Delhi High Court in Banyan Tree Holding Ltd v. A

Murali Krishna Reddy and Another41, where the Court held that any entity operating on

the World Wide Web will fall under jurisdiction of a forum when it specifically targets

users in that jurisdiction, and the users purposefully avail of the website. The Court held

that this would be true even when the website does not carry its business within the

territorial limits of that forum. These principles were further reiterated in Hydak

Fluidtechnick Gmbh and Another v. Flutec Industries in 2013.42 These judicial principles

lay down the framework for the enforcement of law in India is possible for OTT players

which do not have servers or are not based in India as long as their services are

purposefully availed in India. Therefore seeking to license or register or additionally

regulate them for legal enforcement purposes would be redundant, and would actually

hinder the development of the OTT market. The OTT services which occupy a dominant

market share however may be mandated to locate their servers within the territory of

India, but mostly, this is already the case.

I.4. Equal treatment of TSPs and OTT communication players should not

be mandated because unlike popular assumption these are not same

services.

Many of the comments to the TRAI Consultation Paper have called for application of same

regulations for TSPs and OTTs as they offer same services. COAI in its comments has

submitted that certain services offered by OTT players, such as messaging/instant messaging and VOIP telephony are perfect substitutes of the services that are being

offered by the TSPs under UASL/UL are perfectly substitutable.43 Therefore, it is argued that under the principle of Same Services, Same Rules,44 OTT players should also be subject to same regulations.

40 See ASSOCHAM Response on page 4, para 9, ASSOCHAM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 41 Banyan Tree Holding Ltd v. A Murali Krishna Reddy and Another , Delhi HC 2009, available at http://indiankanoon.org/doc/151685239/ 42 Hydak Fluidtechnick Gmbh and Another v. Flutec Industries, Delhi HC 2013, available at http://indiankanoon.org/doc/163669016/ 43 See COAI Response on page 1, Submission 3, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 44 See COAI Response on page 1, Submission 4, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

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We take a strong exception to this argument because of the following reasons:

I.4.a. OTT communication services and TSP telephony are two inherently different

technologies and cannot be classed as similar services.

OTT communication services are based on packet-switching technology, whereas TSP

telephony is based on circuit- switching technology. Because of this inherent difference in

the technologies they employ, OTT communication services and TSP telephony cannot be

classed as similar services even when they might seek to serve the same ends. TRAI

Recommendations on Internet Telephony of 2008 themselves recognise this.45 Therefore,

it is irrational to class to different technologies in the same box and aim to work out a

common pricing and regulatory mechanism for the two.

I.4.b.The quality of OTT communication services is still not at par with TSP

telephony.

Quality of OTT communication services is still worse off than TSP telephony in India. Most

of the mobile internet connection in India, which still constitutes a large part of internet

usage operates on 2G. This keeps the quality of OTT communication services low as

packets drop easily and calling services cannot keep up with the quality of TSP telephony.

Based on this quality of services differentiation, TRAI Recommendations on Internet

Telephony46 did not class them as similar services which need to be priced differently from

other internet data. There is rationale for this understanding to still continue.

I.4.c. Quality of Service norms should not be mandated for OTT services.

Some comments like that of COAI47 and ASSOCHAM48 have argued that QoS norms should

be mandated for OTT communication services under the principle of Same Services, Same

Rules. We have already pointed out how OTT and TSP communication cannot be equated

as same services in Section I.4.a, and therefore how the principle of Same Services, Same

Rules fails. Additionally, it would be highly unfair to mandate Quality of Service norms for

OTTs because they actually have no control over the network they are riding on. It is the

TSPs which control the network. So even if QoS norms are mandated, OTTs will not be

able to meet up to them because they would not be able to adjust the network to meet

these requirements.

I.4.d. Lack of data in the Indian context analysing OTT call quality and substitution

of revenues of TSP telephony by OTT communication services.

There is a lack of concrete data and studies in the Indian context regarding the impact of

OTT communication services, OTT call quality, spread of its usage and user experience,

and comparative analysis with TSP telephony and if OTT communications are really

affecting revenues of TSP telephony, and if yes, by how much. Unless such data is released

by an industry-independent authority, it will be extremely premature to comment on or

devise a regulation for differential pricing for data access and OTT communication services.

We suggest that TRAI take studies and steps to release this kind of data.

45 TRAI Recommendations on Issues Related to Internet Telephony, August 18, 2008, available at http://www.trai.gov.in/WriteReadData/Recommendation/Documents/recom18aug08.pdf 46 TRAI Recommendations on Issues Related to Internet Telephony, August 18, 2008, available at http://www.trai.gov.in/WriteReadData/Recommendation/Documents/recom18aug08.pdf 47 See COAI Response to Q5., pages 9-11, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 48 See ASSOCHAM Response on page 4, para 10, ASSOCHAM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

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We would additionally like to emphasise that while OTT services might not be subject to

the same regulatory obligations as TSPs, they are nevertheless subject to many regulatory

obligations as discussed in Section I.2. of this submission. We submit that considering that

OTT and TSP services are not the same, such difference in regulatory frameworks is

actually justified under Article 14 of the Constitution of India.49

49 See Article 14 of Constitution of India on Right to Equality.

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II.1. The principle of Net Neutrality must be endorsed through

accountability of gatekeepers to the Internet, while also preserving the

General Principles.

Most comments on the TRAI Consultation have spoken in favour of protecting Net

Neutrality as a principle. However most of them endorse a different definition of Net

Neutrality, or a different method for the protection of Net Neutrality. We also endorse the

principle of Net Neutrality on the Internet. But our definition of Net Neutrality differs from

the one proposed in the TRAI Consultation Paper50 and is as following: Net Neutrality

means the state where the gatekeepers to the internet (including ISPs, TSPs) are subject

to a governance framework in order to ensure they do not use their power to unfairly

discriminate between similarly situated persons, content, or traffic. Therefore we submit

that TSPs must be regulated to prevent unfair discrimination of network traffic, in

accordance with the above definition, but not all traffic management techniques.

Additionally we reiterate that for the preservation of Net Neutrality, regulatory design

should be such that it does not compromise other equally values which we have outlined

as General Principles in the Preamble. In other words, a regulatory regime for Net

Neutrality must not come at the cost of the General Principles, viz. competition, ensuring

access, lack of censorship, media diversity, innovation and vice versa.

II.2. Differential Pricing of Data/Paid Prioritisation Must Not be Allowed:

Disproportionate consumption of bandwidth by different OTTs should be

addressed by making bandwidth consumption fairer, not by allowing big

OTTs to pay more for more bandwidth and throttle speech of others.

COAI in its comments has cited Prof. Christopher Yoos paper Network Neutrality or Internet Innovation? to argue that social welfare can be maximised through differential pricing via price discriminate on both sides of the two-sided market.51 We disagree with

the application of this principle in the Indian context because of the following reasons:

II.2.a. Indian TSP market does not exist in perfect competition and is dominated

by a few TSP players. Prof. Yoos argument that differential pricing can create competition via creating specialised markets is workable only in a scenario of perfect competition, unlike the Indian

TSP market which while competitive, is also characterised by the dominance of a few big

players. This has been pointed out in numerous criticisms of Prof. Yoos arguments, including notably by Prof. Barbara van Schewick of Stanford Law School, in her paper,

Towards an Economic Framework for Network Neutrality Regulation.52 She argues out that differential pricing for OTTs can actually be harmful for innovation and competition in

the long run. The work of Vishal Misra, of the University of Columbia and others of the

50 para 5.3, TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015, available at 51 See COAI Response to Q14., page 17, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 52 van Schewick, Barbara, Towards an Economic Framework for Network Neutrality Regulation.

Journal on Telecommunications and High Technology Law, Vol. 5, pp. 329-391, 2007. Available at SSRN:http://ssrn.com/abstract=812991

14

IEEE53 also points out that thinking of internet as a two-sided market is simplistic, because

transactions are more complicated due to internet architecture, and therefore needs to be

determined via Shapley value under game theory.

We point this out to rebut comments like that of COAI which propose the use a two sided

approach to understand network transactions on the internet, and then draw conclusions.

We submit that such processes of analysing and drawing conclusions about network

transactions on the internet are obsolete and inherently flawed, because of the reasons

and research cited above.

II.2.b. There is a need for fairer consumption of bandwidth by different OTTs, not for fairer charging of such disproportionate consumption. We do however understand that some OTTs consume more bandwidth than other OTTs,

due to their early entry in the market and dominance, and because of the kind of heavy

data (for videos, images, gaming) they may need to transport. This disproportionate

consumption has two implications:

(i) It can lead to lack of media diversity on the internet, by reducing the speed of access

to content of some OTTs because of large portions of bandwidths used by other OTTs.

(ii) It additionally creates an unequal and unfair position whereby some OTTs by flooding

the bandwidth with their heavy data can easily and speedily bring their content to consumers, while other OTTs have to suffer from low speeds created by such flooding.

The Supreme Court of India, considered a similar situation with regard to newspapers in

its judgment of Bennett Coleman and Others v. Union of India.54 The minority judgment

by Justice Mathew in this opinion declared that lack of media diversity propounded by such

effect and the unequal consumption of (bandwidth) resource respectively stand in violation

of Article 19(1)(a) and Article 14 of the Constitution of India. This opinion has found

support in the subsequent case of Ministry of Information and Broadcasting v. Cricket

Association of Bengal55 whereby media diversity has been declared as an essential part of

Article 19(1)(a).

To address this issue of media diversity, Justice Mathew in his Bennett Coleman opinion

stated that the infrastructure on which a newspaper runs, viz. limited newsprint needs to

be equitably distributed within a limit. In other words, those who can afford owing to their

business models, to purchase more newsprint (or use more bandwidth in context of the

internet), should not merely be allowed to do so---because in such a scenario those who

have deep pockets will be able to promote their speech (in internet context, make their

content more accessible by using a larger portion of the bandwidth and slowing down the

content of others).

In interests of the consumer-citizens, viz. the right to access a diverse amount of

information under Article 19(1)(a), such a scenario should not be allowed. Regulation

instead, must be designed so that consumption of bandwidth by different OTTs can be

made more fairly, and not merely so that those with more money like dominant OTTs can

make their content more accessible. Accordingly unlike some comments56, we also

disagree with the application of ETNO principles in the Indian context. In this regard, zero-

53 Richard T. B. Ma, Dah Ming Chiu, Fellow, IEEE, John C. S. Lui, Fellow, IEEE, ACM, Vishal Misra, Member, IEEE, and Dan Rubenstein, Member, IEEE, On Cooperative Settlement Between Content, Transit, and Eyeball Internet Service Providers, 2008, available at http://dna-pubs.cs.columbia.edu/citation/paperfile/194/ToN_InternetEco2.pdf 54 Bennett Coleman and Others v. Union of India AIR1973 SC106 55 Ministry of Information and Broadcasting v. Cricket Association of Bengal AIR1995 SC1236 56 See COAI Response to Q8., page 13, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

15

rated traffic may be allowed as long as it can exist in a competitive market for zero-rated

traffic, and without violating any of the General Principles outlined in the Preamble.

II.3. OTTs should not be classified or treated as Value Added Services (VAS). ASSOCHAM in its comments has submitted that OTT services should be treated as VAS.57

We strongly disagree with this suggestion because OTTs cannot be called an evolved form of VAS, as ASSOCHAM comments suggest,58 because of the following reasons:

II.3.a. OTTs operate on the internet, and VAS operate on mobile networks. OTTs operate on the internet, i.e. the Application Layer on both wired and wireless

networks. VAS on the other hand operate on the mobile network only. OTTs thus operate

beyond mobile networks and therefore, cannot be treated as an evolved form of VAS.

II.3.b. VAS is mobile operator specific, OTTs are not, and should not be. Different VAS are provided only via a specific mobile operator network, i.e. different TSPs

have different kinds of VAS which they offer, and which operate only on that particular

TSP network. OTTs do not work this way as they can ride on top of all networks, they need

not be service provider/TSP- specific. If they are forced to be TSP specific, it will be a

violation of net neutrality as TSPs will then arbitrarily discriminate on what kind of OTT

content is allowed on their networks.

II.4.There is a very urgent need for transparency in traffic management on the internet. We take a very strong exception to the COAI comment that publication of various traffic

management techniques used for different OTT applications will only confuse the

consumer.59 We submit that such information will only add to the consumer understanding

of the services he can choose from, and go a long way in enhancing consumer choice and

access. Accordingly, TSPs must be mandated to publish various traffic management

techniques they use for different OTT applications, on both their wired and wireless

networks. Though we would also like to point out that this is NOT a sufficient condition to

ensure transparency and fair regulatory regime, because various other kind of mandatory

data disclosure by TSPs and OTTs are as important to construct and ensure a fair

regulatory regime. To reiterate, these must include, but may not be limited to, the

mandated disclosure of the following information:

Details of Traffic Management Techniques used by TSPs and ISPs for various kinds

of traffic, and for different OTTs (if applicable)

Amount of data carted by various TSPs and ISPs as part of their internet services

both over wired and wireless networks yearly, and over the past 10 years

Proportion and amounts of data carried by TSPs/ISPs for different OTTs and the

revenue earned from different OTTs on this data yearly, and over the past 10 years.

Pricing for data charges and revenue earned by TSPs/ISPs through their data

services on wired networks and on wireless networks yearly, and over the past 10

years.

Bandwidth capacities of various TSPs and ISPs in both their wired and wireless

networks yearly, and over the past 10 years.

57 See ASSOCHAM Response in para 9, page 4, ASSOCHAM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 58 See ASSOCHAM Response in para 9, page 4, ASSOCHAM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 59 See COAI Response to Q10 and Q11.., pages 14-15, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

16

Proportional usage of bandwidth by various OTTs over different TSPs and ISPs over

both their wired and wireless networks yearly, and over the past 10 years.

Details of current and past peering arrangements between different TSPs/ISPs both

over their wired and wireless networks.

17


III.1. It is unlikely that TSPs are losing revenue because of rise in OTTs in the Indian market. Many comments from TSPs and TSP Associations to the TRAI Consultation Paper have

submitted that concerns about investment in network infrastructure arise because TSPs

are losing their revenues to OTT players. It is on the basis of this assumption that further

comments regarding OTT regulation and charging of OTTs for bandwidth etc. are made.

We submit that this assumption is questionable, and it is unlikely that TSPs are losing

revenue because of rise of OTTs because of the following reasons:

III.1.a. There is no concrete data cited which backs claim of TSP revenue loss. Most of the comments which submit that TSPs are losing revenue because of OTTs cite

concrete data in their favour. COAI has cited some figures in its comments saying,

According to an industry research, the number of mobile operators generating revenues from OTT services by charging for data is falling year-on-year. In 2013, this figure was

one-fifth, down from 26% the previous year, and 50% in 2011. But it does not attribute a source for these figures, merely referring to an industry research. 60 It, therefore should not be given consideration, especially when it is in favour of turning regulation towards

TSP industry itself that such industry research is sought to be used. These claims do not seem to be supported by facts.

III.1.b. There are reports indicating the growth of TSP revenue is driven by data. On the other hand, there are many other news reports, which indicate otherwisethat TSP rise in revenue is actually driven by data. NASSCOM points out in its comments61 that

Vittorio Calao, Vodafone groups CEO has stated, Growth in India has accelerated again (October-December), driven by data.. Vodafones Indian unit outpaced its group counterparts to report 15% organic growth in revenue in the quarter through December

(2014), as subscribers used more of its premium data services, even as the basic voice

telecom service remained under pressure, like its top rivals.62 Airtel itself has stated in management presentation in November 2014 that mobile data revenue is going to drive

their future.63 There are also reports indicating that data revenues for TSPs is growing

exponentially, and these revenues make up for incidental loss from SMS and call

revenues.64

III.1.c. Approach of using perfect substitution rate to calculate loss of revenues

has been proven flawed and should not be relied upon to calculate TSP loss of revenues. COAI in its comments uses the concept of perfect substitution rate to indicate the loss of

TSPs from rise in OTT revenue for voice and messaging65. The application of a perfect

substitution rate is based on the assumption that every use of a free OTT voice or

messaging service translates to the loss of paid voice or messaging service offered by

60 See COAI Response to Q3., pages 6,7,8, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 61 See NASSCOM Response to Q3., NASSCOM Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015. 62 See http://articles.economictimes.indiatimes.com/2015-02-06/news/58878696_1_organic-

service-revenue-vittorio-calao-vodafone-india 63 See http://www.airtel.in/wps/wcm/connect/0cddd6cf-eaac-42e5-8366-da7cf62f087d/Bharti-

Airtel_Management-Presentation-Q2FY15.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=0cddd6cf-eaac-42e5-8366-da7cf62f087d 64 Deepak Shenoy, Telecom Companies Are Not Losing Money to Data Services: The Net Neutrality Debate April 15, 2015, available at http://capitalmind.in/2015/04/telecom-companies-are-not-losing-money-to-data-services-the-net-neutrality-debate/ 65 See COAI Response to Q8, page 13, COAI Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

18

TSPs. Industry-independent academic studies66 in the context of media piracy have

indicated that this approach of using a perfect substitution rate just does not result in

accurate data about the loss of revenues, because the opportunity cost in scenarios where

prices of products or services differ, is not perfect.

In other words, people do not use paid services with the same frequency or duration that

they use free or cheaper services. Therefore to count revenue from each use of an OTT

service as a revenue loss from each TSP service is problematic and not indicative of reality.

III.2. Even in a scenario of falling revenues from TSP telephony, the

burden of innovation and innovative business models in the TSP market

should be borne by TSPs, and not sought to be covered by burdening OTT

communication services.

Even if it is found that revenues from TSP telephony are falling at behest of competition

from the different technology of OTT communication services, the burden should be on

TSPs to use and develop innovative services, technologies, and business models to recover

this falling revenue. If OTT communication services are sought to be regulated because

TSPs cannot compete accordingly, then it will merely slow down the progress in adopting

newer technologies like packet switching in our communication on a wide scale. Such a

regulation would be against innovation and technological progress.

III.3. TSP licensing regime should be modified to remove restrictions on

the use of new technologies in PSTN networks, to promote TSP

innovation.

To enable TSPs to take up the burden of innovation to compete with OTT communication

services, they should be given freedom to utilise all new technologies as available. In this

regard, we endorse ACTOs submission67 that telecommunication licensing regime in India

should drop the obsolete restrictions on VoIP services which prevent TSPs from connecting

them to PSTN networks. With the availability of appropriate regimes to use such newer

technologies, TSPs will be able to become more innovative and efficient in their services

and have a better market standing.

III.4. Models for bearing Network Upgradation and Expansion Costs in

Absence of Differential Pricing

We have submitted earlier in Section II.2. that differential pricing or paid prioritisation

must not be allowed. In absence of this, we suggest a few models here for bearing of

network upgradation costs. The model which most effectively adheres to the

abovementioned principles in this regard must be chosen. In absence of relevant data in

the Indian context, we are unable to comment at this point what exactly that model among

the following might be.

66 Joe Karaganis, Media Piracy in Emerging Economies, (Social Science Research Council, March 2011), page 14, available at http://www.ssrc.org/publications/view/C4A69B1C-8051-E011-9A1B-001CC477EC84/ 67 See ACTO Response on page 5, ACTO Comments on TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015.

19

III.4.a. Model 1: Utilisation of USOF for creation of municipal infrastructure by

the Government.

Governments, till now, have not utilised the Universal Service Obligation Fund (USOF)

created for the expansion and upgradation of telephony and internet services to all parts

of the country. The USOF is collected as a percentage of revenues of all TSPs and is part

of their license agreement with the Government, for this very purpose. In this manner,

the Government has actually not used large sums which it does have to bear network

expansion and upgradation costs. These must be utilised and a deadline for their utilisation

must be set.

III.4.b. Model 2: Re-evaluation of USOF contribution obligation by TSPs and

mandate to directly upgrade infrastructure.

In light of lack of utilisation of USOF, another model might be to directly mandate the TSPs

to upgrade their infrastructure by amending their licensing terms. Under this model, the

percentage of revenue which is currently being contributed to USOF should be reduced, or

terminated, and instead, TSPs should be directly mandated to use that percentage of their

revenues for upgradation of their networks and infrastructure. Adequate transparency and

diligence safeguards should be put forth to ensure that TSPs do use that percentage of

their revenues for network upgradation. Cancellation of TSP licenses can be the

repercussion if they fail to do so.

III.4.c. Model 3: Creation of a net-neutral Public Option ISP to create market

incentives for network upgradation by private TSPs/ISPs.

A third model might be the use of a public service ISP to create competition and conditions

in the market which will incentivise other TSPs/ISPs to upgrade their networks. In their

paper The Public Option: A Nonregulatory Alternative to Net Neutrality68, Columbia

professor and IEEE member Vishal Misra and Richard Ma, Assistant Professor at National

University of Singapore, use game theory modelling of ISP transactions to suggest that

the creation of a public service ISP can actually help create such conditions. It is argued

that investment by the municipalities into a creation of a public service ISP which uses

upgraded infrastructure will drive competition for other TSPs/ISPs, and thus incentivise

their investments in such upgradation. This will benefit consumers in terms of prices,

choice and quality. Additionally the municipality will also be able to earn revenue through

such public service ISP. This model has proved efficient in Stockholm where the city laid

fiber (raising money through municipal bonds), customers have 100 Mbps Internet at one

quarter the price of what customers pay in the US for a connection that is 1/10th the

speed.69

68 Richard T.B.Ma and Vishal Misra, The Public Option: A Non-Regulatory Alternative to Network Neutrality (IEEE, 2012), available at http://dna-pubs.cs.columbia.edu/citation/paperfile/212/ToN_PublicOption.pdf 69 Linda Crane, Net Neutrality is All Good and Fine, The Real Problem is Elsewhere (University of

Columbia), available at http://www.cs.columbia.edu/2014/net-neutrality/

20

Summary of Counter Comments

General Principles To Be Preserved:

Ensuring Conditions for Innovation in both OTT and TSP markets.

Ensuring High Competition in both OTT and TSP markets.

Ensuring Access to the Internet (by enhancing and guaranteeing Reach,

Quality of Services, and Affordability of Internet Connections) for

consumers and Reducing Digital Divide.

Ensuring Access to Diversity of Content on the Internet for all citizens.

Ensuring Freedom of Speech, or no illegitimate censorship on the Internet.

Ensuring Regulation of Gatekeeping Power of TSPs, or Net Neutrality. Our

definition of Net Neutrality differs from the one proposed in the TRAI

Consultation Paper70 and is as following: Net Neutrality means the state where

the gatekeepers to the internet (including ISPs, TSPs) are subject to a

governance framework in order to ensure they do not use their power to unfairly

discriminate between similarly situated persons, content, or traffic.

We submit that in designing a governance framework no one of the above principles should

be sought to be preserved at the cost of another and vice versa. In light of this, we are

critical of COAIs Sabka Internet, Sabka Vikas initiative, as it seeks to preserve access

at the cost of net neutrality, competition, and innovation in OTT markets.

I. On Governance/Regulatory Mechanism for OTTs and TSPs

I.1. There is no basis for developing a licensing or registration regime for OTT services.

I.2. Concerns of Security, Privacy, Speech and Copyright Protection in Relation to OTTs

are already addressed by existing legal frameworks, and new frameworks are not needed.

I.3. Licensing or registration of OTTs is not necessary to provide legal basis for

enforcement of Indian laws for the OTTs.

I.4. Equal treatment of TSPs and OTT communication players should not be mandated

because unlike popular assumption these are not same services.


II.1. The principle of Net Neutrality must be endorsed through accountability of

gatekeepers to the Internet, while also preserving the General Principles.

II.2. Differential Pricing of Data/Paid Prioritisation must not be allowed. Disproportionate

consumption of bandwidth by different OTTs should be addressed by making bandwidth

consumption fairer, not by allowing big OTTs to pay more for more bandwidth and throttle

speech of others.

II.3. OTTs should not be classified or treated as Value Added Services (VAS).

II.4.There is a very urgent need for transparency in traffic management on the internet

and setting mandate for disclosing other kinds of information. These should include:

Details of Traffic Management Techniques used by TSPs and ISPs for various kinds

of traffic, and for different OTTs (if applicable)

70 para 5.3, TRAI Consultation Paper on Regulatory Framework for OTT Services, 27 March 2015,

available at < http://www.trai.gov.in/WriteReaddata/ConsultationPaper/Document/OTT-CP-27032015.pdf>

21

Amount of data carted by various TSPs and ISPs as part of their internet services

both over wired and wireless networks yearly, and over the past 10 years

Proportion and amounts of data carried by TSPs/ISPs for different OTTs and the

revenue earned from different OTTs on this data yearly, and over the past 10 years.

Pricing for data charges and revenue earned by TSPs/ISPs through their data

services on wired networks and on wireless networks yearly, and over the past 10

years.

Bandwidth capacities of various TSPs and ISPs in both their wired and wireless

networks yearly, and over the past 10 years.

Proportional usage of bandwidth by various OTTs over different TSPs and ISPs over

both their wired and wireless networks yearly, and over the past 10 years.

Details of current and past peering arrangements between different TSPs/ISPs both

over their wired and wireless networks.


III.1. It is unlikely that TSPs are losing revenue because of rise in OTTs in the Indian

market. This is because most reports indicate that TSPs in India are gaining revenues

driven by data.

III.2. Even in a scenario of falling revenues from TSP telephony, the burden of innovation

and innovative business models in the TSP market should be borne by TSPs, and not

sought to be covered by burdening OTT communication services.

III.3. TSP licensing regime should be modified to remove restrictions on the use of new

technologies in PSTN networks, to promote TSP innovation.

III.4. Models for bearing Network Upgradation and Expansion Costs in Absence of

Differential Pricing: These could include strengthening the USOF fund utilisation,

mandating TSPs to invest in expansion and upgradation of network infrastructure by

cutting down percentage contribution to USOF, and by creating a public option or municipal

ISP to enhance competition, expansion and net neutrality, while also generating

government revenues.