Why TRAI wants to Regulate WhatsApp, Similar Services?

Table of Contents☰

What’s in today’s article?

Why in News?
About Telecom Regulatory Authority of India (TRAI)
Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT)
News Summary
Why a Regulation for OTT Services?
Why Telecom Operators want OTT Services to be Regulated?
Draft Indian Telecommunication Bill, 2022

Why in News?

In a consultation paper released recently, the Telecom Regulatory Authority of India (TRAI) has asked stakeholders to send suggestions about regulating Over-The-Top (OTT) communication services like WhatsApp, Zoom, and Google Meet.

About Telecom Regulatory Authority of India (TRAI)

The entry of private service providers brought with it the inevitable need for independent regulation.
The Telecom Regulatory Authority of India (TRAI) was, thus, established by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997.
TRAI’s mission is to create and nurture conditions for growth of telecommunications in the country in a manner and at a pace which will enable India to play a leading role in emerging global information society.
Objectives –
- To regulate telecom services, including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government.
- One of the main objectives of TRAI is to provide a fair and transparent policy environment which promotes a level playing field and facilitates fair competition.
In pursuance of above objective TRAI has issued from time to time a large number of regulations, orders and directives to deal with issues coming before it.

Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT)

The TRAI Act was amended by an ordinance, establishing a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI.
TDSAT was set up to adjudicate any dispute –
- Between a licensor and a licensee,
- Between two or more service providers,
- Between a service provider and a group of consumers, and
- To hear and dispose of appeals against any direction, decision or order of TRAI.

News Summary

The Telecom Regulatory Authority of India (TRAI) is revisiting its earlier stance as it has started consultations on how Over-The-Top (OTT) services can be regulated.
Almost three years ago the TRAI had recommended against creating a specific regulatory framework for over-the-top (OTT) communication services like WhatsApp, Zoom, and Google Meet.
In a consultation paper released recently, the TRAI has asked stakeholders to send suggestions about regulating services and whether a selective banning of OTT services can be done as opposed to shutting down the entire Internet.
Regulating such services has been a long standing demand of telecom operators, who have for years, been advocating for ‘same service same rules’.

Why a Regulation for OTT Services?

To bring Regulatory Parity –
- The TRAI has essentially argued that while telecom operators and OTT platforms such as WhatsApp offer similar services, they are not bound by the same requirements – as a result, there is a need for regulatory parity.
- Telecom operators need a service licence for offering voice and SMS services.
- 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 licence”.
Also, OTT services do not financially contribute towards increasing telecom services penetration in the country unlike the operators who have to pay towards the Universal Service Obligation Fund (USOF).

Why Telecom Operators want OTT Services to be Regulated?

Apart from a different regulatory regime, there are other financial considerations for the tussle between telcos and Internet applications.
Key among them is the avenue of revenues that has shifted from voice and SMS to data.
TRAI said that the contribution of data usage in the revenue from mobile subscribers has grown more than ten times from 8.10% in the quarter ending (QE) June 2013 to 85.1% in the QE December 2022.
From the year 2014 to 2022, the volume of monthly wireless data usage in India grew by about 156 times from 92.4 million GB (December 2014) to 14.4 trillion GB (December 2022), TRAI said.
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 (quarter ending December 2022).

Draft Indian Telecommunication Bill, 2022

At present, the Indian Telecommunications sector is governed by three separate Acts of Parliament –
- Indian Telegraph Act 1885,
- Indian Wireless Telegraphy Act 1933,
- Telegraph Wires, (Unlawful Protection) Act 1950
The draft Telecommunications Bill, 2022 aims to consolidate these three separate Acts.
The Draft Bill proposes to include OTT services in the definition of telecommunication services.
- As per the draft law, providers of telecommunication services (such as WhatsApp, Telegram) will be covered under the licensing regime, and will be subjected to similar rules as other telecom operators.
- This issue has been under contention for several years now as the telecom service providers (such as Airtel, Vi, Jio) seeking a level-playing field with OTT apps over communication services such as voice calls, messages, etc.
- The telecommunication services had to incur high costs of licences and spectrum, while OTT communication players used their infrastructure to offer free services.
- So, OTT communication services have to take a licence now and be subjected to the same conditions governing telecom players in India, like quality of service and security rules, etc.

Q1) What is the Universal Service Obligation Fund (USOF)?

Universal Service Obligation Fund (USOF) is the pool of funds generated by 5% Universal Service Levy that is charged upon all the telecom fund operators on their Adjusted Gross Revenue (AGR).