[This is the second part of a two-part post authored by Abhilash Roy and Hrishikesh Bhise, fourth-year students at the National Law Institute University, Bhopal. Click here for Part I]
Argument for a Level Playing Field
‘Fair and reasonable opportunities to all market players’ and the concept of ‘a level playing field’ for market participants is important for a regulatory framework. A good regulatory framework is designed to induce confidence in the market and stems from necessity, more so, the imperativeness that positive competition practices in the market thrive and ensure opportunities to all participants without indirectly favouring a specific section of the market. It is evident that absence of a regulatory framework for OTT services is fostering poor competitive environment. For example, massive digital ad-revenue and the power/outreach of internet has facilitated the growth of OTT companies as giants in the industry and gives them an advantage over TSPs with respect to similar services such as messages and VoIP, among other things such as lack of a digital ad-revenue space for TSPs. However, there is ample evidence to suggest that telecom industry is not a ‘victim’ in a clinical sense as TSPs still charge customers for data consumption for using OTT services and an increase in these services results in increased data consumption which then translates to increased revenue for telecom companies. Any regulatory framework would have to be formulated by keeping in mind the revenue model of both stakeholders.
How Should Law Develop around OTTs
The TSPs are required to comply with a host of laws and regulations. Some of them are the Telegraph Act 1885, TRAI Act 1997, IT Act 2000, conditions imposed by the license agreement between the service provider and the government, etc. There are several obligations imposed on the service providers and in case of non-compliance, penalties and restrictions are imposed. However, in case of OTTs, the regulatory environment is almost non-existent. Provisions of the IT Act and Indian Penal Code continue to ensure content-based regulation and seek to protect the ‘citizens’ from ‘harmful content’, thus fulfilling the second way mentioned above with reference to policy objective. Escaping the shackles of program and advertisement regulation, OTT streaming platforms are riding the creative wave in the nation while attracting usership from all segments of the society.
Recently, a famous OTT platform advertised liquor while airing a cricket match; in absence of advertisement codes there would be more examples like this in the future until it is absorbed in self-regulation codes. As expected, OTT streaming services are interested in the self-regulation model that functions on set of rules devised by the players themselves and is monitored by an independent association. While this model might turn out to be fruitful, several platforms have already raised their objections regarding this that mainly dealt with fear of excessive scrutiny of content and loss of business associated with it. This is a blow to the already weak self-regulation model which is incapable of addressing all the issues created by the OTT industry and is more streaming services oriented while not catering to communication-based OTTs, on the other hand, the clamour for content regulation can be addressed by existing provisions of the law. To address the concerns of streaming platforms, a progressive ombudsman model was recently suggested and adopted by OTT players instead of placing a separate council for self-regulation, this would definitely reduce the objections in place because the involvement of council reduce the risk of malicious targeting and collusion within a council and allows every OTT to setup their complaint division for first-hand registering of complaints. However, there is still no clever solution for regulation of the communication-based OTTs as content regulation is not the sole consideration there.
The important question which still lies in the open is how will the government resolve the conflict between TSPs and OTTs while keeping in mind that the OTT services account for the sudden surge in social and economic well-being due to increase in access to information, entertainment and business opportunities; and imposing a regulatory regime involving licensing and programming qualifications equivalent to TSPs may break the momentum with which they are growing. The government, thus, needs to strike a fine balance between the growth of the industry built around OTT services and the interests of the stakeholders.