Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) have told the Telecom Regulatory Authority of India (TRAI) that so-called over-the-top (OTT) companies like Netflix should be forced to subsidise the telco networks they so rely on
Telecom operators in India are calling on the government to make major internet and technology companies help pay for the network infrastructure that they use to provide services.
The proposition to TRAI was created by Reliance Jio, the country’s largest operator, with more than 450 million subscribers. In the proposal, Jio suggests that tech companies who use a large chunk of the network’s traffic should provide a contribution towards the costs of the networks based on factors including turnover, user numbers, and traffic consumption.
“We suggest that TRAI should recommend for OTT providers contributing in the network development and building a backbone for the country,” said the company. “In this effort, the Other OTT service providers should also be required to pay their fair share.”
Jio, which reportedly carries 55% of India’s total data traffic, claims that there is a “near consensus” among operators globally on the subject.
Indeed, the so-called ‘fair share’ debate has been raging in Europe and elsewhere for many months now, receiving large scale lobbying by the operators directly, as well as via associations like the European Telecommunications Network Operators’ Association (ETNO) and the GSMA.
These calls to action have received a mixed response from international governments, with some – like Spain – supporting the concept, while others – such as Denmark, Sweden, and Germany – warning the European Commission not to be too hasty in ruling in favour of the telcos.
In the case of India, it should come as no surprise that both of Jio’s major competitors, Airtel and Vi, support the proposed payments, with the former suggesting that only the largest tech companies should be charged.
Tech companies, naturally, have criticised the suggestion of a ‘fair share’ payment, arguing that their services have boosted operator revenues and that covering network costs would reduce the available capital for innovation. They also warn that such measures could lead to price increases being passed to consumers.
On a more fundamental level, the tech companies rightly point out that any forced payment would essentially allow the telcos to be paid twice for delivering the same data – once by the content creator and once by the consumer.
There are also net neutrality implications to consider, with the payments potentially infringing on the principle that requires all internet traffic to be treated equally.
“A mandatory / mandated collaborative framework between OTT service providers and licensed TSPs [telecoms service providers] may lead to the creation of a system where TSPs [telecommunications service providers] can demand compensation from OTT service providers in the form of revenue sharing or network usage fees,” said Asia Internet Coalition, an industry association group that represents some of the biggest tech companies including Apple, Amazon, Microsoft, Google, Meta, Netflix, and Spotify.
“This will impact net neutrality and consumer well-being in the long run. More importantly, a revenue sharing or network usage fees model will likely violate the principle of net neutrality.”
Jio, however, have been quick to refute this claim, saying that “such an approach will be within the principles of Net Neutrality and there will be no impact on prevention of unreasonable discrimination of internet traffic based on content, nature of service etc.”
If the ongoing back-and-forth on the matter in Europe is anything to go by, the ‘fair share’ discussion in India still has a long way to go before a satisfactory conclusion can be reached.
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