Wednesday, March 16, 2016

Will India Regulate OTT Voice and Messaging Under Common Carrier Rules?

The problem with network neutrality, many would argue, is that it is so hard to define with precision, perhaps impossible to enforce  and seemingly so malleable a concept that it goes beyond protecting consumer access to all lawful apps and impinges on what might be considered normal methods used by retailers to create promotions and value for their customers.

And, as always is the case, every instance of public policy setting has concrete implications for the fortunes of private companies operating under those rules, creating winners and losers.

One might argue that TRAI’s new interpretation of network neutrality rules, which barred sponsored data programs such as Free Basics, seen as harmful to Facebook, also benefitted Google.

Another set of potential moves by TRAI might help telcos protect their carrier voice and messaging businesses.

Reportedly, Telecom Regulatory Authority of India (TRAI) is considering a review of whether over the top apps such as WhatsApp and Skype should be regulated in the same way as carrier voice and messaging, applying common carrier rules to some unknown extent.

That obviously will benefit telcos and mobile operators in the short term, harm OTT app providers, raise prices for consumers and likely also increase regulatory revenues related to providing voice and messaging services.

An earlier TRAI white paper issued in March 2015 noted that OTT voice and messaging apps were cannibalizing telecom service provider revenues.

The new white paper could be the opening gambit that leads to a move to regulate OTT voice and messaging as common carrier voice is regulated.

That earlier report noted that voice calls on telecom networks are 12.5 times more expensive than those through OTT services, while carrier messaging rates are 16 times higher than OTT rates.

Whenever new telecom policy frameworks are considered, it is unavoidable that private interests are favored or harmed.

Barring sponsored data or common carrier regulation of OTT apps are no exceptions.

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