BIF recommends separate regulations for OTT and telecommunications

The Broadband India Forum (BIF) policy think tank has sent its recommendations to the new government on what its 100-day plan should look like. The recommendations, reviewed by MediaNama, cover all the major policy issues in the technology space.

What is BIF?

BIF is a policy forum and think tank for the broadcast ecosystem. Its prominent members include Amazon, Intel, Google, and Meta.

BIF urged the government to maintain an approach to regulating over-the-top (OTT) services other than regulating telecommunications and broadcasting networks. Significantly, the Ministry of Information and Broadcasting (MIB) has introduced a draft bill aimed at bringing OTT services (streaming platforms such as Netflix) under the scope of broadcasting regulation. Similarly, in a consultation conducted by the telecoms regulator last year, telecoms companies said that OTT messaging services (calling and messaging platforms such as WhatsApp and Telegram) should be subject to the same rules as telecoms companies.

BIF, on the other hand, argues that, unlike telecommunications and broadcasting network operators, OTT services operate at the application layer. Given the differences between them, OTT should be treated separately from online services in all future regulations and policies. It suggests that OTT services should be regulated under the Information Technology Act or the Digital India Act (DIA) and not any other act or regulation. BIF stressed the need for a “growth-oriented and forward-looking” policy approach to OTT services.

Discussing national broadcast policy, BIF suggests that the government could consider creating a common OTT (streaming service) platform such as ONDC, allowing people to access content from different providers in one place, eliminating the need to download multiple apps.

Other noteworthy recommendations made by the think tank:

The need to implement the Online Gaming Rules 2023:

For the online gaming sector to thrive, it needs regulatory certainty. Regulatory certainty in the sector can lead to more investment opportunities in local gaming companies, creating jobs and contributing to the national treasury. Therefore, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2023 (Online Gaming Rules) should be implemented. Implementing these laws will ensure that illegal offshore operators causing damage are held legally accountable. This will be done by establishing self-regulatory bodies to register legitimate skills-based businesses.

In addition to implementing the regulations, the Ministry of Electronics and Information Technology (MeitY) should also consider introducing specific obligations under the Code of Ethics in Part III of the Information Technology Regulations prohibiting publishers from placing advertisements for online betting and gambling.

Consultation with stakeholders on the principles of responsible AI:

To reap the benefits of AI, it is important to ensure that AI systems are safe and manageable. This includes industry-wide standards for the design and operation of AI systems. The BIF says the industry can work with standard-setting bodies to develop voluntary codes that will enable continuous improvement in AI governance. It also mentions that the Digital Personal Data Protection Act (DPDP, 2023) and the IT Act may propose audits of AI systems to ensure that the industry adheres to the standards set.

The government can also adopt measures to expand the growth of the AI ​​startup and developer ecosystem by promoting open source technologies and basic models in AI. This can be done by providing a policy framework and increasing awareness of the benefits of open source AI.

Regulatory sandbox for new technologies:

The government should create a system to trial, test and experiment with high-risk technologies such as blockchain, augmented reality (AR), virtual reality (VR) and extended reality (XR). BIF argues that regulators around the world are using this approach to test new services. He cited the example of Saudi Arabia, which has launched an emerging technology regulatory sandbox to increase investment by understanding the challenges faced by investors and entrepreneurs, while supporting innovative solutions.

Changes to the draft Digital Competition Act:

There is a need for broad and inclusive multi-stakeholder consultations on the need for an ex-ante framework, which will be introduced by the Digital Competition Bill. The ex-ante rules proposed in the Digital Competition Bill are aimed at preventing anti-competitive conduct, unlike the current ex-post framework under the Competition Act, 2002, where the Competition Commission of India (CCI) intervenes after anti-competitive conduct occurs.

The consultation would enable stakeholders to present their concerns and suggestions and enable the government to assess the effects of the regime ex-ante. Following consultation, the government should propose a revised bill for review.

Conduct market research on the dynamics of digital markets:

India should prioritize market research to distinguish natural monopolies from other market structures. Focusing on ex post damage assessment and judgments, rather than an ex ante framework, will enable the competition regulator to make more specific interventions. Furthermore, BIF argues that the government should apply the proposed ex ante framework contextually and in a phased manner and follow a principles-based approach when implementing the bill.

Conducting consultations on the DPDP Regulations:

These principles will provide clarity on notification requirements, data breach notification procedures, parental consent for children’s data, waivers and complaint procedures, among other obligations, and will introduce numerous obligations for digital businesses. Therefore, stakeholders must be given time to understand the impact of the law and provide constructive feedback.

Organizations would need time to coordinate their internal processes and resources to comply with the DPDP Act. The BIF suggests a two-year implementation timeline for the bill, citing the examples of the European Union, Brazil, Japan and California in the US, which have granted two-year implementation periods. To provide stakeholders with a source from which they can get clarification on the DPDP Act, BIF says there is a need to create a dedicated unit under MeitY or the Data Protection Board of India.

Present the Digital India Bill for public consultation:

In 2023, MeitY held stakeholder consultations to frame the principles that should guide the Digital India Act. The draft bill should be subjected to detailed public consultations before final enactment.

The 6 GHz band should be delicensed for the public good:

As argued earlier in a letter sent by the think tank to the Department of Telecommunications (DoT) last year, the BIF mentions that the 6 GHz frequency band must be allocated in a license-exempt manner for WiFi, short-range devices (SRDs), and research and development are necessary urgently. Using this spectrum resource for WiFi – both as public WiFi and indoor WiFi – is in the public interest, he explains.

Interestingly, the Cellular Operators Association of India (COAI) wants exactly the opposite and has stated as much in its recommendations to the new government. He argues that this spectrum band must be licensed for 5G networks, especially for International Mobile Telecommunication (IMT) services.

Spectrum allocated directly to companies:

Captive Private Networks are local area networks that use 3GPP-based network spectrum to create unified connectivity and a secure means of communication within a defined area. BIF says 5G Captive Private Networks have many important applications, such as modernizing manufacturing, improving healthcare and education, and improving agricultural yields. Given the societal benefits of these networks, BIF suggests that companies should have the right to use the spectrum and choose partners to create their captive private networks.

On the other hand, COAI does not want companies to have their own private networks. It says telecommunications companies are “fully capable of delivering any customized solutions in the most competitive and cost-effective manner.” It has in the past opposed demands from companies like Tata Consultancy Services (TCS) to launch its own 5G networks.

Temporary frequency allocations for satellite communications services:

BIF mentions that according to media reports, the Department of Transport intends to discuss the matter with TRAI before finalising the spectrum allocation policy. It believes that such considerations will delay the launch of the service even though the infrastructure for implementing satcom services is already in place.

The advisory team adds that several operators of very small aperture terminals (VSAT, a small terrestrial station used to transmit/receive data, voice and video signals via a satellite communications network, excluding broadcast television) have already been allocated spectrum in the Ku/Ka bands before announcement of the Telecommunications Act. The BIF suggests that the government could consider a temporary allocation of spectrum to non-geostationary satellite systems (NGSO) under their VSAT licenses.

The spectrum usage fee for satellite television should be limited to 1% of adjusted gross revenue:

Currently, there is no uniformity in spectrum usage charges (SUC) for satellite services. While BSNL, which uses spectrum under the sui-generis Global Satellite Phone Services (GSPS) license, commercial VSAT license holders pay a 4% fee, satellite services with domestic long distance licenses pay license fees using a formula-based billing mechanism.

Given the potential of satcom to bridge the digital divide, spectrum charges should be rationalized to promote satcom services. BIF argues that the telecom regulator has also recommended a tax of 1% of adjusted gross revenue (AGR) for VSAT holders and domestic long-distance permit holders.

In addition, to encourage the use of satellite communication services, BIF suggests that satellite communication should be exempt from paying contributions to the Universal Service Obligation Fund (USOF) and license fees. He adds that there are precedents for such exemptions, with fixed-line Internet services being exempt from license fees for the last 12 years. The telecom regulator and DoT are also in agreement in principle not to impose LF on wireline broadband services for a period of 10 years. A similar approach should also be taken for satcom.

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