It appears greater regulation of apps that compete with telecom carrier apps is coming in India, as the Telecom Regulatory Authority of India (TRAI) has launched an inquiry to such issues.
Though in principle any new regulations would apply to mobile and fixed network app usage, most of the impact will fall on mobile app use, simply because most of the usage now happens on mobile networks.
The consultation will result in recommendations to be forwarded to the Department of Telecommunications on regulation of apps that “can be regarded the same or similar to the services” provided by communications service providers.
Among the obvious potential implications are changes in app provider taxes, fees or other costs of doing business. Among the questions TRAI hopes to address is whether and how “OTT service providers may participate in infusing investment in the telecom networks?” In other words, will app providers have to pay taxes or fees when their apps are used that contribute to service provider infrastructure?
In short, the TRAI inquiry could lead to recommendations that eliminate the regulatory arbitrage opportunity, where consumers find that use of edge provider apps cost less than those provided by communications service provider services.
As every public policy initiative has private actor implications, new recommendations could “level the playing field” for app and carrier communications services or apps. That obviously would help the communications service provider business model, harm app provider models and produce more revenue for access providers, less for app providers.
At the moment, says TRAI, “pricing arbitrage of OTT domestic voice communication services has the potential of significantly disrupting existing telecom revenue models.”
“Any impact on revenue streams to TSPs from growth of traffic due to OTT services on account of regulatory imbalances, if any, may require a fix, while other reasons of impact may be left to the market to deal with,” TRAI says.
TRAI wants--and will get--feedback on whether there now exists a “non-level playing field between OTT providers and TSPs providing same or similar services.”
To predict what will be said, app providers will argue their apps and features are not providing the same or similar functionality, while access providers will argue the reverse. That makes it most likely that TRAI will recommend new regulations on app provider functions.
“In case the answer is yes, should any regulatory or licensing norms be made applicable to OTT service providers to make it a level playing field?” TRAI asks.
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