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    Here’s what telcos think should be factored into the National Broadcast Policy

    Paid television in India is experiencing a decline, due to over-the-top (OTT) players and DD Free Dish creating a discriminatory situation, Airtel says in its submission to the Telecom Regulatory Authority of India’s consultation on the National Broadcasting Policy. “Due to technological developments and convergence, the same content can now be delivered using multiple mediums. However, the regulatory treatments governing the same are different, thereby creating a non-level playing field,” the company points out, while mentioning that OTTs and DD Free Dish currently operate without regulatory oversight. [Quick context: DD Free Dish is a free-to-air satellite television service operated by the Public Service Broadcaster Prasar Bharati]

    Airtel says that OTT and DD free dish players provide the same kind of content that direct-to-home television providers supply (DTH) with no commensurate obligations of any kind. Treating these two services differently, Airtel says, “is against the basic premise of TRAI’s endeavour to have a balanced regulatory framework.” It says that in the broadcasting pyramid, OTTs form the top and DD Free Dish forms the bottom, with DTH players in the middle getting squeezed. It states that the convergence of technologies without a convergence of regulation is leading to challenges.

    Challenges posed by lack of converged regulations for different broadcasting services:

    According to Airtel, the lack of converged regulations leads to three key issues—

    • Violation of the “Must Provide” Principle: TRAI introduced the principle of Must Provide, which ensures that broadcasters supply content to all distribution platforms on a non-discriminatory basis. This principle, however, becomes inapplicable in cases where the same broadcast content as shown on registered platforms is being carried over broadband.
    • Violation of MIB downlinking policy: As per the policy, the broadcasters are under obligation to provide services only through registered distribution platform operators (DPOs, including DTH providers). By providing broadcast content through unregistered digital distribution platforms like OTTs, the broadcasters are violating the downlinking policy. This needs to be addressed by the Ministry of Information and Broadcasting (MIB).
    • Violation of MIB’s cross-holding restriction: The MIB restricts broadcasting and/or cable network companies from holding or owning more than 20% of the total paid-up equity in a licensed DTH company during the licensing period. Similarly, a DTH licensee is not permitted to hold or own more than 20% of the total paid-up equity in any broadcasting and/or cable network company. This restriction doesn’t exist for other platforms. “Some stakeholders have unfettered ownership and control of all parts of the broadband and broadcasting value chain including content and carriage, which creates monopolies,” Airtel argues. As such, the same restriction should be introduced in broadcasting regulations irrespective of the underlying technology being employed. “Vertical integration between content and distribution platforms ultimately adversely impacts the plurality of content for consumers, increases the possibility of exclusive content deals, discriminatory distribution & arbitrary pricing for the same content and increases entry barriers for the competitors,” it states, in support of cross-holding restrictions.

    To converge regulation or to keep separate:

    Besides the convergence of regulation across different broadcasting service providers, Airtel also argues for the convergence of regulation between telecom and broadcasting. It believes that TRAI should transition into a converged regulator for both sectors. The company has argued the same in the past as well.

    Airtel is notably not the only company to argue that the regulations for telecom and broadcasting services should be converged. Vodafone Idea (Vi) argues the same in its submission, stating that convergence has been enunciated as one of the key strategies of the government under the National Digital Communications Policy 2018. It also emphasizes that the government should rely on the principle of “same service, same rules” to cater to converged services, which incidentally is exactly what telcos argued in a TRAI consultation focused on communication platforms like WhatsApp and Telegram last year.

    Reliance Jio, however, disagrees with converged regulations for the two sectors. It points out that unlike telecom services, which allow for two-way communication, broadcasting is one-way communication. It highlights that broadcasting services have been left out of the Telecom Act, 2023, and expects the same exclusion for telecom services in the broadcast bill. “Any overlap of these two distinct services (i.e. Telecommunication and Broadcasting) may create confusion and issues relating to a level playing field. This in turn may lead to hesitation amongst the investors in investing in these sectors,” the company says.

    Framing the National Broadcasting Policy:

    With respect to ease of doing business, Airtel argues that the policy should follow a light-touch regulatory regime, similar to the one applied in the telecom sector. It also emphasizes the need for regulatory forbearance. Forbearance refers to the regulator’s decision to forgo direct intervention if the operation of market forces can achieve desired outcomes and there is no evidence of market failure.

    Given the rapidly changing technological environment within the broadcast sector as well as the diverse stakeholders operating in it, Airtel argues that the policy should only set out principles, which can be used later to develop rules and guidelines. Prescriptive measures will prevent the policy from being future-proof, the company states. The company suggests that the broadcast policy should incorporate regulatory impact analysis (RIA). This, it says, will provide a structured and systematic approach to evaluating the potential impacts of proposed regulations. It will also promote transparency, and build trust with stakeholders and the public.

    How should online gaming be promoted while protecting the public?

    Need for clarifications on IT Rules, 2021:

    Vi mentions that while the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 set out regulations for gaming, there are certain sections of these rules that require clarification, especially with respect to telco offerings—

    • The current definition of online real money gaming should clarify that online games that do not involve any deposit by the user and do not involve any winnings (cash/kind) are not covered under the ambit of Online Gaming Rules.
    • A deposit to play a game bundle should not qualify as a deposit: Telcos allow their subscribers to go on their app and play games offered by their gaming partners (through back-end integration between the telco’s app and the gaming platform). As this subscription is not locked to any game and subscribers are not paying with the objective of winning, the payment cannot be treated as a deposit and cannot be used to qualify something as a real money game.
    • Use of in-game currency earned through fulfilling certain game objectives should not be used to qualify a game as an online game.
    • The scope of an online gaming intermediary should be limited to the one who develops and offers the game along with all its terms and conditions. Those hosting the game on their app should not qualify as online gaming intermediaries. As such, telcos providing access to a gaming partner’s platform should not be considered online gaming intermediaries.

    Similarly, Airtel underscores that the presence of money doesn’t fundamentally change the game’s nature or the elements of skill and chance within it. Therefore, the requirement for Self-Regulatory Body (SRB) verification (which is required for all online real money games) should only apply when an online game involving real money lacks any element of skill.

    Airtel also seeks a clarification on the GST (goods and services tax) for online real money games between July 2017 and September 2023, and whether it would be based on the prior tax regime or the new one. It must be noted here that in July last year, the Ministry of Finance, announced the GST liability for online real money games from 18% to 28%. “If show cause notices and demands are enforced, the online gaming sector which is still at a nascent stage will collapse, causing significant consequences such as job losses, reduced foreign direct investments (FDIs), and lower tax revenues,” the company says.

    Protecting the public from the negative effects of such games:

    Vi says that the Intermediary Rules, Consumer Protection Act, and Rules and the Advertising Standards Council of India (ASCI) rules/guidelines have safeguards to protect the public. This includes dealing with user complaints about negative experiences, removal of content that promotes harmful behavior, etc.

    Airtel argues that amended IT Rules, 2021 should be implemented at the earliest to regulate the online gaming industry effectively. Given the sector’s potential to create employment and foster tech innovation, Airtel argues that there is a need for broader consultation on gaming regulations. “Such consultations would provide stakeholders with the opportunity to address concerns related to taxation, fraud management, KYC procedures, and other regulatory aspects while fostering an environment conducive to the industry’s sustainable growth,” it explains.

    No need for any effort to promote regional content on OTTs:

    Jio explains that as per an Ernst and Young (EY) report, the volume of regional content surpassed that of Hindi language content in 2023 for the first time. “This indicates that currently, there is no urgent need for regulatory intervention since market forces are effectively meeting the audience’s requirements,” the company says.

    Don’t allow free spectrum access to Direct to Mobile (D2M) services:

    Jio points out that there has been a lot of discussion recently around D2M broadcasting services to facilitate the transmission of video content directly to people’s mobile phones without an internet connection. All such discussion has been around assigning free spectrum for D2M, with the proponents of the technology claiming that it would help decongest mobile networks. “We believe that the same is not true as cellular mobile networks have sufficient capacities to handle the video traffic. In fact, majority of the traffic being handled by telecom networks (i.e. around 80%) is video traffic only,” Jio says. It adds that after the launch of 5G, telcos have built sufficient capacity on their networks to handle video traffic even in worst-case scenarios (when all subscribers are simultaneously watching video content in good quality).

    It argues that allowing D2M access to free spectrum would lead to a non-level playing field between D2M services and the services provided by telcos. One must note here that last year during a consultation on the regulation of OTT communication services, telcos like Airtel had argued that their network “is getting choked with ever-increasing high bandwidth usage by services such as HD videos, [and] movie streaming.” However, based on what Jio is saying, the companies do indeed have the capacity to support video streaming, which points to a major flaw in the argument that was previously being made about network usage fees.

    Vi also highlights issues with free spectrum access by D2M providers. It explains that the frequency band proposed to be used by D2M providers (the 526-582 MHz band) is crucial for IMT (International Mobile Telecommunications) and that any allocation of spectrum for D2M within this band will adversely affect IMT deployment.

    Content regulations must not be placed on distributors:

    Airtel points out that the imposition of content-related obligations on distribution platforms under the IT Rules (Intermediary Guidelines Digital Media Ethics Code) 2021, “raises pertinent questions regarding roles and responsibilities.” It points out that content distribution platforms do not participate in classifying, rating or regulating content and as such lack involvement in content determination. Their role is limited to redistributing content through contractual agreements with OTT platforms. One must note here that Airtel Xtreme (Airtel’s OTT aggregator service) would fall within the category of a distribution platform as explained above.

    Airtel points to the three-tiered regulatory structure under the IT Rules, 2021, and says that requiring distribution platforms to establish or join self-regulatory bodies would “duplicate regulatory efforts”. It could also lead to a situation where different self-regulatory bodies come up with conflicting decisions about a piece of content, “leading to confusion and inefficiency in addressing content-related grievances.” As such, Airtel says that the roles and responsibilities of all stakeholders should be delineated.

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