As many as 128 start-ups including Zerodha’s Nithin Kamath, Paytm’s Vijay Shekhar Sharma, PhonePe’s Sameer Nigam have written to the Telecom Regulatory Authority of India (TRAI) opposing telecom operators’ push for regulating OTT services.

As part of the consultation process that looks into regulating internet companies, telecom operators are seeking a fee from OTT companies to operate on their data networks. Telcos argue that at a time when monetisation of networks becomes even harder, and internet platforms like WhatsApp directly replace the function of a telecom operator – internet firms need to pay operators a fee in order to use their network. 

Start-ups warn that such a model would erode openness of the internet. “Thus, allowing a TSP which is at one edge of the internet to charge differently for data that it does not process alone, could compromise the entire architecture of the internet itself. Were other TSPs across multiple tiers allowed to do this, then the openness of the internet as we know, would be altered,” the founders noted in the letter. 

Telcos’ push for OTT regulation conflicts net neutrality principles

They said that the suggested form of regulatory framework will be in direct contravention of net neutrality principles. Where telecom service providers (TSPs) essentially have the power to tilt the playing field to favour one website/application/service or another, will inevitably lead to discrimination, non-level playing field, entry barriers, and increased compliance burden, they added.

Start-ups are not the only ones to speak against the telcos’ demands. Recently, big tech firms such as Meta and Google also commented against TRAI’s move to regulate OTT’s or introduce frameworks like selective banning. Broadband India Forum, the industry association for American tech giants said that OTTs are adequately regulated under the existing IT Act, 2000, and other associated acts and rules.

The start-up founders also raised concerns over the regulator’s attempts to selectively ban apps. They cited reasons before the regulator as to why they were principally against bringing such services under the same or similar regulatory framework as TSPs.