Should OTT Players Pay the TSPs?

The argument that infrastructure costs are only borne by telecom operators and not internet platforms is not true.

Firstly, it should be noted that about 99.5% of all Internet interconnection is done with neither (a) payment or (b) contract, on a “Bill and Keep” basis. Also it bears to be considered that, “the request for the data flow usually stems not from the content provider but from the telco or retail Internet access provider’s own customer and therefore the Internet platform and services providers have helped TSPs create a new revenue stream rather than take revenues away from them.

Secondly, the argument that infrastructure costs are only borne by telecom operators and not internet platforms is not true. Internet platforms which form substantial data traffic on networks have a strong incentive to build. And that exist when a neutral network is provided to them as explained in the Analysis Mason Report titled as, “Overview of recent changes in the IP interconnection ecosystem” which states that, “As a result of the volume of traffic that they deliver, and the associated cost of delivering that traffic, content providers have a strong incentive to build out their networks in order to reduce their transit requirements and deliver the traffic directly to the ISP network, if not from within the ISP’s network.

As a result of the increasing monetization of content, providers also have the means to engage in such network build-outs. This is in addition to the infrastructure costs of Internet content and services companies which invest substantial money towards hosting and data charges while pairing their websites.

Finally, any such payment by OTTs for use of TSPs network over and above data charges paid by consumers also has the ability to fragment the internet.

Today, anyone can start a new service and make it available to Internet users all over the world, without having to negotiate first with every TSP; this is one of the features of the Internet that has made it a boon to innovation and economic growth. Imposition of additional access charges will stifle innovation (startups) in the country.