OTT PLATFORMS ARE NOT COVERED BY TRAI

14th October, 2023 - 6:41 am Categories: Media & Entertainment Law 0 Comments

Introduction

The Telecom Regulatory Authority of India or TRAI was established through Section 3 of the Telecom Regulatory Authority of India Act of 1997 to promote clarity and fairness in the telecom service sector. TRAI aims to mainly control tariffs, issue regulations, adjudicate disputes, dispose appeals and protect the interest of the service providers as well as the consumers and deal with issues put before it, all with the motive of making India a leading giant in the telecom market. It provides an atmosphere for exploring the full potential of telecommunications in the country. The head office of TRAI is located in New Delhi, its members are appointed by the Central Government and should have significant knowledge regarding the telecommunications sector.

Role and importance of TDSAT

Through an ordinance on January 20, 2000 the TRAI Act was amended and the Telecommunications Dispute Settlement and Appellate Tribunal or TDSAT was set up. TDSAT adjudicate disputes between:

• A licensor and a licensee;
• Two or more service providers;
• A service provider and a group of consumers;
• To hear and dispose of appeals against any direction, decision or order of TRAI.

The TDSAT has the same powers as a Civil Court. However, Civil Courts do not have any say in the matters of TDSAT. According to TDSAT, it has control over telecom, broadcasting, information technology, airport tariff matters previously under TRAI and other similar matters. In technological matters, it has appellate jurisdiction whereas it can exercise original and appellate jurisdiction in other areas.

Petition by AIDCF

Over-the-top or OTT platforms have been on the rise for the past five years as a popular means of entertainment. “Disney+Hotstar” or “Hotstar” is one of the most subscribed OTT platforms in India and is owned by Star Sports. It has the exclusive rights to many sporting events around the globe and is also offering to stream the Cricket World Cup 2023 live to its mobile users.

[Image  Sources: Shutterstock]

Recently, All India Digital Cable Federation (AIDCF) filed a petition with TDSAT to put a stop to Hotstar from livestreaming the current edition of the Cricket World Cup since it led to its customers demanding free services as well. The tribunal issued a notice for a reply from Star Sports by October 3. AIDCF also contended that the pay TV customers will switch to OTT platforms, which is adversarial to other service providers. Star Sports is even broadcasting the tournament on its network, which has to be paid for by the cable operators. Thus, a question rose whether this act by Star Sports was contradictory to the regulatory framework of TRAI.

TDSAT Ruling

The tribunal stated that Over The Top (OTT) streaming platforms do not fall under the jurisdiction of the Telecom Regulatory Authority of India (TRAI). OTT platforms can be regulated only by the Information Technology Rules of 2021. They are outside the purview of the TRAI Act as they do not need any permission or license from the Union Government. The AIDCF had filed for an interim prayer seeking restraint on Star Sports for letting its users watch the matches free of charge.

Implications for the OTT Industry

The recent TDSAT decision that OTT services with names like Disney+ Hotstar are not subject to the TRAI Act has significant implications for the Indian OTT business. This ruling sets up the legal structure for OTT platforms, confirming that they are distinct from conventional television networks and need not obtain licences from the Central Government. This transparency is meant to foster OTT innovation and investment.

This decision creates a clear legal framework for OTT service providers, allowing them to operate in accordance with the Information Technology Act of 2000 and the 2021 rules. This legal clarity benefits consumers as well, as it allows them to access free content on sites like Disney+ Hotstar. Overall, this decision is consistent with the trend of offering free access to major athletic events and content, expanding consumer choice and accessibility in the digital world.

Comparison with TV Channels

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) made distinctions to Over-the-Top (OTT) platforms and traditional TV networks in a decision. The regulatory system that controls these two forms of material transmission demonstrates this distinction:

• Regulatory Framework:

1. OTT Services: The Information Technology Rules, 2021 govern OTT services, which do not require licences or approvals from the central government or regulatory bodies such as TRAI. They operate independently via the internet.
2. Traditional TV Channels: Traditional TV channels, on the other hand, are governed by TRAI and other relevant bodies. They must get permissions and authorisation before transmitting data over cable or satellite networks.

• Content Delivery:

1. OTT Services: OTT platforms deliver on-demand content, allowing users to watch what they want, when they want. The internet is used to distribute content to a wide range of devices.
2. Traditional TV Channels: TV channels follow a strict schedule and broadcast content at predetermined times through the airwaves, cable, or satellite. Viewers have limited influence on the programming that airs on television channels.

• Monetization and advertising:

1. OTT Services: OTT platforms provide a number of monetization options, such as ad-supported content and ad-free subscription options. Advertisers on OTT platforms can target their adverts using user data.
2. Traditional TV networks: Advertising is the principal source of revenue for traditional TV networks. Advertisements are weaved into shows and run on a predetermined schedule.

• Devices for access and viewing:

1. OTT Services: OTT platforms distribute content to a variety of internet-connected devices, such as smartphones, tablets, smart TVs, and desktop computers.
2. Traditional TV Channels: Traditional TV channel viewers sometimes require both a television set and a cable or satellite subscription.

• Regulatory Obstacles:

1. OTT Services: Authorisation, licencing, jurisdiction, competition regulation, Quality of Service (QoS), non-discriminatory access, protection, and privacy are all problems that OTT services raise. They may not have the same responsibilities as conventional services.
2. Traditional TV Channels: Traditional TV channels are governed by more mature legal structures, such as licensing and QoS compliance.

Why do OTT platforms not require a special licence from the Central Government?

• OTT platforms are digital in nature, delivering material digitally over the internet, separating them from traditional broadcasting or telecommunication services.
• These platforms do not control or operate the underlying network infrastructure; instead, they rely on ISPs for content delivery.
• India’s existing regulatory framework i.e. telecom and broadcasting rules were created largely for traditional carriers, making them less suited to OTT platforms.
• Since many OTT networks have a global footprint and operate in numerous countries, obtaining licences in each country can be difficult.
• Self-regulatory methods have been implemented by the industry, such as the IAMAI’s Code of Best Practises, which establishes content rules and standards.
• In contrast to traditional telecom carriers, OTT services do not contribute directly to network infrastructure expenditures.

The Central Government affirmed that internet platforms in general involving OTT platforms, are not required to seek Ministry licences, and that the Ministry does not monitor material on these platforms.While OTT services do not now require specific licences to operate, concerns about content control and certification may continue in the future.

TDSAT’s Impact on OTT Platforms in India

The ruling of the TDSAT clearly defines the limitations and duties of OTT platforms in the Indian media ecosystem. It answers a long-standing demand for clarification among business participants and regulators alike. Another important component of the verdict is that OTT platforms do not require Central Government licences. By recognising that OTT platforms have separate legal obligations, the ruling contributes to India’s broadcasting and entertainment sector’s rapid digital revolution. The findings highlight the need of legislative adaptability in response to the dynamic media landscape, allowing India’s OTT business to thrive and promoting investments in content development and technology.

Significantly, the lack of onerous licencing regulations for OTT platforms provides them with greater flexibility and enables them to adapt better to user wants and preferences. Finally, the TDSAT results foster a climate favourable to the sustained development of India’s OTT business, bolstering its critical position in the digital resurgence of the media and entertainment sectors.

Conclusion

In summary, recent Telecom Disputes Settlement and Appellate Tribunal (TDSAT) judgements have significantly altered how Over-The-Top (OTT) services are regulated in India. They’ve stated that OTT platforms function under the IT Rules of 2021, not the TRAI Act, clearly outlining their positions in the Indian media environment. Both the sector and regulators gain from this clarity. The verdicts further emphasise that OTT services do not require Central Government licences, supporting competition and innovation. This adaptive regulatory strategy is in line with worldwide trends in digital content distribution, enabling the OTT industry to invest in content and technology and, as a result, strengthening India’s media and entertainment sector in the digital era.

Author: Mudit Sood and Priyanka Kumari, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

References

https://tdsat.gov.in/admin/introduction/uploads/seminar_events/Mr%20Tejvir%20Bhatia.pdf

https://www.thehindu.com/news/national/netflix-amazon-prime-other-ott-platforms-now-under-govt-regulation/article33072710.ece

https://dot.gov.in/act-rules-content/2426

https://tdsat.gov.in/admin/introduction/uploads/seminar_events/Mr%20Tejvir%20Bhatia.pdf

https://www.republicworld.com/business-news/india-business/digital-cable-regulator-seeks-tdsat-intervention-against-free-cricket-streaming-articleshow.html

https://www.legalserviceindia.com/legal/article-8260-regulation-code-for-ott-content.html

https://www.trai.gov.in/about-us/history

https://economictimes.indiatimes.com/?back=1

https://www.moneycontrol.com/news/trends/legal/otts-outside-the-purview-of-trai-act-tdsat-says-in-plea-against-hotstar-11489691.html

https://cis-india.org/telecom/resources/trai-act-1997