Turf Wars and Definitional Ambiguities: OTT Regulation in India
Saumya Jain, Jyoti Panday / Sep 25, 2024As smartphone adoption surges and wireless broadband becomes increasingly accessible, we're witnessing a major shift in the digital landscape. Internet-based platforms are rapidly overtaking traditional services, from Facebook and WhatsApp challenging conventional SMS and voice calls to streaming giants like Netflix disrupting traditional TV broadcasting. This shift is especially pronounced in developing countries, where the cost benefits of Internet-based communication are particularly attractive.
Over-the-top (OTT) audiovisual content and communication services that provide content over the open Internet directly to users or viewers are not just reshaping industries but are also redefining market economics and posing significant regulatory challenges. Historically, OTT services have not required a license and operated with minimal oversight, but as their influence grows, governments are scrambling to implement new regulations. These new rules often aim to address local taxation, security concerns, and content control, driven in part by the pressure from established telecom companies and broadcasters who are feeling the heat from these disruptive innovations.
The article explores how India is handling the regulation of OTT services, including key decisions about whether OTT platforms should be treated like traditional broadcasters, how they should be defined and categorized, and how to deal with the convergence of different media platforms.
Is OTT Information Technology or Broadcasting?
Currently, OTTs fall under the purview of the Ministry of Electronics and Information Technology (hereafter, MEITY). The Ministry, along with incumbent telecom players, has been attempting to regulate OTT since 2015. These attempts remained inconclusive until the Ministry released its Intermediary Guidelines and Digital Media Ethics Code under the Information Technology Rules, 2021 (hereafter, 2021 IT Rules). The 2021 IT Rules regulate OTT audiovisual services by setting up a self-regulatory three-level grievance redressal mechanism and classification mechanism of content under the notified categories.
The Ministry of Information and Broadcasting (hereafter, MIB) is also attempting to regulate OTTs. In November 2023, the MIB released a draft of the 2023 Broadcasting Services (Regulation) Bill to replace the 1995 Act, which currently governs the broadcasting landscape in India. Supported by traditional broadcasters, MIB aims to regulate OTT as a broadcasting service and bring it under the same ambit as other traditional broadcasting services.
In 2024, the MIB circulated another draft Broadcasting Services (Regulation) Bill 2024 (hereafter, 2024 Broadcasting Bill) with select stakeholders. The 2024 Broadcasting Bill aims to extend the broadcasting regulatory framework of the 2023 Broadcasting Bill to social media intermediaries as well. The 2024 draft bill defines the transmission of “textual programme(s),” such as tweets or blogs, as “broadcasting.” Digital content creators are classified as “Digital News Broadcasters.” The consultation process of the 2024 draft triggered a backlash in India because the Ministry shared it with select stakeholders for consultation and did not make it publicly available for review. After withdrawing the 2024 draft, the Ministry re-opened consultation on the 2023 draft.
The turf war between MEITY and MIB to regulate OTTs has led to a multi-framework approach. Approaching the regulation of OTTs through the 2023 Broadcasting Bill and the 2021 IT Rules places onerous obligations on online service providers and serves no public interest. Not only will it create ambiguity in compliance and accountability for service providers, but it will also make enforcement of regulations difficult. This competition among the ministries in regulating OTTs explains why MIB released a private draft of the 2024 Broadcasting Bill only to select stakeholders.
To promote a transparent and streamlined approach, the government must establish clear jurisdiction between ministries to ensure a level playing field in the market, specifying which ministry will establish the regulatory framework for OTTs. If both ministries are involved, it could impose a heavier regulatory burden on OTTs, potentially causing an imbalance between traditional broadcasters and OTTs.
Definition and Categorization of OTTs
There also exists a notable lack of definitional clarity within MEITY and MIB. On the one hand, MEITY's IT Rules define OTT as “a publisher of online curated content.” On the other hand, MIB's Broadcasting Bill defines OTT as a “Broadcasting Service.”
Other than defining OTT differently, the 2021 IT Rules and 2023 Broadcasting Bill categorize services differently. MIB and MEITYre have considered three different methods of categorization while framing the definition of OTT. One is based on the nature of transmission, such as whether it is linear broadcasting or on-demand. Another method is based on the transmission network, such as cable, satellite, radio, or Internet. The third method is the type of content transmitted, such as news and current affairs and other audio-visual content.
Traditional broadcasters transmit linearly; i.e., they push content to users at a set time. On the other hand, OTTs have been using the pull approach, where the content is curated and made available on demand. However, with evolving technological changes, such distinctions have become irrelevant. A platform like TikTok or Facebook, for example, does both; such OTT services have linear broadcasting through live streaming, on-demand curated content, and user-generated content. Currently, both MIB and MEITY, while defining OTTs, overlook this digital convergence. The 2021 IT Rules only cover the curation service of OTTs, while the 2023 Broadcasting Bill covers only the broadcasting service.
The 2023 Broadcasting Bill focuses on the transmission network while defining OTTs, whereas the 2021 IT Rules primarily focus on the nature of transmission. Furthermore, the 2024 Broadcasting Bill goes beyond network and nature of transmission and defines all online media - websites, social media intermediaries, or any other online service - as OTT. The 2021 IT Rules exclude news and current affairs from its ambit, which is necessary to ensure journalistic freedom. But this distinction was overlooked in the 2023 Broadcasting Bill. However, the withdrawn 2024 draft covered this differentiation.
Both MIB and MEITY are relying on expanding the pre-existing definitions. Definitions and categorization of OTTs are developed within a regulatory debate that did not consider digital convergence. This approach will create obtuse, hard-to-interpret rules that will stifle both innovation and freedom. This will also make it challenging to accommodate new emerging technologies, as digital convergence can render the existing categories obsolete or unhelpful.
Since the passage of the 1996 Telecommunications Act, the flourishing video market in the United States has maintained few legal and regulatory distinctions between OTT, broadcasting, and cable. The U.S. Federal Communications Commission, in its Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, categorizes video distribution entities as multichannel video programming distributors (MVPDs), broadcast television stations, and online video distributors (OVDs).
OTTs in the US that provide video fall within the category of Online Video Distributors (OVD). An OVD is defined as any entity that offers video content using the Internet provided by a person or entity other than the OVD. There have been deliberations regarding broadening the definition of Multichannel Video Programming Distributor (MVPD) to include OVDs within the same framework. Inclusion of an entity in the MVPD group is based on the similarity of the video service provided to the consumer, not on the technology used (e.g., coaxial cable, fiber, spectrum) or the identity of the parent company (e.g., cable operator, telephone company), or any regulatory classification (e.g., cable service, open video system).
The reason why OVDs are not included in MVPDs is because MVPDs, which are not limited to linear broadcasting, provide their own transmission infrastructure. OVDs, on the other hand, do not fully own and operate the Internet distribution path over which they transmit their programming; i.e., they provide service “over the top” OTT of another provider’s infrastructure. But, the U.S. recognizes that they compete in the same market. Broadcasters in the U.S., for example, routinely run their own websites and stream their broadcast content on the Internet.
Although there is ongoing deliberation on these definitions, India can take some lessons on defining services in the Broadcasting Bill from the US by focusing on the market served - not on the technology used, the identity of the parent company, or any regulatory classification based on on-demand vs linear, etc.
Conclusion: Digital Convergence
“OTT platform is not a TV channel.” The Telecom Disputes Settlement & Appellate Tribunal, a body that adjudicates disputes and appeals in the Indian telecom and broadcasting sectors, said this in the context of Star Sports streaming live sports on both its OTT, Disney + Hotstar and through signals of TV channels. The case of Star India and All India Digital Cable Federation (AIDCF) illustrates this distinction and the growing digital convergence.
All India Digital Cable Federation complained that Star Sports is charging the company to broadcast carry Star Sports coverage of sporting events such as cricket, while the broadcast giant is also streaming cricket matches for free on Disney+ Hotstar.
An escalation in competition between traditional broadcasters and OTTs has made it crucial for regulators to recognize the significance of digital convergence. These market players are now operating in both horizontally and vertically integrated markets. Digital convergence now integrates all modes of communication, such as text, audio, video, and images. The digital landscape is far off the traditional distinction in service configurations, such as interactive v/s one-way, push v/s pull, and on-demand v/s real-time.
This has necessitated regulators to consider whether, while defining OTT, these distinctions in services and network categories of the past analog age should be upheld. Currently, these distinctions in categories are reflected in the existing and proposed definitions of OTT by both MIB and MEITY. As long as this distinction persists, the prevailing regulatory frameworks may fail to address emerging technological changes adequately.
The government’s goal should be to make the framework flexible enough to promote innovation and competition in the convergent market. Thus, regulators should establish general rules that facilitate open markets and eliminate artificial barriers across markets and service categories, such as distinctions between linear broadcasting and on-demand services.
In India, the integration of broadcast and information technology has also resulted in the erosion of the traditional boundaries of established ministries - MIB and MEITY. It has led to a conflict of interest between the two ministries and regulatory bodies within these ministries. Consequently, the government should not only evaluate digital convergence in terms of its impact on the market but also address the convergence between the regulatory authorities to avoid ambiguity in compliance.