Takshashila Policy Advisory - Regulatory Mechanism for Over-The-Top (OTT) Communication Services and Selective Banning of OTT Services

Bharath Reddy & Rijesh Panicker

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A. Issues Related to Regulatory Mechanism for OTT Communication Services

Over-The-Top (OTT) communication services differ significantly from traditional telecom services, and treating them similarly could harm consumer welfare. These services operate globally, and subjecting them to diverse regulations across different regions could hinder their growth and adaptability.

Far from substituting traditional services leading to a loss of revenue, OTT communication services create additional demand for data, which generates revenue for telecom service providers. Furthermore, intense market competition among platforms like WhatsApp, Skype, and Signal leads to continual innovation and improved services. Imposing stringent licensing or regulations on OTT communication services poses challenges in complying with diverse regulations globally, inhibiting innovation and consolidation among players and reducing consumer welfare.

OTT communication platforms are agile and can quickly adapt to market needs, and over-regulation might hinder their ability to serve consumers effectively.

B. Issues Related to Selective Banning of OTT Services

Selective banning of OTT services in certain regions poses both technical and practical challenges. Users can easily sidestep these bans through VPNs and proxies, with some inadvertently opting for malicious services that jeopardise their safety. Banning a popular OTT service can lead to the rise of new platforms, potentially lacking robust content moderation, which can amplify the spread of harmful content. Over time, threatened bans could push users towards P2P or decentralised platforms, which are harder to regulate.

OTT services, beyond entertainment, are vital for communication, especially during emergencies. By banning them, we risk disrupting crucial information flow during crises. Although curbing fake news or malicious communication is essential, bans might push users to less regulated and potentially riskier alternatives. Moreover, such bans could inflict economic hardships, especially on small businesses reliant on these platforms. Constant bans might deter users from embracing OTT platforms, leading to digital exclusion and missed growth opportunities.

In essence, while the intention to deter the communications of malicious actors is valid, selective bans might produce more challenges than solutions.