Regulating OTTs a risky move: EFF

This article was authored by Dylan Bushell-Embling, and was originally posted on telecomasia.net.

Efforts by multiple Asian nations to regulate OTT communications and online streaming services could violate net neutrality and have even more insidious effects, according to the Electronic Frontier Foundation.

The digital rights group has called on developing nations in the region and elsewhere to develop an international framework for regulating OTTs, a move being considered by the ITU.

In a blog post, EFF Asia Policy Fellow Jyoti Panday noted that Indonesia, Thailand and India are considering a regulatory framework for OTT providers.

The Indonesian government has introduced sweeping proposed regulations that would make it mandatory for offshore businesses including OTT communications service providers, social networks andsearch engines to establish a “permanent establishment” in Indonesia.

Transnational companies would also need to have an agreement with an Indonesian opertaor and use local IP numbers and payment gateways for their services.

“Considering current trade negotiations aimed at outlawing data localization, these operational obligations for OTTs cement the view that the Indonesian government is attempting to create a local territorial nexus for online transactions and activities, allowing them to be taxed and controlled,” he said.
“The draft MCI regulations also require online platforms to create a “censor mechanism” [sic] to filter and block ‘negative’ content including terrorism, pornography and radical propaganda. While e-commerce and marketplace platforms enjoy immunity from content related obligations in Indonesia, the new regulation effectively dismantles this safe harbor framework.”

The proposed legislation would also allow the government to take sanctions against infringers by ordering operators to limit the bandwidth of companies violating the rules. This would likely violate net neutrality.

Likewise in Thailand, the NBTC has said it will create a level playing field between OTT providers and operators, with suggestions including introducing bandwidth fees for online content providers and a new tax and licensing framework for OTT providers. This would also make OTT providers liable for illegal content published on their platforms.

“Allegedly, the efforts to regulate OTT providers are driven by the dramatic rise in the revenues being generated by them…[but] efforts to create a ‘level playing field’ could also be interpreted as measures to empower the regulator to more easily monitor and censor content that the government is finding difficult to regulate,” Panday said.

“The Thai government has been unsuccessfully trying to pressure to online intermediaries to remove allegedly illegal speech including proposing shutting down sites for non-compliance with takedown requests. The proposals to regulate OTTs can be seen as a backhanded move to give the regulator the authority to demand the removal of content the military-run government considers illegal without waiting for a court order.”

India’s Department of Telecom has also been considering proposals to require OTT providers to act under a licensing-style regulatory framework, driven by requests from operators, but has not yet indicated whether such regulation will be forthcoming.

Panday also noted that the rules and liability impose on OTT services impact freedom of expression, net neutrality, consumer rights and innovation. As a result, the ITU is exploring developing a global multilateral framework for OTT services and applications.

“In seeking to create a ‘level playing field’ between OTT providers, and legacy media and network providers, governments may end up introducing rigid frameworks that stymie innovation and competition or cause irreversible consumer harms,” Panday said.

“There may be various valid public interest reasons to regulate OTTs such as to ensure their compliance with privacy standards and net neutrality rules. But such regulations should be made on a targeted basis. Imposing a strict and unyielding regulatory framework based on telecommunications regulation and licensing goes further than this, and risks becoming a vehicle to protect legacy telcos and to enact content censorship.”

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