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The regulatory positions of OTT - a global view

The regulatory positions of OTT - a global view

  • United Kingdom
  • Technology, Media and Telecoms - Disruptive Technology
  • Technology, Media and Telecoms - Telecoms

18-07-2019

Part 4 of 4

Compared to the rest of the world, OTT regulation is fairly advanced in Europe and subject to a completely different approach in Africa and Middle East. It seems that in this part of the world, OTT services are commonly banned to protect local services (i.e. OTT communication services or dominant companies). Obviously Europe itself is setting potential global standards with the General Data Protection Regulation (“GDPR”) addressing data regulations and is at the lead on platform assessment.

In summary from our initial research it appears that OTT are basically not regulated in the most of the jurisdictions in the world and the rapid growth of OTT services has raised a number of national policy issues relating to regulatory imbalances between OTT Providers and Network Carriers. The regulatory imbalances need further and in-depth investigation and analysis at various levels by different department of the relevant authorities in relevant jurisdictions.

Established Network Carriers (and in particular the operators of telecommunications networks) argue that existing regulation causes competitive disadvantages for Network Carriers who are subject to sector-specific regulation (in particular regarding customer protection and data protection) while providers of OTT communications services (which are increasingly replacing "traditional" telecommunications services) are free from the same regulatory burdens.

For the purpose of this Note we have only looked at the applicable regulations/ norms in the EU, the UK, the US, and Australia. However, we are happy to provide an in depth study on the regulatory platforms covering additional jurisdictions.

The EU

According to [The Body of European Regulators for Electronic Communications which regulates electronic communications was established by Regulation (EC) No 1211/2009 of the European Parliament and of the Council of 25 November 2009, as part of the Telecom Reform package (“BEREC”)] "anything provided over the open Internet" can constitute an OTT service, including e.g., voice over IP (VoIP) services, video streaming platforms, messenger platforms and services, e-commerce platforms, search engines, music streaming platforms, cloud services, and social networks. Based on their characteristics and function, OTT-0 and OTT-1 services can be further classified as OTT communications services while OTT-2 services constitute OTT content services. At the EU level, the regulatory treatment of OTT services with respect to the framework for electronic communications services is currently being discussed and re-evaluated.

BEREC therefore considers that the review of the regulation network is an opportunity to examine the validity of the definitions of electronic communications and OTT services.

BEREC notes that OTT services that do not potentially compete with electronic communication services, such as e-commerce and search engines (labelled OTT-2 services) are also difficult to define, and that issues relating to these services are not currently subject to overview from national regulatory authorities.

BEREC considers that while these services are not regulated, the impact of these services on communications operators may nonetheless need to be taken into account by regulators when assessing the market.

BEREC also notes that partnerships between Network Carriers and OTT Providers are likely to increase. However BEREC considers that it is still too soon to conclude on the effect of these partnerships on competition and consumers in the electronic communication services markets.

BEREC draft strategy for 2018-2020, contains an overview of major market and technological development, which it considers pose new challenges and questions for regulators in areas such as the end user experience, competition, investment as well as in how the digital dividend is distributed among consumers and the different players in the digital ecosystem.

The UK

The Office of Communications, commonly known as Ofcom, is the UK government-approved regulatory and competition authority for the broadcasting, telecommunications and postal industries of the United Kingdom.

Ofcom has wide-ranging powers across the television, radio, telecoms and postal sectors. It has a statutory duty to represent the interests of citizens and consumers by promoting competition and protecting the public from harmful or offensive material.[2][3]

Some of the main areas Ofcom presides over are licensing, research, codes and policies, complaints, competition and protecting the radio spectrum from abuse (e.g. pirate radio stations).

In February 2016, the UK and a number of other EU countries published a joint letter setting out their priorities for the European Commission's review of the regulatory framework for “electronic communications networks”. These governments' view was that the legislative framework must support the deployment of electronic communications services and networks that meet the needs of users, particularly in terms of quality across all aspects of network performance.

The said framework should continue to adhere to the principle of technological neutrality and consumer protection should remain a priority for the revised framework. The joint letter also stresses the importance of the Commission taking a consistent approach across the whole Digital Single Market Strategy to electronic communications services and OTT services.

In summary at this stage there is a lack of regulation on OTT service provision in the UK.

The US

The Federal Communications Commission (“FCC”) is the federal agency responsible for implementing and enforcing the USA’s communications law and regulations, including OTT services, an independent agency created to regulate interstate communications by radio, television, wire, satellite, and cable.

The FCC has exercised significant regulatory powers in respect of (i) radio, (ii) television and (iii) telephone providers. In 2015, the commission extended its reach to include broadband internet service providers by classifying the companies as common carriers under Title II of the Communications Act.

[The FCC publicly states has worked to bring specific VoIP services, applications, and capabilities under its control. The FCC, regulates VoIP in five (5) categories namely:

911 Services: Providers of interconnected VoIP services which allow users generally to make calls to and receive calls from the regular network- do 911 service obligations (FCC, 2015)

Portability: Interconnected VoIP providers and telephone companies are required to comply with Local Number Portability (LNP) rules

Calling Records: Interconnected VoIP providers are limited in the use of customer propriety network information such as telephone calling records, and are also required to protect it from disclosure (FCC, 2015);

Universal Service: Interconnected VoIP providers are required to contribute to the Universal Service Fund

Accessibility: Interconnected VoIP providers must contribute to the Telecommunications Relay Service Fund used to support the provision of telecommunications services to persons with speech or hearing disabilities (FCC, 2015)].

As it appears it seems that the USA is the only territory in which there is specific video OTT service regulation.

Australia

The Australian Communications and Media Authority (“ACMA”) is an Australian Government statutory authority within the Communications portfolio. ACMA is responsible for ensuring media and communications works for all Australians. It does this through various legislation, regulations, standards and codes of practice. ACMA is a converged regulator, created to oversee the convergence of telecommunications, broadcasting, radio communications and the internet.

According to the communications report 2014-2015 issued by ACMA Australians are increasingly using the internet for more of their daily activities. It appears from the Report that “New Australian Communications and Media Authority Research” shows that Australians are increasingly using OTT communications services, including online subscription video services.

Despite the fact that Australians continue to look to OTT services for their communications, the Australian government is yet to regulate this sector.

Briefly saying, similarly to the UK, in Australia, there is a lack of regulation on OTT service provision in Australia. Having said that its worth noting that the Attorney-General's Department speaking before the Joint Committee on Law Enforcement on 14 May 2018 has argued in favour of extending Australia's telecommunications interception laws from telecommunication to OTT providers. However, at this stage the situation remains similar to the UK.

Conclusion

To conclude our initial review of the position indicates that services that may be considered OTT such as music-streaming, voice-calls and messaging are not regulated specifically as OTT services. This does not preclude the possibility that these services are regulated by other means.

Read part 1: What is Over the Top Platform?

Read part 2: What are the potential benefits of OTT?

Read part 3: The challenges and considerations of OTT?

Read part 4: The regulatory positions of OTT - a global view

[1]           Source: BEREC Strategy 2015-2017, Work Programme 2015, Report on Transparency and Comparability of International Roaming Tariffs, First phase report on the implementation of BEREC's wholesale products broadband common positions and BEREC Report on Oligopoly analysis and regulation - Questions to stakeholders. See also BEREC press release.

[2]           Source: https://www.investopedia.com/terms/f/fcc.asp

[3]           Source: https://www.fcc.gov/general/voice-over-internet-protocol-voip

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