Are we all OTTs? Dangers of regulating an undefined concept

Event report

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Mr Gonzalo Navarro, Executive Director, Asociación Latinoamericana de Internet, began the session by introducing the speakers and the rules of engagement for the workshop. He explained that the concept of Over-The-Top (OTT) services is an open typology with no clear nor precise definition, and said that governments in some countries have started to regulate Internet-based OTTs. In many instances this involves applying outdated regulations, perhaps applicable to telecommunication companies or broadcasters, which stifles innovation.

Mr Vint Cerf, Chief Internet Evangelist, Google, explained the historical development of the end-to-end principle, which he has come to view as a core architectural invariant of the Internet. Cerf said the Internet was designed as a ‘neutral platform for packet switching on top of which anything which could be packetized could be transmitted’ and received by another party. As the volume of data exchanged has grown in size, the Internet has held up because the edges of the network have increased in capacity. As a result, Cerf said the ‘notion of OTT is simply a misunderstanding of the design of this system, as everything is an application on top of this underlying high-speed packet switch network.’ It is therefore unnecessary to regulate all of the applications that exist today and those which will be invented in the future.

Alexander Riobó, Latin America Regulatory Director, Telefónica, said that many regulations affecting the telecommunications sector made sense when they were created because most were public utility providers who were privatised and became monopolies. However, as new technologies have emerged, new providers have entered the market, and the need for regulation to promote competition is of less relevance. In the digital ecosystem, Riobó said it is the ‘contents and applications that we use every day and that make our lives easier’ which we value, but there won’t be applications and content in the future if there are not networks and network operators to exchange and transmit data.

Mr Robert Pepper, Global Connectivity and Technology Policy Lead, Facebook, said there is a symbiotic relationship between application providers and the underlying network providers which transmit data. Pepper said that online content drives demand for broadband networks, and without these networks, there would be no connectivity. In any market where there is more competition, there is less need to regulate, but there is often a lag in the time between said competition occurring and a review of those regulations, which may result in deregulation. Thirty years ago, Pepper said, the assumption which underlaid telecommunications regulation was that the product was voice, and the metric by which you built it, billed for it, paid for it, and regulated it, was the minute. Today, Pepper said, the product is connectivity and the metric is bandwidth, which is time, traffic, distance, and location-sensitive. As a result, Pepper said trying to impose old regulatory pricing structures on flat new IP broadband networks does not make sense, nor does trying to regulate the applications that ride on top of those networks as though they were inextricably linked to transmission, as was the case in the old days of telephony.

Ms Natasha Jackson, Head of Public Policy and Consumer Affairs, GSMA, said that in order to understand OTTs one must begin by looking at their role within the digital ecosystem. She said there are a multitude of actors, business models, and commercial relationships with digital platforms at the centre. These platforms are ‘essentially combinations of hardware, the apps, the content, and the communications coming together to provide services to users’ which in turn enable new commercial models. Because companies are competing all the time by creating new products and services, this disruptive innovation is testing the boundaries of our existing laws and regulations, which were designed for a different era. The challenge for regulation, Jackson said, is not to apply rigid definitions but to ‘put into place new regulatory frameworks that support investment and innovation in order to deliver huge benefits for consumers and for businesses.’

Mr Brett Solomon, Executive Director, Access Now, spoke of there being billions of users still to come online, and of the importance that they be able to experience the Internet in the same manner that existing users can. He said the challenge with OTT is how to ensure a human rights framework is in place across all jurisdictions, to support the users’ right to be able to think, publish, and express themselves.

Mr Bertrand de la Chapelle, Executive Director, Internet and Jurisdiction, said the fundamental challenge which needs to be addressed is how to collectively finance the infrastructure required to cope with increased bandwidth needs, while maintaining universal access to said services. He said that the distinction between actors was blurring when some of the largest OTTs or applications are developing their own infrastructure, and most telecom operators are going into the content arena. 

Mr Eric Loeb, Vice President, International External and Regulatory Affairs, AT&T, said that the term ‘OTT’ has a limited shelf life and is a concept that has arisen because of dramatic changes in technology and commercial models. He said that the operations and practices of companies in all industries organically converge, and the challenge for policy makers is how to encourage innovation and investment that brings out the best for everyone, without unnecessarily stifling them, based on historic models and frameworks.

Mr Raúl Echeberría, Vice President of Global Engagement, Internet Society said that there are many things ‘over’ the Internet, but these are not the things spoken of when the term ‘OTT’ is uttered. He said that when users use Internet-enabled applications, they say, ‘I am using the Internet’, and not ‘I am over the Internet.’ He said that OTT is sometimes used as a synonym for things that are replacing, substituting, or changing traditional business models, but cautioned that policy makers should not regulate simply to protect economic interests from disruption. ‘If we do that and protect the taxis from Uber and the hotels from Airbnb,’ Echeberría said, ‘we kill innovation.’ He said that he would like to see improvements in some OTTs, by looking to encourage interoperability and improvements in personal data protection, but he ‘does not know if regulation is enforceable, useful, or the right way to deal with that.’

by Ayden Férdeline, Internet Society UK