The double standard in regulation for managed services and OTT

[Commentary] “Over the Top” (OTT) technologies cannot exist without a network. While the providers of these services invest in servers and data centers for their own operations, their operating model does not include the cost of the underlying infrastructure investment, namely the expensive last mile infrastructure.

As OTTs grow their user base and revenue, it becomes increasingly clear that there’s a double standard in regulation. Why should antidiscrimination and data protections rules apply only to telecommunications and cable companies when an increasing part of communication s goes on in unregulated platforms? Indeed placing rules on some part of the value chain but not others is itself discriminatory.

Additionally it grows increasingly untenable for European governments to allow profitable OTTs not to pay tax, especially when the telco sector is laying off 10% of its workforce for lack of profitability. The same antidiscrimination and taxation rules should be applied across the board. Fortunately some of these discrepancies may be righted through the process to update America’s Communication Act, as the siloes created in 1934 to apply to different communications networks are now obsolete. Fair competition and a level playing field means that all competitors need to play by the same rules.

[Layton studies Internet economics at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark]