Economy 12 August 2015

OTT and the Thai Digital Economy

According to the Thai Digital Entertainment Content Federation, the Thai content industry remains fragmented and undersubscribed. In terms of size, Thailand’s over-the-top (OTT) market is relatively small, representing 1% of the total APAC market in 2014, according to IDC. The potential of the Thai digital content nonetheless is considered bright. It is the second largest digital content producer on YouTube, only a close second to Japan, and is one of the largest markets in the region for social media platforms such as Line, Facebook and WhatsApp.

The Thai government has identified the content industry as one of the key sectors to enable innovative services for the growth of its digital economy. Against this backdrop, the recent Asia Internet Symposium (AIS) in Bangkok this month examined how and why the Thai content industry and users can leverage on the emerging OTT platform to unleash the potential of the Internet for socio-economic development.

OTT refers to upstream digital applications or services which ride on the open Internet without the direct involvement of network or Internet service providers. This typically includes content, application and service owners and providers such as Skype (VoIP), Google and Facebook.

The OTT revolution has already arrived with countless number of apps exploding every minute. According to an InMobi report, Asian economies were among the top app markets in the world last year when measured by per capita app downloads.

At the AIS, ISOC European Bureau Director Frederic Donck stated that industry observation by regulators reveal mechanisms to extend market dominance, whether through schemes like zero-rating, data caps or paid prioritisation are being carried out by carriers globally. He added that to ensure a level playing field, governments need to keep up with local and global industry developments, as free market alone does not guarantee fair competition, citing examples of collusion among telecom players in Europe.

Presently, there is a lack of uniformity in policies on over-the-top services. For instance, zero-rating is banned in several Europeans countries, but not in others like the US, where only paid prioritization is outlawed. There too lies the complexity in distinguishing between paid peering (considered acceptable) and paid prioritization (unfavourable practice): in the latter, priority transmission at congested nodes is guaranteed for paying content providers, which to advocates of Net neutrality goes against the core principle of an open Internet.

Some general guidelines and best practices can be drawn from more successful markets. The following for instance are being considered by the European Union:

Traffic management – this is considered part of an ISP’s normal operation, and its aim is to ensure that all users are able to access adequate service especially during peak times. It should (a) remain protocol or application neutral; (b) be transparent; (c) not be used as a tool for anti-competitive behavior; (d) not be used as a substitute for adding capacity to alleviate congestion.

Service –end-users should have the freedom to access and distribute information and content, run applications and use services of their choice. This means that blocking, slowing down, degrading or discriminating against specific content, applications or services is prohibited, except when there is court order, or when there is a need to maintain network integrity and security, combat spam, or minimise network congestion. Consequently, specialised services need to define and publicly disclose their quality of service and any dedicated capacity they have for their customers.

The Internet remains the most disruptive innovation today and it continues to revolutionise and shape the future of its users in meaningful ways. Participants at the AIS concluded that OTT development should be actively encouraged as an avenue for innovation among different sectors in Thailand. In education, for instance the Thai Cyber University’s OTT platform complements the current online learning system—it has reinvented the life-long learning platform and has gone beyond old pedagogic approaches.  Meanwhile, the Thai Animation and Computer Graphics Association (TACGA) and the Muay Thai Association worked together to develop a self-study application on the art of Muay Thai as a way of preserving and learning about the national sport.

Numerous examples suggest that OTTs are an effective platform for open innovation, and in providing an opportunity for everyone to become creators or co-innovators. Technology wise, OTT is at the cusp of its own evolution:  the next generation of Internet/Web communication and telecom technologies, WebRTC by IETF-W3C, RCS/joyn by GSMA and mobile Internet via SoLoMo, all soon to be commercially launched will radically change how we experience the Internet and OTT services. But OTT development also comes with basic requirements:

·      An open, neutral and best effort Internet

·      An Internet protocol (IP) based network

·      Open standards that enable a multimodal platform environment

·      Affordable broadband Internet access

The regulation of OTTs has been heavily debated in many advanced markets and these discussions are now capturing the attention of emerging markets  like India and Indonesia. We believe this will not be last word on OTT nor Net neutrality. Keeping the conversation alive and supporting an open Internet will be key for our future as innovators and users of this global network of networks.

Disclaimer: Viewpoints expressed in this post are those of the author and may or may not reflect official Internet Society positions.

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