Shin-yi Peng (forthcoming 2016), “GATS and the Over-the-Top (OTT) Services—A Legal Outlook”

Journal of World Trade, Volume 50, Issue 1. Kluwer Law International SSCI

GATS and the Over-the-Top (OTT) Services

—A Legal Outlook

Shin-yi Peng*

I. INTRODUCTION......................................................................................................................... 4

II. OVER-THE-TOP SERVICES AND THE (IR)RELEVANCE OF THE GATS ..................... 10

A. OTT VOICE AND MESSAGING SERVICES: ARE THEY NEW SERVICES? ....................................... 10

B. OTT TV SERVICES: SHALL WE CALL THAT BIRD A DUCK? ....................................................... 13

III. THE IMPACT OF OTT SERVICES ON THE TELECOM SECTOR .................................. 16

A. A CASE STUDY OF THE US FCC LEGAL BATTLES ..................................................................... 16

B. GATS TELECOM REFERENCE PAPER AS A GLOBAL VERSION OF “NETWORK NEUTRALITY”? .... 20

C. COMMENTS ON THE LEAKED TISA TEXTS: OPEN NETWORKS ................................................... 25

IV. THE IMPACT OF OTT SERVICES ON THE AUDIOVISUAL SECTOR........................... 32

A. FREE-ZONE OF DOMESTIC REGULATION ................................................................................... 32

B. COMMENTS ON THE LEAKED TISA TEXTS: LOCALIZATION REQUIREMENTS ............................. 34

V. CONCLUDING REMARKS: A LEGAL OUTLOOK............................................................. 39

*
Professor of Law, National Tsing Hua University, currently on secondment as a Commissioner at the
National Communications Commission, Taiwan. Please note that these remarks are made in the
author’s personal capacity and the views expressed in this paper are not intended in any way to represent
the views of the government of Taiwan.

An earlier version of this paper was presented at the “WTO at 20: Multilateral Trading System, Dispute
Settlement and Developing Countries” held by Tsinghua University, Beijing, China on 3-4 July 2015. I
thank Pierre Sauvé, Hamid Mamdouh, Henry Gao, and other participants of the WTO at 20 Conference
for their comments.
1
ABSTRACT:

Over-the-Top (OTT) services refers to content delivery through an Internet platform;

hence, an OTT application is any service that provides a product over the Internet and

bypasses traditional distribution. Examples of OTT services may include chat

applications (e.g., WhatsApp, Line, WeChat) and streaming video services (e.g.,

Netflix, Apple TV). This paper is of the view that, based on the GATS jurisprudence,

it is at least arguable whether OTT voice and messaging services fall under the GATS

definition of Computer and Related Services. This paper also suggests that the OTT

TV, in the case that a Member did not base its “audiovisual services” schedules on the

CPC and makes no reference to CPC codes, should fall under section 2. D. of W/120 as

the use of a different medium to provide a service did not create a new service. In

addition, with respect to the vertical competition between “infrastructure” and

“content”, there is a “disconnection” between traffic and revenue, leading many

operators to block or degrade OTT traffic. This paper stresses the position that any

further action to introduce the concept of “network neutrality” into TiSA should bear

in mind that a proper balance should be struck between developed countries’ trade

interests and developing countries’ development needs. Moreover, with respect to the

horizontal competition between “foreign content” and “domestic content”, local

broadcasters who supplied services within a Member’s jurisdiction are at a significant

disadvantage compared to OTT service suppliers who housed their servers outside the

member’s territory. The recent leak of TiSA negotiating texts on e-commerce, in which

the US advocates the need to ensure that governments not require ICT service suppliers

to use local infrastructure or establish a local presence as a condition of supplying

services, have also caused some concern.