This week we have a guest post from Mr. Bui Viet Duc, legal assistant at Indochine Counsel. He’s spent some time researching this issue and has prepared the following memo for release.

Guidance on TV over-the-top (OTT) services under the new draft decree

Decree No. 06/2016/ND-CP on management, supply and utilization of radio and television services in Vietnam, dated 18 January 2016 (“Decree 06”), is one of the policies ensuring that many types of Internet service may be transmitted, including cross-border transmissions, to internet users in Vietnam. Modifying Decree 06, the Ministry of Information and Communications (the “MOIC”) issued a draft decree for public consultation between July and September 2018 (“Draft Decree”).

The Draft Decree makes a very fundamental change in scope of television and radio services when it steps up to the new level by covering OTT services with on-demand content such as pictures, sounds and content that can be produced and communicated locally or overseas via the internet. The proposed extension is disproportionate and can restrain the growth of Vietnam’s digital economy. The Draft Decree also imposes various obligations to online service providers since a list of licensing requirements must be obtained prior to the provision of paid OTT TV services, which apply for foreign and domestic companies alike. Consequences of this licensing requirement would be establishing a local presence in Vietnam and submission of on-demand content of such services along with relevant copyright agreements.

The Draft Decree regulates that built-in advertisements cannot be installed on free foreign programs in paid OTT TV services rather that the advertisements (if any) must originate from Vietnam. A press agency that is licensed to edit content will be in charge of the installment of advertisements and will be responsible for the duration and content thereof.

Taking into account the content to be introduced by OTT services, more requirements have been set out to ensure the quality and/or compliance of on-demand services on the internet. In particular, on-demand content must be edited and translated, applied for foreign content, by news agencies having license in accordance with Vietnamese law, while the content provided on a number of programs must be completely translated into Vietnamese.

Furthermore, the proportion of foreign content for broadcast in every domestic channel with regard to on-demand internet TV services is to be not more than 30% of the total programming on that channel. The draft also requires certain sports programs having social impact to be rebroadcast over free broadcasting services for certain periods. And, for some cases, the MOIC will decide the number of domestic and foreign program channels based on development plan targets for the broadcasting sector stipulated in the broadcasting development plan.

On the whole, this draft paper presents legal problems of regulating OTT services by the MOIC and government agencies when they face new media in the regulatory environment. They made an attempt to close such above gaps and brought the OTT services back to the same playground as the other media platform by amending Decree 06 with traditional broadcasting regulations including licensing requirements to OTT services, which possibly distract Vietnam in its forward journey into the digital economy era.

It is predicted that if passed, the Draft Decree might set precedent for other countries to impose reciprocal regulations on online services, the impact of which would be to create difficulties for Vietnamese digital content and information technology providers to export or expand internationally and Vietnamese businesses trying to expand beyond Vietnam’s borders.