The broadcasting regulator plans to force foreign over-the-top (OTT) platform providers to register and establish offices in Thailand, which will make them subject to paying corporate income tax.
The measure by the National Broadcasting and Telecommunications Commission (NBTC) is intended to create a level playing field in the industry. While the TV advertising and pay TV industries have long faced tax burdens, OTT platform providers have never paid fees to the state.
"The established local office must be a legal entity," said Col Natee Sukonrat, chairman of the NBTC's broadcasting committee. "It also must have executives who are authorised by their parent firms to issue orders or clarify confusion in any cases initiated by local authorities."
But the regulator has yet to put forward a plan to set a licensing regime for OTT platform providers as it seeks to minimise the impact on providers and not interfere with the creative content business model, Col Natee said Thursday during a meeting with terrestrial digital TV operators on the regulatory framework for OTT services in the country.
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The session was the last one the NBTC had planned after hosting forums with several targeted groups over the past several months.
Kemmatat Paladesh, the president of the Radio and Television Broadcasting Professional Federation, submitted a letter to Col Natee proposing several requirements to be considered by the NBTC.
According to the letter, foreign OTT platform providers must fall under the NBTC's control lists or be registered. They also have to establish operational offices in the country.
Those OTT providers who operate in the country must also abide by Thai laws, the letter continued. The terrestrial digital TV operators who already hold licences from the NBTC do not need to combine their OTT revenue with their existing broadcasting service revenue.
The content produced by digital TV operators should be able to be broadcast over the OTT system without being reapproved by NBTC, the letter said.
"I personally agree with all four requirements, as it is reasonable and will lead to fair competition with proper measures to regulate the OTT business in the country," Col Natee said, adding that the NBTC will not create an additional burden for digital TV operators when it comes to the regulatory development of OTT businesses.
Previously, he had said the NBTC would set regulatory conditions for OTT businesses under an "after the fact" concept or complaint-based regulation in order to guarantee the smallest possible impact.
The complaint-based condition means the NBTC will only investigate or intervene with OTT operations when it gets complaints from related parties or consumers.
OTT business was clearly categorised by the NBTC last month as a TV broadcasting service that does not use frequencies, similar to cable TV and satellite TV services.
Streaming video via OTT platforms only differs from existing cable or satellite TV in the sense that users on OTT can post their content directly to viewers.
"I don't want to create a new regulation exclusively for OTT businesses, because it would need a long process for approval," Col Natee said.
Mr Kemmatat said the proposal to the NBTC is in line with concerns over the effects that OTT is having on the terrestrial digital TV business.
"We will be fine once the NBTC confirms that it will not call for a regulatory fee on OTT revenue," he said. "But for the sake of security, it needs to properly consider the content."
Line Thailand declined to provide any comment, saying it would be better to wait for the official policy position from the government.
Google Thailand and Facebook Singapore were also unable to comment.
An executive from a digital advertising firm who asked not to be named said that foreign OTT companies with a branch or representative office in the country still cannot issue receipts to their customers.
"This is a borderless world where payment transactions can be done abroad," the executive said. "For customers who buy advertising from Facebook, the payment can be settled in Singapore or Ireland."
The practice is similar to that of Google, whose revenue transactions for advertising business in Thailand are settled in Singapore.