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Lok Sabha TV: Net Neutrality Report

Lok Sabha TV: Net Neutrality Report



Recently DOT released its report on net neutrality, which at large advocates strong support and commitment to protect net neutrality in interest of innovation and telecom infrastructure. It stresses that government should identify international best practices in this field and apply them selectively with suitable modifications in Indian Context. Net neutrality is defined by different interest groups and governments in different ways which suit their interest. Indian definition of Net Neutrality must be drawn in contextual ambit that it is aspiring to turn itself into ‘Digital India’. So it becomes imperative that quality, affordable and universal internet services are aspired.

Despite strong advocacy for net neutrality, a few suggestions has irked different interest groups. Most hotly contested suggestions are –

  1. Regulate domestic VOIP calling.

‘Voice over Internet Protocol’ allows consumer to make calls using internet data. Such services are being offered by applications such as Skype, Viber, Hike etc. Telecom service providers claim that they are losing regular voice call revenues due to growing popularity of VOIP calling. Few years back they were getting just 5% of total revenues from data (internet) services, now it has increased to 17%. In developed countries revenue for data services is as high as 95%. It will register stellar growth in future in case net neutrality is ensured.

DOT panel recommended that only domestic VOIP calling be regulated, as it is beyond scope of Indian administration to regulate international data. But experts claim that it is impossible to distinguish between two without violating privacy laws. It can be done only by deep data packet inspection and use of data sniffers. This will lead to surveillance of private data.

Rationale behind suggestion to regulate domestic VOIP calling is that regular telecom calling is already regulated due to wide array of concerns, security being one of them. Unregulated VOIP calling draws unfair advantage in such scenario.

The report goes on to note that the current pace of VoIP has the potential of disrupting existing domestic telecom revenue models and that this may decelerate the pace of telecom infrastructure expansion. The report adds that this would disrupt investment in telecom sector which is much needed in order to increase broadband reach, speeds, bandwidth capacity, etc.

  1. Treatment of zero-rating :Services should be open to all users & content providers

Zero rating plans attempts to create such alliances between content providers (like Facebook, flipkart etc) and telecom service providers, so that latter gives preferential to content of former. This is being perceived as biggest assault on Net Neutrality.

For instance, if Flipkart, Facebook and Wikipedia enter into an agreement with Airtel (300 million subscriber base) under which former three will pay some charges to Airtel and in return Airtel will allow its subscribers free access to their content. Overtime, many people with limited use will stop buying regular internet plans, relying on these three website. Given that Airtel’s subscriber base is huge; this can seriously impact macro level competition in adverse ways. Users can be forced to buy expensive products from flipkart as they don’t have access to amazon. By this, entry for newcomers in market will be halted because of restrictions. Implications get even more serious when there is a vision of Digital India under which internet will be instrumental in providing all sorts of public services.

Above arguments are being hotly contested by telecom service providers by claiming that such plans helps in extended reach of internet services to rural and urban poor as they are available without any extra top up. Argument holds weight, but it can’t be denied that long term ill effects matter more than short term benefits.

Consequently, DOT suggests that any such plan should be open for all content providers and there should be same terms and conditions for all. This arrangement is being named as ‘gatekeeping’ role by service providers and regulatory intervention is suggested to discourage it. They criticized Airtel’s Zero rating plan for its violation of net neutrality.

  1. Not to regulate over-the-top (OTT) messaging services

DOT suggests that messaging services provided by apps such as Viber, Whatsapp etc. should be encouraged and there is no need to regulate them.

Regulators have to interfere in free markets in cases where there is market failure and monopolies are being established. Regulator checks monopolistic powers and ensures that there is space for other players to compete. There may be a viable scenario that alliance between content providers may be allowed if they give only ‘limited’ preferential treatment to certain content. This may be decided by regulator on case to case basis.

Recent report is just a part of big process. Report of Telecom Regulatory Authority of India and A Parliamentary Committee on the subject is yet to come.