Net neutrality: All sides of the debate examined

While both sides have a point to make, regulator TRAI has a few options left. 

Published: 12th July 2017 08:35 PM  |   Last Updated: 12th July 2017 08:35 PM   |  A+A-

Image for representational purpose only.

What is net neutrality?

The term ‘net neutrality’ was coined by Columbia University professor TimWu back in 2003. It works on the premise that all data on the internet should be treated equally and that there should be no differential pricing for content, site or application.

Internet connectivity is provided through telephone lines, coaxial, fiber optic cables and wireless dishes installed on rooftops. In India, Airtel, Tata DoCoMo, BSNL and Reliance are the big boys. Text, voice and video are transmitted on the internet through packets. These data packets travel through a maze of inter-connected networks before reaching the intended destination.

When you apply for an internet connection, you agree to pay the ISP a monthly or yearly tariff depending on the bandwidth and data download. Besides bandwidth and data download, there is no restriction whatsoever on the use of applications, be it YouTube, Netflix, WhatsApp or Skype. These are called OTT or over-the-top applications.

So what’s the issue?

The genesis of the net neutrality debate can be traced back to 2007 when Comcast Corporation, a Philadelphia-based internet service provider, came in the line of fire. Many subscribers complained that Comcast was restricting bandwidth and interfering with peer-to-peer networking applications. The intrusion was challenged by advocacy groups through a complaint filed with the Federal Communications Commission (FCC), the US equivalent of the Telecom Regulatory Authority of India (TRAI). Comcast was ticked off for denying users access to lawful internet content and net neutrality got a shot in the arm.

Are Indian ISPs against net neutrality too?

In India, net neutrality became an issue in December 2014 when Airtel announced additional charges for Over the Top (OTT) applications like Skype, Viber and WhatsApp. The move outraged tech-savvy users across the nation.

Bharti Airtel triggered the net neutrality debate by announcing the launch of its Airtel Zero scheme, which would allow customers to access certain mobile applications ‘free of charge’ while the company would recover the cost it incurred from companies owning apps.

The announcement triggered an outcry by internet activists, which forced the online retail giant Flipkart, which had joined hands with Airtel, to pull out of Airtel Zero.

Reliance too courted criticism by joining Facebook’s Free Basics. Free Basics sought to provide users access to select websites ‘free of charge’.

Do the ISPs have a case?

Let’s first look at the key stakeholders in the net neutrality debate: telecom operators, the government of India represented by TRAI, application providers and internet users. Economic reforms initiated in the early 1990s brought about significant changes and one of the beneficiaries was the telecom sector. Basic mobile and telephone services were thrown open to private participation.

The internet service providers (ISPs) invested significant amounts of money in building expensive infrastructure. There has to be some means to recover the cost, either from website owners or users. With OTT applications like Skype and WhatsApp stealing the thunder and rival telecom companies undercutting each other, ISPs are seeing red everywhere. They want a piece of the cake too and are looking at packaging their services at a cost. Telcos don’t want to be dumb pipes that agnostically transfer data. They want to increase their revenues from transmitting data.

Why should ISP investment matter to us?

One of the biggest critics of net neutrality is Ajit Pai, President Trump’s adviser. He says ISPs are not investing in critical infrastructure such as connections to low-income or rural households because net neutrality rules prevent them from making money from their investments. This is typically a politically right-wing argument. But let’s see if there is merit in his argument.

Take the way internet has grown in India. We are one of the fastest growing economies in the world and the internet user base is widening by the minute. A conservative estimate puts the number of internet users in India somewhere between 450-470 million. But internet penetration in India is still only 31 per cent, of which urban India accounts for 60 per cent. While rural demand is catching up, there is still a lot of territory to cover. And that needs a lot of investment by telecom companies.

At stake is a rural population that can’t be burdened with app charges. At the same time, the telecom ministry would like to see private service providers in the pink of health in a free market economy. The limitations of BSNL, MTNL in a pan-India scenario are no longer a secret.

Where does the Indian government stand on this?

Union minister for information technology Ravi Shankar Prasad says the issue of net neutrality is still being debated and the government would take a structured view of it. “Internet is the finest creation of the human mind. It must be given as a privilege, not as a monopoly of the rich. All stakeholders will be consulted and a decision will be taken,” he says.

The truth is that there is no legal framework on net neutrality in India although initially, the Telecom Regulatory Authority of India (TRAI), which regulates telecommunications in the country, showed a tilt towards net neutrality.

Back in 2016, TRAI told telecom service providers that they cannot charge discriminatory tariffs for data services on the basis of content. It blocked Facebook’s Free Basics app, saying that it offered undue advantages to certain websites.

“No service provider shall offer or charge discriminatory tariffs for data services on the basis of content,” the regulator ruled in its Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016.  It said the prohibition was necessary to keep the internet open and non-discriminatory. In other words, the regulator ruled in favour of net neutrality.

In January 2017, TRAI released a fresh consultation paper on net neutrality. It said, “It is important to ensure that (some) techniques are not used by service providers in a discriminatory manner.”

What’s the argument in support of net neutrality?

There are many who don’t buy the telcos’ argument and their sense of grievance that while even small startups make millions through valuations, they themselves are not getting returns proportionate to their investments. Supporters of net neutrality argue that the mandate of telecom companies is limited to providing internet services. In the shifting sands of technology, making profits all the time is a mirage. Yesterday it was the ISPs. Today it is the day of the apps. Applications riding on internet transport have revolutionized communications as evidenced by Skype, Viber and WhatsApp.

Champions of net neutrality say the internet is an open platform for innovation and creativity. It has especially benefitted those who have invested intellectual capital like startups and small companies. Exercising control over access will dampen entrepreneurial spirit and nip in the bud future success stories. Further, they argue, as more and more applications are featured on the internet, bigger pipes would be needed, which would result in more revenues for service providers. The absence of net neutrality will definitely benefit the telcos while at the same time harming the market by unleashing monopolistic tendencies.

Rajan S Mathews, director-general of the Cellular Operators Association of India (COAI), believes that consumers must have the freedom to benefit from the power of the internet in the way they would wish to, including the choice of platform, device and technology.

What’s the way forward, then?

While both sides have a point to make, regulator TRAI has a few options left. It would do well to incentivize the ISPs by lowering taxes and duty on telecom equipment while allowing them to raise bandwidth charges. The telco should use network traffic management systems to optimally use bandwidth resources. Finally, there can be a monitoring mechanism that ensures that telcos do away with discriminatory practices. It is time the government comes out with a clear-cut policy on net neutrality.

The author is a soft skills trainer with a technology background. He can be reached at dayshanks@yahoo.com and udayvoice@linkedin

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