The seemingly inevitable net neutrality
Definitions
To understand the vagaries of an issue with such far-reaching repercussions as this, it is important to develop a conceptual understanding of what the terms ‘net neutrality’ and ‘over-the-top services’ mean. According to Tim Wu, the American jurist popularly considered to have coined the term, net neutrality-
“decrees that internet service providers must treat all traffic equally, and let users do what they wished with their bandwidth.”<<3>>
According to TRAI’s definition, NN can be construed to mean that -
“.. TSPs must treat all internet traffic on an equal basis, no matter its type or origin of content or means used to transmit packets. All points in a network should be able to connect to all other
points in the network and service providers should be able to deliver traffic from one point to another seamlessly, without any differentiation on speed, access or price.”<<1>>
In essence, this implies that once a user pays for the use of bandwidth, it should be theirs to do with as they choose, and that the network company should not dictate the terms of the user’s engagement with the net. As for OTTs, in the TRAI’s own words -
“The term over-the-top (OTT) refers to applications and services which are accessible over the internet and ride on operators’ networks offering internet access services e.g. social networks, search engines, amateur video aggregation sites etc.”<<2>>
What is the significance of NN in India?
Net neutrality here has emerged as an issue on mobile networks rather than their fixed line counterparts. Given the internet’s rate of growth in India - the number of mobile internet users is set to reach a total of 223 million by June 2015
What, then, is the importance of the internet, and why has it inspired such agitation about its management? The answer lies in the web’s genesis: The internet was imagined as a public resource and therefore created in the image of a vast “commons”, a repository of human knowledge and information; in playing this role successfully, the net has transformed the nature and exchange of ideas, and become a vital, ever-expanding organism more critical to free speech in our status quo than any other medium of communication. To block, modulate or circumvent access to the internet at this stage in its evolution would negate the very rationale of the net’s existence.
The question must be asked however –is blocking off or circumscribing access to the internet in any manner the government’s intention in this case? While it has been alleged that the TRAI’s consultation paper is but a part of a lobbying exercise by big telcos to promote their interests, a closer examination of the issue reveals that circumstances as they exist in India do not support such a standard of service as NN envisages without adequate bandwidth and the network outages and congestion that are part of the Indian internet experience. Already with the rapid growth in users, an unprecedented load is placed on existing networks - in such a case, it makes little sense to forward time insensitive data at the same priority as real-time voice or video traffic. In both the Indian scenario and in a global context, this skewed view of how
internet works and the call for net neutrality by disregarding concerns for efficiency can lead to impeding the development of infrastructure.
Arguments Against and For Regulation
Another point of discussion in the current debate is centred on the loss of revenue caused to telecommunication companies due to the rapidly increasing use of OTT services such as popular instant messaging applications
Before taking any steps towards the regulation of OTT services however, those in charge must consider their rationale in the prevailing context, and that of the internet in the broader scheme of things: it is to connect as efficiently as possible, the users of these facilities, creating a network to enable communication and exchange of information in a manner unprecedented in history, and with enormous repercussions to the exchange and cultivation of ideas; a neutral internet supports free speech, democratic participation, and empowers citizens. By facilitating permission‐free innovation at the edges of the network, it ensures robust competition amongst service providers. Then there is of course harnessing the benefits of the net for education, health care, and the society at large - the power of a tool with the capacity to penetrate geo-political borders as the web does, is integral to the development process.
As stated above, broadband connectivity in India is very low at present, and there is a huge need
No debate can be complete without affording both sides a chance to present their cases, and it cannot be denied that those advocating for regulation of the net and its supplementary services, have some legitimate reasons to back their demands. To begin with, there is the service providers’ right to ease congestion caused by heavy bandwidth consumption services
optimized in a network organization in which quality of service differentiation is acceptable as long as it serves a reasonable purpose and discrimination is avoided. In determining which behaviours are tolerable and which are not, regulators should be looking at not whether the practice is unfair, but rather at the potential harms, such as the extortion of rents, tying and bundling, etc.
Users can select intelligently the mobile products and services suited to their budget; if users feel zero rated programs are discriminatory, they can simply choose not to buy them – it is not uncommon to see operators failing due to lack of consumer interest. It is obvious that telecom companies should not be allowed to engage in illegal discriminatory activity, but some commentators have pointed out that neutrality proponents are displaying a troubling pattern of wanting to eschew existing law
In what could be another important point in favour of regulation, the TRAI paper mentions OTT service providers fall under the Indian telecom licensing regime whereas TSPs operate under a separate regime wherein voice and messaging services can be offered only after obtaining a license. TSPs have claimed that many OTT services are similar in nature to what the TSPs have been catering to, but remain unencumbered by the licensing agreements that the TSPs have to abide by while providing those services. In doing this, OTT service providers essentially piggyback over the infrastructure provided by the TSPs, which enables them to offer similar services at drastically lower costs. As a result, there is the absence of a level playing ground for the two competing products same consumer services segment. Thus, it would be worthwhile to reorganize the services provided by OTT service providers in terms of the consumer services segment they cater to, rather than blindly classifying them as data services.
Comparative Neutrality Regimes
In February this year, the Federal Communications Commission
The debate has taken a different shape in the European Union, with strong restrictions on privacy and traffic management. The current policy proposal is one that essentially prohibits traffic management on the public Internet. In 2013, the Commission introduced a legislative proposal “Connected Continent: Building a Telecoms Single Market” – Intended to end discriminatory blocking and throttling and deliver effective net neutrality.<<1>><<2>>
However, it is how things unfold in the developing world may have a bigger impact on the future of the Internet. Worldwide, the number of smart phones is projected to double from 1.5 billion last year to three billion in 2017. Most of those 1.5 billion new phones—and new Internet access—will be in the developing world. India, despite its low consumer penetration,
will have an important role to play in this expansion, and it will be interesting to see how the government faces up to the challenge of reconciling the varied interests of service providers and consumers.
In a major indication of the shift in internet user demographics, countries with developing economies have been amongst the first to bring in net neutrality law. Chile, recognized as one of the more advanced telecom markets in Latin America, outlawed zero rating services in 2014, banning operators from offering free access to social media websites as part of a mobile data package and including provisions for parental controls, privacy, virus protection, and network security. In this course, it became the first Latin-American country to implement net neutrality laws. Nearby Brazil, too, passed a legislation called the “Internet Bill of Rights” last year, which makes equal access to internet mandatory - ISPs are barred from restricting content and from charging more for data-heavy services - and protects the privacy of the Brazilian internet users.
In India, which has a market similar to Brazil and Chile’s in terms of penetration and affordability of services, the concept of net neutrality has no basis in law: the TRAI has made attempts at establishing neutrality rules several times before this but to no avail as yet. However, there exist several legislations, including the Indian Penal Code, the Code of Criminal Procedure, the Indian Telegraph Act, the Indian Telegraph Rules, and the Information Technology Act and its supplementary rules, that can be used to govern the internet. Also, all telecom services available in the country are subject to regulatory provisions, if not in particular, then at the very least in generic legislation.
The author is a Managing Partner at Hammurabi & Solomon.
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