The Telecom Regulatory Authority of India (TRAI) recently released its recommendations on net neutrality, bringing its long-drawn consultation on the subject to a close. The principle of non-discriminatory treatment of content is at the core of TRAI’s proposed framework. It suggests that an internet service provider (ISP) should not be allowed to practise any form of discrimination on the basis of users, content, devices and protocols for facilitating internet access. Users should be able to access all websites at the same speed and at the same cost.
“Telecom companies should not be allowed to control the content people access or create fast lanes for prioritising content delivery for higher-paying customers,” stated R.S. Sharma, chairman, TRAI, while releasing the recommendations.
TRAI has always endorsed the idea of open and free internet access. Earlier, in 2016, it had slammed Facebook’s plans to offer free access in India, but only to limited company-curated content. The Airtel Zero platform also met with the same fate. TRAI’s regulations on the Prohibition of Discriminatory Tariffs for Data Services, announced in February 2016, prohibited service providers from directly or indirectly charging users discriminatory tariffs based on the content/applications accessed by them. The recent recommendations further reinforce the vision of keeping the internet open and non-discriminatory.
Interestingly, TRAI’s recommendations come at a time when the US has announced the repealing of the Open Internet Order passed in 2015, and replacing it with the new Restoring Internet Freedom Order. The US’s Federal Communications Commission (FCC) is in support of allowing ISPs to explore content prioritisation and new pricing models around it. The FCC’s key concern is that a heavy-handed regulation in this regard may slow down investments in the broadband space. According to the FCC, allowing operators to co-indulge in discriminatory routing and pricing practices will help them earn big revenues and thus encourage them to pump in more funds into broadband infrastructure roll-out. This argument has no factual validity or historical evidence and, as of now, very few takers.
The Indian regulator, on the other hand, believes that the government has sufficient means to bring all Indians under the digital net without letting operators compromise on net neutrality principles. According to Sharma, operators need not give up their role as neutral carriers of the internet, carrying all data without any discrimination. These recommendations will now be deliberated upon by the Department of Telecommunications (DoT), which is in the process of setting up an internal committee to evaluate the same.
Deciphering the recommendations
TRAI has suggested amendments to the existing licences to spell out net neutrality principles. It has allowed operators to engage in traffic management practices as long as they are reasonable and transparent. Content delivery networks (CDNs) and certain specialised services have been kept out of the scope of non-discriminatory treatment. Most internet-of-things (IoT)
services have, however, not been exempted. Further, TRAI has stated that the restrictions under the non-discriminatory principle would not apply to tariffs that are not content dependent. For instance, providing limited free data that enables users to access the entire internet is not prohibited.
Most of TRAI’s recommendations are straightforward and have broad industry concurrence. However, there are a few contentious areas where industry stakeholders remain divided. Some of these are as follows:
- Exemption of CDNs: These networks enable an operator to deliver content within its network without going through the public internet. As a result, they reduce network congestion and free up capacity for non-exempted services to travel through operator networks. As per TRAI’s recommendations, operators cannot offer their users the services of other companies like Facebook on subsidised rates. They can, however, buy limited content from companies like Netflix and host it on their intranets. Operators such as Reliance Jio and Bharti Airtel that offer their own content in terms of movies, music, etc., which is exclusively available on their own networks, are also allowed to exercise differential pricing.
- No blanket exemption for IoT: Only a limited set of IoT services, those that have been identified by DoT, are excluded from the principle of non-discrimination. For example, IoT-based irrigation systems that may not be time sensitive could be governed by net neutrality rules, but autonomous vehicle systems that are heavily dependent on seamless connectivity are “critical” and have been excluded from the purview of these recommendations.
- Establishing a monitoring committee: The recommendations call for the setting up of a multi-stakeholder committee to monitor and assess net neutrality violations. Operators have opposed TRAI’s heavy-handed approach in this regard.
- Regulations for OTT: For all they are worth, the TRAI recommendations remain silent on the regulatory framework for over-the-top (OTT) players such as Skype, Viber and WhatsApp. Operators have been crying foul over the absence of regulations for OTT players, which ride on operators’ networks free of charge. Further, since most of these OTT apps offer free calls and messaging options, operators earn virtually nothing when users use these apps. This is resulting in serious revenue cannibalisation for operators, and their networks are slowly becoming mere dumb pipes. Since operators pay levies in the form of licence fees and spectrum charges, and abide by rules pertaining to quality of service and network security, they want OTT players too to be subjected to similar regulations, given the fact that both of them offer almost the same services. In their defence, OTT players have stated that any move to regulate them would stifle innovation. Besides, consumers subscribe to data packs for using internet services on an operator’s network, which, in some way, compensates for the revenue loss of operators. The regulator has now decided to initiate a separate consultation process to look into the costs and benefits of regulatory intervention in the OTT space. The move is likely to revive the old OTT debate in the industry.
The bigger picture: Impact on Digital India
Today, when the internet serves as a powerful medium for achieving economic growth and eliminating social inequality, imposing restrictions on its access can have far-reaching repercussions on the economy as a whole. For India, the absence of net neutrality will lead to big operators and industry giants enjoying disproportionate power, resulting in a non-level playing field. It will raise the barriers for new and smaller companies looking to enter the internet service segment. The result will be unequal internet access, which could be detrimental to India’s digital vision. The country’s internet penetration remains amongst the lowest in the world’s key telecom markets, with less than half of the population having access to the internet, against 75 per cent in China and over 80 per cent in the US.
According to the Internet and Mobile Association of India, “The TRAI provisions are conducive for nurturing the start-up ecosystem in the country. By preventing larger content/service companies from colluding with ISPs to stonewall emerging services, the TRAI recommendations ensure a level playing field in access, enabling new players to reach out to their target audiences on the same terms as their peers. At the same time, the recognition of special sectors like IoT and CDNs ensures that emerging sectors will get the necessary regulatory cover for developing their services. Tech start-ups in the country are working in the areas of cutting-edge technologies and services. The recommendations give due recognition to the special needs of such services in terms of making exceptions.”
Critics, however, are quick to point out that the industry may be reading too much into TRAI’s recommendations as the actual policy directives may have a very different look and feel. The ball now lies in DoT’s court, which is analysing the regulator’s suggestions, and evaluating their relevance and application in the Indian context. Once accepted (in toto or in part), TRAI’s recommendations, which are backed by solid principles, will clearly pave the way for one of the most stringent policy frameworks on net neutrality in the world.