Friday, April 17, 2015

Net Neutrality – my replies to the TRAI questions

Please refer to

Consultation Paper on Regulatory Framework for Over-the-top (OTT) services, Consultation Paper No: 2/2015, Telecom Regulatory Authority of India (TRAI), 27th March, 2015

I have responded only to some of those questions; the ones that are important to me. My answer to Question 9: “What are your views on net neutrality in the Indian context?” deals with an issue that has not got public attention. There is a lot of hype about the number of cell phones in India exceeding 900 million and the fact that a significant fraction of them are potentially capable of accessing the mobile Internet. My answer deals with unfair charging that holds back progress in taking the Internet to the bulk of India.

Question 1: Is it too early to establish a regulatory framework for Over The Top (OTT) services? 

A clear recognition has to exist that providing communication capacity is a different business from creating and distributing content and providing services using communications. If we recognize the difference, we could establish a regulatory framework for OTT services as well. The fundamental point is that giving Telecom Service Providers (TSPs) any control over charging users of communication capacity differently, or otherwise treating them differently, is wrong. These are different industries and each should be protected from the other.

Question 3:  Is the growth of OTT impacting the traditional revenue stream of TSPs?
Yes; the growth has impacted on them very positively! A TRAI publication     Telecom Sector in India: A Decadal Profile, 2012, Telecom Regulatory    Authority of India, 2012, 

has pointed out that "Internet users in India expanded at a significantly high CAGR of 32.27 percent during the period 2000–10". The Telecom Service Providers have not been losing money due to all this growth! The telecom sector has received on average 8.2 per cent of total inward FDI between 2000–01 and 2010–11, indicating that the sector has been very attractive to investors. The telecom sector pays handsomely every year in telecom spectrum auctions to buy capacity to dish out mobile Internet services.  

The telecom sector cannot complain that the OTT sector makes profits. That would be like the taxi trade complaining that the restaurants make a bigger profit on feeding customers than they themselves make in carrying them to the restaurants. 

The OTTs have not been free of regulation. For instance, voice over IP is explicitly provided for under the telecom rules, under certain restrictions. Clearly, authorities all over the world have recognized that new technologies may be very competitive in relation to older technologies. So, what we do? Should we handicap new technologies till they cannot compete? If video over IP is less expensive than video over circuit switching, should we kill it before it takes off?  

No monopoly in OTT services is supported by regulation. On the other hand the number of TSPs in a given circle seems to be fairly tightly controlled by regulation. I cannot find a third TSP who can give me Internet connectivity over a landline to my place in the heart of Bangalore.

Question 4: Should the OTT players pay for use of the TSPs network over and above data charges paid by consumers?

Can a taxi operator demand that restaurants be required to pay them over and above what the customers pay to be taken to restaurants?

Question 7: How should the OTT players offering app services ensure security, safety and privacy of the consumer?

Yes. In particular, they should not compel users to share the details of their contacts (colleagues, friends and relatives) stored on phones/computers. They should ask for no more information than is strictly required to provide them the service their app is designed for. If they support taxi/auto services, they should take responsibility in ensuring that only licensed and identity-verified drivers are sent to customer premises. They cannot merely depend upon conduct certificates given by police!

They should innovate to use technology to improve security. They should ensure that all communication to the driver takes place only through a cell phone number which has been registered with the app service provider. At present I have seen the service provider send me one cell number as the driver’s number and some driver calls up using another cell phone! He explains that he carries two phones and that the other phone has run out of charge!

Question 9: What are your views on net-neutrality in the Indian context?

The most glaring violation of net neutrality in the Indian context is the punitive pricing of Internet access by cell phone service providers to beginning users and other small volume users. I pay roughly Rs 250 per month for 1 GB capacity per month over the cellular network, through a data plan. A student had asked me to get her an article on rice from the Internet for her. The article which met the needs was 6 MB in size as it had some photographs. I downloaded it (using my landline connection) and printed it for her. What about other articles she might need? Should I demonstrate to her how she could use her cell phone and access small articles which she could at least read on the screen? What would this cost her? I found that it would cost her (at that time) 3 paise per 10 KB over a 3G connection as she has no data plan; she just cannot afford a data plan. A bit of arithmetic told me that the rate for was twelve times the rate I was paying. I do not know what argument about Internet technology would justify this overcharging by a factor of 12! Is this neutrality between poor users and middle class users?

There could be a 50% or even 100% charge extra for those who do not have a data plan, but 1100% extra?

I would suggest it should be mandatory for any cellular wireless service provider to offer a 100 MB per month data plan at a price that is not exploitative. I would consider Rs 25 per month a fair charge for this service. At least the Government’s own cellular service provider should offer such a pack.

Question 12: Who should bear the network upgradation costs?

Should restaurants pay the taxi operators to replace vehicles when they become too old to run?


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