Whither Internet Neutrality in India?

Internet Neutrality or Net Neutrality has been in news from past few months but in India it got the push with the release of Consultation paper on Regulatory Framework for Over-the-top (OTT) services by the Telecom Regulatory Authority of India (TRAI) on 15 March 2015.
The paper deals with proposed changes to the way the data traffic is regulated over the Internet, in other words, it spells out the regulator’s intent to revisit the Principle of Net Neutrality, which has been religiously followed by all the stakeholders of the Internet since it came in vogue in 1990s’.
What is Net Neutrality?
The Principle of Net Neutrality or Internet Neutrality refers to equal treatment of all data over the Internet by the Internet Service Providers (ISPs). The term was coined by Columbia University media law professor Tim Wu in 2003 as an extension of the longstanding concept of a common carrier.
As per the principle, the Governments and ISPs should treat every bit transmitted over the Internet equally, without any option for priority delivery or differential charges on the basis of user (Business or Domestic), content (voice or video or data), platform, application, type of attached equipment or mode of communication.
What triggered present debate over Net Neutrality in India?
Apart from the intended policy shift by the TRAI, following developments in the telecom market led to a nationwide debate over the observance of the principle.
In December 2014, the decision of India’s major telecom Bharati Airtel to charge subscribers extra for using social networking applications like Skype and Viber met with severe criticism which made the company to rethink and stay the implementation. The company argued that by providing communication services, these applications are eating into the company’s revenues.
In February 2015, Reliance Communications offered few selected websites and applications free of cost to its customers in partnership with the internet.org of social networking major Facebook.
On 6 April 2015, Airtel Zero programme was launched, under which the Airtel subscribers can access selected websites and applications, which are registered with the company, free of cost.
The above incidents indicate the intent of the ISPs to build new partnerships with content providers which is antithetical to the principle of Net Neutrality.
What are the arguments in favour of Net Neutrality principle?
The primary benefit accruing from the principle is it has ensured a level playing field in terms of access to the Internet for the content providers whether they are Internet monopolies like Google and Facebook or start-ups in the neighbourhood.
Any compromise by the ISPs in observing the principle is nothing but an unfair business practice, as recently observed by the Chairman of the Competition Commission of India (CCI), since it involves preferential treatment for select websites and applications.
The argument that social networking sites are eating into the revenues of telecoms is absurd because the revenue foregone as estimated by the telecoms is fictitious and not supported by factual evidence.
The violation of the principle will have adverse impact on the start-ups because the Internet giants with surplus funds can pay higher fees to ISPs in order to push their data on the Internet on a priority basis.
In essence, the proponents of the principle argue that principle is a vital component to protect the openness of Internet.
What are the arguments against the Net Neutrality principle?
ISPs argue that it costs billions of dollars for them to purchase spectrum from the government, build Optic Fiber Cable (OFC) networks and other essential infrastructure. Hence, as a legitimate supplier of the Internet services, similar to logistics service provider in the physical world, they should be authorised to impose differential chargers on content providers and consumers on the basis of demands from them to access the Internet on a priority basis.
The ISPs further argue that, the above measure is in the public interest since it acts as an incentive for them to expand and strengthen their networks, which further ensures the much desired last mile connectivity in the country.
The telecoms argue that neutrality towards social networking sites is not maintainable and there is an urgent need to establish a revenue sharing relationship as these applications are generating much revenue by using the infrastructure provided by them.
Some cyber experts argue that, the present practice deny the consumers the choice of availing priority delivery of the desired content. Hence they are ending up paying extra money for faster bandwidth which delivers the irrelevant and desirable content at the same speed.
It is also argued that the principle is not conducive to the growth of start-ups due to the inability of the market to operationalise innovative revenue models based on faster delivery of content.
In essence, the opponents of the principle argue that in an attempt to maintain equitable access to the Internet the regulators have so far chosen the method that makes the internet equitably slow and expensive for all of us which is evident from high data charges and low bandwidth prevalent in the country.
Is there any mid-way?
Instead of revisiting the very basic principle of Net Neutrality because of proliferation of few monopolies like Facebook and Whatsapp, the TRAI can address the problem of revenue foregone directly by regulating the interconnection rates between external networks and Indian networks (since majority of the monopolies are operating from external networks) or by referring the matter to the CCI.
International dimension
In Februay 2015, the Federal Communications Commission of USA classified Internet Services as public utility services which implies that the ISPs are not authorized to violate the Net Neutrality principle.
Europe is trying to correct a 2013 proposal for Net neutrality, in which privileged access was allowed to specialised services.
In 2014, Chile banned zero-rated schemes, akin to Airtel Zero Programme, under which access to social media is given free to telecom subscribers.
Conclusion
Since our country is suffering from the problem of digital divide such as lower penetration of internet in rural areas compared to that of urban areas, it is imperative for the regulator to keep the openness of the Internet intact and fulfill its responsibility in achieving the objectives of Digital India programme.

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