Neutral Net: A gate-pass to the global society

The Asian Age, September 19, 2015

By Pradeep S Mehta

Noam Chomsky, a famous leftist American philosopher, once said: “The Internet could be a very positive step towards education, organisation and participation in a meaningful society.” This stands true in the current scenario, where the Internet has moulded the world into a global society, truncated distances and enabled thought sharing beyond boundaries. Also acting as an educational hub, the Internet has helped providing solutions in seconds, which earlier used to take hours of search in libraries. There is no denying that the Internet has now turned into what Bill Gates once referred as “town square for the global village”.

The increased uptake of this resource has acted as breeding ground for a number of innovative applications, known as over the top (OTT) applications. From communicating to shopping or from finding doctors to buying groceries, there are applications for everything. Despite the high utility, these applications are now strongly being considered for regulations. The telecom operators claim that these applications impact their revenues by providing substitutes to the services they offer, such as calling (Viber, Skype, WhatsApp), messaging (WhatsApp, Line, Hike), etc. The debate on Net neutrality, as it is called, has developed into a duel for the ownership cake. Why do we need owners for this wonderful realm? The question in itself is baffling.

The Net neutrality storm had spread across the world long back, but like many other countries, our country too played a silent spectator. The Net neutrality principle simply states that there should be no blocking, no throttling and no paid prioritisation of any lawful content on the Internet. The US Federal Communication Commission (FCC) embracing Net neutrality is persuading other countries to decide their positions. Though the FCC ruling was immediately challenged by the operators on grounds of their profitability, the US appeals court refused to grant a stay on the ruling and the final hearing is scheduled later this year. The European Union has also enforced Net neutrality and so telecom operators there are not allowed to block or throttle any content, application or services on the Internet.

However, unlike the FCC’s strict ruling, the EU’s version is milder and allows zero-rating (paid prioritisation) agreements. Other countries which have enacted complete Net neutrality as a law are Chile, The Netherlands and Brazil.Given so many examples across the globe, India has alternatives aplenty to choose from, but the choice has to be rather sagacious. To gauge the stakeholders’ opinion, the Telecom Regulatory Authority of India (Trai) released a consultation paper in March 2015, posing 20 questions on Net neutrality. The questions, primarily on regulation of OTTs and non-discrimination of Internet services by operators, attracted over a million comments. A majority rooted for core Net neutrality, but Trai is still undecided on the most awaited ruling.

The department of telecommunications (DoT) had also commissioned a high-level committee on Net neutrality. Though the recommendation of this committee pitches for a neutral Internet, it has proposed regulations on Voice over Internet Protocol (VoIP) OTTs, offering domestic voice communication and thus allowing a window for paid prioritisation. It suggests that arbitrages on regulations and pricing exist between operators and substitute service providing OTTs, which needs to be removed to provide a level-playing field for both.
It’s worth mentioning that operators are regulated on call tariff through interconnect charges, tariff ceiling for roaming calls, etc. Such regulations won’t ever allow genuine competition between conventional calling and VoIP calling. This calls for further deliberation on the “solution”. While only domestic VoIP services are recommended for regulations, other services are not. It would be interesting to see how a line would be drawn among OTTs, since many offer multiple services packed in one.

The DoT committee has failed to address other issues such as data privacy. With OTTs holding huge consumer data, the issue of protecting consumers’ sensitive data is worth a mention. However, the regulator reviewing tariff plans on zero-rating before being launched in public is an optimistic step for consumer protection.

OTTs play a part in promoting Internet adoption and regulating OTTs on tariff may make the free services a paid service. This might impact the pace of OTT-driven Internet adoption. With the Internet penetration standing below 20 per cent, regulations might land a knockout punch on India’s digital inclusion mission.

A hurdle to Net neutrality also comes from the existing revenue models of Internet-based services. From Internet search to prioritising data packets on quality of service, the entire network is governed by payments made by companies to avail preferential treatment. The power of choice should, in any case, rest with consumers and not the operators. Consumer demands vary according to individual preferences. For example, some consumers might settle for an average Internet speed, while others might not. Thus, differential services/paid prioritisation may be provided only on “consumer demand”, but it should be ensured that other services are not negatively impacted.

The operators highlight the need of capital expenditure for infrastructure and argue that OTTs, that impact their revenues, hinder their ability to invest on infrastructure. It is undeniable fact that OTTs rely on Internet service, and it’s equally their responsibility to let Internet breath for long. OTTs should lend a hand on building the foundation, for which the question that needs answer is “how”.

Thus, the Internet we use is nowhere close to being perfectly neutral. We still have to safeguard it from the probable clutches of the prospective owners. OTTs help getting new consumers on-board and also propel data revenues. So operators should work out on economies of scale strategies rather than cribbing over the competition brought in by innovation. If regulations seem the only solution, they shouldn’t be based on tagging prices on these apps. The idea is to promote the Internet, not to break it. The need is to make it robust, seamless and for everyone.

The writers work for CUTS International.

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