Net Neutrality in India: Licensing to Zero-ratings, it is a complicated debate

If you are one of India’s active netizens, it is unlikely that the words Net Neutrality has escaped your daily dose of social media updates and news. The debate, which gained pace on post AIB’s video on the topic and news of the Airtel Zero programme, has seen some of the biggest names in the Internet and media industries give their take on the issue. More importantly, last month India’s telecom regulator TRAI came out with a consultation paper on the growth of Over-the-top (OTT) players like WhatsApp or Skype and is looking at exploring a regulatory framework for these apps.
In essence, Net Neutrality implies that all Internet data pack should be treated equally, that there should be no fast or slow lanes for Internet, or that users should pay differently for accessing some websites. While online activists and even big Internet companies in India like ClearTrip, Flipkart, have come out to support Net Neutrality, the debate isn’t really as simple when it comes to India.
Also read: Cleartrip, media firms commit to Net Neutrality, pull out of Facebook’s Internet.org
For starters, in a country like India Net Neutrality has vast implications, especially for start-ups, many of whom are dependent on the medium for the success of their business. A neutral Internet means a level playing field.
Rishabh Gupta, COO, Housing.com, says, “Net neutrality has played a significant role in keeping the internet a level-playing field, simplifying customer outreach for businesses across industries. Further, the platform has encouraged new age entrepreneurs to bring in innovative business models making technology as an integral part of business; be it banking, mobile payments, e-commerce, real estate, etc.”
Manav Sethi, Group CMO, Askme adds that “any violation of Internet Neutrality can have a serious bearing on effective and fair competition in the market place”.
“We feel it is the government’s responsibility to ensure a level playing field for home grown entrepreneurs and at the same time protect the interests of netizens,” says Sethi.
Where licensing is concerned, Internet activists have also pointed out that this just won’t work. Pranesh Prakash, Policy Director at Centre for Internet and Society in India, says that India just can’t go back to the licensing days.
“OTT players aren’t just your Facebook or Viber, it’s the entire Internet. For instance with WebRTC protocol coming in you can do peer-to-peer chat, video calls on Web browsers. How would TRAI propose to regulate this, there’s no central service. It might not be popular but it is being used by some already.”
VIDEO: AIB explains net neutrality with #SaveTheInternet video, and Bollywood retweets
He says the telecos’ argument about loss revenue due to rise of OTT’s isn’t a legitimate one but adds that instead of going for more regulation TRAI can look to reduce some differential regulations for telecos to make things easier for them.
There’s also a growing belief that TRAI hasn’t acted fairly when it comes to its paper on OTTs. The Internet and Mobile Association of India (IAMAI) has slammed TRAI saying OTTs are already regulated and governed by the IT Act.
A statement issued by IAMAI President Subho Ray said: “It looks like TRAI, in its consultation paper, has copy-pasted from submissions of telcos. India has a robust and at times, overbearing IT Act.” Expressing support for Net Neutrality, his statement said, “the paper makes an assumption that Internet doesn’t come under any regulations, which is incorrect. All Internet companies are regulated by IT Act”.
IAMAI includes firms like Google, Facebook, Snapdeal, Ola, MakeMyTrip and Saavn as its members.
But TRAI has also come out to defend its the whole debate. TRAI chief Rahul Khullar had earlier told Indian Express, “There are passionate voices on both sides of the debate. And if that was not enough, there’s a corporate war going on between a media house and a telecom operator which is confounding already difficult matters.”
While TRAI’s paper has received criticism, it should be noted that the paper does devote a significant proportion to discussing Net Neutrality and the negative impact it could have if India overlooks the principle.
The paper says, “A policy decision to outright depart from “NN” (Net Neutrality) raises various antitrust and public interest issues. There are concerns that TSPs will discriminate against certain types of content and political opinions. Such practices may hurt consumers and diminish innovation in complementary sectors such as computer applications and content dissemination. Discriminatory pricing proposals, if implemented, could raise a variety of significant anti-competitive concerns.”
Discriminatory pricing proposals are what activists fear could take place if India abandons its stand on Net Neutrality, and users will be the one to suffer.
But there is counter-argument to the whole Net Neutrality debate. It states that in a country like India many still don’t have access to data or mobile Internet because it is expensive and that zero-ratings could be a possible solution.
Zero ratings ensure that a TSP or ISP could declare a service or an app as free, and usually these are services that the company has tied-up with. The Facebook-Reliance initiative under the Internet.org initiative is a Zero rating system, where the idea was to provide certain services like Facebook, ClearTrip, NDTV, etc for free for users in certain part of the country. A benevolent scheme no doubt, but a violation of Net Neutrality all the same. Thanks to the furor over Net Neutrality, ClearTrip and others have started pulling out of Internet.org.
Facebook CEO Mark Zuckerberg has defended Internet.org saying while network operators shouldn’t discriminate between services, “for people who are not on the internet though, having some connectivity and some ability to share is always much better than having no ability to connect and share at all. That’s why programs like Internet.org are important and can co-exist with net neutrality regulations.”
Zuckerberg isn’t the only one making an argument for Zero-rating apps. In a paper for Brookings Institute, Darrell M. West argues that zero-rating apps can actually help improve data access to those who can’t afford it.
As an example, the paper points out how “in Paraguay, an Internet.org project has generated an increase in “the number of people using the internet by 50% over the course of the partnership and [an] increase [in the] daily data usage by more than 50%.” In addition to this the paper says that, African nations have reported substantial upticks in Internet usage following introduction of Facebook Zero.
Interestingly, some countries like Chile have banned Zero ratings because they violate Net Neutrality. Pranesh Prakash says that the argument given in favour of ‘zero ratings’ is a bogus one.
Prakash says, “Exclusive deals like Flipkart-Airtel, or Reliance or Facebook or even free Wikipedia, end-up becoming anti-competitive. Discriminatory deals should not be allowed or those that become anti-competitive under Section 3 of Competition act should not be allowed.”
“If zero-rating can exist in an environment of competition, only then it’s a good thing,” he adds.
But government stepping-in isn’t entirely unexpected. Sajai Singh, Partner at J Sagar Associates Law Firm, points out that the government has now woken up to a new disruptive technology. He gives an example of cable television saying that when it first came up in India, the government had no laws to deal with cable.
“This is another example of the government playing catch up and it happens all across the world. It’ll happen more often with newer disruptive technologies like robotics, artificial intelligence. For instance, when the driverless car comes the government will have to bring in some legislation,” he adds.
For now, TRAI has received over 7-8 lakh comments on the discussion paper that they had first put up on their site on 27 March.
It is fair to argue that Net Neutrality has helped preserve the Internet’s free and open character in India and that a deviation from the same will hurt users the most. Then there’s the very real picture that India needs to provide Internet access to more of its citizens especially those who can’t afford it. For TRAI, treading a fine line between the two will prove to be a real challenge.