Context: Net neutrality in India has been a subject of discussion, regulatory action, and public concern for several years. Content and service providers in India, including major technology companies, have been vocal supporters of net neutrality. On the other hand, Telecom Companies have been very vocal regarding the implementation of network usage fees depending on the consumption of bandwidth.
Stakeholders in the Internet Space
- There are four different kinds of stakeholders in the Internet space which include:
- Consumers of any Internet service.
- Telecom Service Providers (TSPs/Telcos) or Internet Service Providers (ISPs), which provide connectivity to the Internet and charge subscribers for it.
- Over-The-Top (OTT) service providers are streaming services that distribute content over the internet.
- Government, which may regulate and define relationships between these players. Telecom Regulatory Authority of India (TRAI) is an independent regulator in the telecom sector, which mainly regulates TSPs and their licensing conditions, etc.
What is the demand of the Telecom companies (Telcos)?
- Cost compensation:
- Telcos have seen revenue from traditional streams such as voice calls and Short Message Service (SMS) come under pressure, as competing OTT services are often free.
- Telcos have had to invest heavily in upgrading their infrastructure to handle increased data traffic, without necessarily seeing an equivalent rise in revenue.
- OTT services are not subject to the same level of taxation and licensing fees, leading to an uneven playing field.
- The Telecom companies have demanded that OTT content providers such as Netflix, Amazon Prime, and Disney+ Hotstar share in the costs of bandwidth. They argue that streaming platforms are free riders, benefiting from the infrastructure built and maintained by the telecom companies.
However, this argument is fundamentally flawed and sets a dangerous precedent that undermines the principle of net neutrality.
What is Net Neutrality?
- Net Neutrality is the principle that Internet access providers (ISPs) must treat all traffic originating from and terminating to the Internet equally without discrimination.
- The modern articulation of the idea may be largely credited to Columbia Law School professor Tim Wu, who coined the term “net neutrality” in 2003 to promote an even playing field on the Internet.
Key principles and concepts of net neutrality:
- Equal Access: All Internet users should have equal access to all lawful content, applications, and services on the Internet without any blocking or throttling of specific websites or services.
- Non-Discrimination: ISPs should not discriminate against or favour particular internet traffic, services, or content based on factors like their source, ownership, or the type of data being transmitted. This means that ISPs should not give preferential treatment to their own services or those of affiliated companies.
- No Paid Prioritization: Net neutrality opposes the practice of paid prioritisation, where ISPs would charge content providers or consumers for faster or better access to certain websites or online services. All internet traffic should be treated equally, regardless of whether extra fees are paid.
- Open Internet: The concept of an open Internet is closely tied to net neutrality. An open internet is one where users can access and communicate with any lawful content or service, and where innovation and competition can thrive without artificial barriers.
Flawed arguments of Telcos that affect Net Neutrality:
- Telecom companies do not own the Internet; rather, they provide access to it. Consumers pay the telcos for access services by purchasing data plans.
- By offering services that consumers desire, OTT platforms generate demand for Internet access. The use of OTT services has led to a surge in data consumption, which is a growing revenue stream for telecom companies.
- In the marketplace for Internet access, consumers are free to choose the provider that offers them the highest bandwidth, data volume, and reliability at an affordable price.
- Telecom companies are at liberty to increase their prices which should go towards maintaining and upgrading their infrastructure.
- These are distinct markets because services from one are not substitutable for services in the other. Therefore, it is logical to maintain a separation of costs between these two markets.
Hence, the attempt of telcos to double dip by charging both consumers and content providers undermines net neutrality.
How Internet would be in the absence of Net Neutrality?
- Monopolize Internet: In the absence of net neutrality, ISPs could exert greater control over internet traffic, allowing them to monetize specific online services. This would enable them to charge companies like YouTube and Netflix extra fees for their data-intensive content, in contrast to ordinary websites.
- Cost passed on to consumers: If OTT platforms subscribe to the demands of the telcos, the incurred costs would trickle down to subscribers, either through increased subscription fees or degraded service quality for those platforms unwilling or unable to pay the charge. This outcome can only be detrimental to consumers who have come to rely on OTT services for entertainment, education, and professional pursuits.
- Stifle Innovation: The absence of net neutrality could stifle web innovation. Startups would face a significant disadvantage compared to well-established corporations with the financial means to secure faster internet access. This might lead to a web dominated by a select few major players, hindering the development of an open and diverse online ecosystem.
Is there a law which enforces Net Neutrality in India?
- There are no laws enforcing net neutrality in India. Although TRAI guidelines for the Unified Access Service License promote net neutrality, it does not enforce it.
- Indian telcos are bound by their license conditions to ensure net neutrality.
- The Information Technology Act 2000 also does not prohibit companies from throttling their service.
- In 2016, TRAI released a set of regulations known as the “Prohibition of Discriminatory Tariffs for Data Services Regulations” to uphold the principles of net neutrality.
- Net neutrality formed the basis of TRAI’s regulation on the prohibition of discriminatory tariffs for data services brought out on February 8, 2016. The regulator’s action forced the withdrawal of Facebook’s Free Basics platform and some other offerings in India.
- Later, on November 28, 2017, TRAI released its comprehensive recommendations, which have largely guided the adoption of this principle in India.
- The Body of European Regulators for Electronic Communications (BEREC) and TRAI adopted a Joint Statement for an Open Internet on June 14, 2018, later reaffirmed in 2020. The two organisations agreed through this memorandum of understanding to cooperate in developing technological and policy initiatives for net neutrality.
- Increase prices of services by telcos if needed: Telcos may consider adjusting their pricing models to accommodate increased operational costs while still offering competitive services to consumers.
- Advocate towards Open Internet: Upholding the principles of net neutrality is not merely about preserving the ethos of an open internet but is also intrinsic to fostering a conducive environment for innovation, competition, and consumer welfare, especially in countries such as India where the internet is going to be the carrier of all Digital Public Infrastructure (DPI). Promoting an open internet is essential for ensuring that everyone, including marginalised communities, has equal access to the benefits of the digital age.
- Devise a legal framework: Establishing a legal framework for net neutrality is crucial to provide a clear set of rules and guidelines that govern how ISPs and telcos should treat internet traffic. Legislation can help prevent discrimination, blocking, or throttling of certain content or services while allowing for reasonable network management practices. This framework should also outline penalties and enforcement mechanisms to deter violations.
- Proactive approach by consumers: Consumers can play an active role in safeguarding net neutrality. They should be encouraged to report any instances of net neutrality violations, such as the blocking or throttling of specific websites or services by their ISPs. Consumer complaints and feedback can help regulatory authorities take action against violators and ensure compliance with net neutrality principles.