Contents
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Introduction
Net Neutrality debate has again returned back in India, with the TRAI inviting a comprehensive consultation on the possible mechanisms for regulation of Over-The-Top (OTT) services.
The OTT consultation has renewed the clamour from the telecom companies that content providing platforms/OTT platforms such as Netflix, Amazon Prime and Disney+ Hotstar must share the costs of their bandwidth. Similarly in November 2022, these major telecom companies demanded that platforms such as YouTube and WhatsApp must pay a share of their revenue to make up for the network costs.
However, these demands from the major telecom players to charge the OTT companies and big platforms like You tube and Whats App, sets a dangerous precedent that undermines the principle of net neutrality.
Arguments for and against the Demand of Telcos of charging the OTTs
| Arguments in favour of Charging | Arguments against Charging |
| The telecom companies argue that streaming platforms are free riders, which benefit from the infrastructure built and maintained by telecom companies. | Telecom companies do not own the internet, rather they only provide access to it. OTT platforms generate demand for internet access. Telecom companies must charge the customers rather than the OTT platforms to recover their infrastructure costs. |
| OTT services are not subjected to the same level of taxation and licensing fees as the telecom companies, which has led to an uneven playing field. | The OTT and the Internet access are two distinct markets because services from one are not substitutable for services in the other. Hence the Telcos (internet access providers) should not look to cross-subsidise their costs by charging the OTT rather than their customers. |
| Telecom companies revenue from traditional streams such as voice calls and Short Message Service (SMS) has come under pressure. The OTT services often provide free services. Ex- Whats app Voice calls. | The use of OTT services has led to a surge in data consumption, which is a growing revenue stream for telecom companies. |
What is Net Neutrality and what has been India’s position on it?
Net Neutrality- It is the principle that Internet service providers (ISP) and governments regulating the Internet, should treat all data on the Internet the same and should not discriminate or charge differentially.
Who coined the term Net Neutrality- Columbia Law School professor Tim Wu coined the term in a 2003 paper titled “Network Neutrality, Broadband Discrimination.” Wu proposed the concept to promote an even playing field on the Internet, ensuring that all data is treated equally without discrimination by Internet service providers (ISPs).
Evolution and implementation of net neutrality principle in India
There is no specific law which specifically governs the principle of net neutrality in India. However, TRAI has released various regulations/guidelines at different times ,which have in general have governed the breach of the principle.
| 2014 | Telecom operator Bharti Airtel decided to charge its customers for the internet calls. These led to widespread protests and demands for net neutrality. |
| 2015 | Department of Telecommunication (DoT) constituted a six-member committee on Net Neutrality to recommend overall policy Regulations and Technical responses. |
| 2016 | TRAI released the Prohibition of Discriminatory Tariffs for Data Services Regulations. Under this regulation, all traffic on the internet needs to be treated equally. This regulation was invoked to ban Free Basics and Airtel Zero in India, which violated the principles of net Neutrality. |
| 2018 | Department of Telecommunications (DoT) released the Regulatory framework on Net Neutrality. Internet service providers (ISPs) were disallowed from indulging in any kind of discriminatory treatment of content, including practices like blocking specific websites or speeding/ slowing down of content. |
Read More- TRAI Recommendations on Net Neutrality
What are the advantages of ‘net-neutrality’?
Protection of Small Entrepreneurs- Net Neutrality is extremely important for small business owners and start-ups who can launch their businesses online, advertise the products and sell them openly, without any discrimination. Ex- Myntra could compete with Amazon in India due to Net Neutrality.
Boost to economic growth- It has enabled the growth and development of unicorn startups based on free and democratised internet. Ex- India has witnessed the growth of over 100 unicorn startups due to net-neutrality.
Employment Generation- Digital economy based on the principles of neutrality of internet has created employment opportunities in both formal sector (coders) and informal sectors (gig workers).
Increasing Internet Penetration- Affordable tariffs due to internet neutrality have enabled internet penetration including the rural areas. This has facilitated access to public services in rural areas. Ex- E-governance platforms adoption in rural India.
Low tariffs of internet increasing its affordability- Net neutrality principles have ensured that internet tariffs remain low due to increase in consumer base of customers. India has one of the largest internet user base in India.
Freedom of speech and expression- It has enabled everyone to access the internet and exercise their freedom of speech and expression (Art 19(1)) through multiple platforms like Twitter and Koo.
Equality of customers- The lack of neutrality of internet, would also mean that instead of free access, there could be “package plans” for consumers. For example, users may have to pay more to access international websites compared to websites based in their own country. This would create a tiered internet system where users who pay more get better access to content.
What are the Challenges with ‘Net Neutrality’?
Decrease in Investment in internet infrastructure- Network Operators have to invest in maintaining and expanding the internet’s infrastructure to support new internet services. However, most of the benefits are reaped by Internet content companies like Google, Facebook,Youtube etc. This has led to reduction in investment by network operators in internet infrastructure. Ex- Financial strain on Indian network operators like Vodafone-Idea.
Less availability of free vital services- Opponents of internet neutrality contend that more vital services (like online healthcare) could be made accessible for free if the companies that draw excess bandwidth (e.g. the video streaming websites/OTTs) are charged extra for their heavy use.
Access to Objectionable Content- Offensive, dangerous, illicit and illegal content is accessible to everyone through net neutrality, and is difficult to filter out.
Burdensome Regulations- Net neutrality created burdensome and overreaching regulations to govern the internet e.g., Net Neutrality rules mandate extra reporting standards for ISPs to ensure compliance which adds to costs.
Net Neutrality not necessary for Tech Evolution- Critics of Net Neutrality argue that the internet developed amazingly well even in the absence of Net Neutrality e.g., most large internet companies including Google (1998), Facebook (2004), YouTube (2005) and Twitter (2006) were started and grew to success without any regulations.
What should be the way forward?
Telecom companies/Network operators to charge their customers- The network operators must charge their customers and not the internet content platforms. The increased internet data usage must be used by the telecom companies as one of their primary revenue streams.
Government intervention to help the telecom companies- The government must reduce spectrum fees and support the telecom companies through the Universal Service Obligation Fund (USOF).
Increased investment by telecom companies- Telecom companies must also make adequate investments to cater to the explosion of data traffic due to these OTT platforms.
Regulatory body to uphold Net Neutrality- The TRAI has recommended the establishment of a regulatory body to uphold Net Neutrality. This should be discussed with all stakeholders and taken forward.
Conclusion
It is imperative for all stakeholders, including policymakers, to recognise the long-term ramifications of acquiescing to the short-sighted demands of telecom companies. 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 countries such as India where the Internet is going to be the carrier of all Digital Public Infrastructure (DPI).
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