Why is India talking about net neutrality again?

Talks from telcos for higher pricing of data for the most popular Internet services mean that the net neutrality debate is back

In September, telecom operators wrote to the Department of Telecommunications (DoT), urging it to reconsider the pricing of data packets to rightly account for the amount of data consumed by over-the-top (OTT) Internet-based services. Their rationale was based on OTT services consuming more data, thereby having a lopsided impact on the overall operating expenditures incurred by these telcos.

"The TSP’s rights over the network created by them need to be restored in a manner in which Big Tech protects its intellectual property rights."- Reliance Jio

What the telcos did not expect to see here was a partial resumption of the entire net neutrality conversation in the country. After having closed it off following the landmark debate that involved Facebook (now Meta), net neutrality is a subject that has so far not seen turmoil. Until now, that is.

WHAT DO TELCOS WANT?

On July 7, the Telecom Regulatory Authority of India (TRAI) released a consultation paper for industry responses, titled ‘Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services’. Multiple parties and entities raised responses to TRAI’s consultation, which was published by the regulatory body on September 5.

The most scathing of the lot came from Bharti Airtel, Reliance Jio and Vodafone Idea—the three main telecom operators of India. Airtel’s representation to TRAI, which sums up the crux of all three operators in one, said, “Given the large requirements for meeting the vision of digital India, large traffic originators that account for a disproportionate amount of these (network infrastructure) investments must contribute a fair share. This should be through a direct contribution to TSPs (telecom service providers).”

The surcharge that telcos want companies to be charged, as per the submissions, could be “their share of contribution to the capital cost of broadband networks. This may be computed basis of traffic, revenue, number of consumers or some other parameter that should be decided soon.”

Each of the three telecom operators chose to hide behind the garb of “fair share” in telecom charges, with Airtel and Vodafone going so far as to claim that if a selection criterion such as a service having at least 5 million concurrent active users, or accounting for at least 5% of all broadband traffic at peak traffic from that platform, is achieved, only then should this supposed surcharge be levied. In other words, implementing such a strategy, as per the telcos, would not affect all companies.

"Large traffic originators must contribute a fair share through a direct contribution to telecom service providers."- Bharti Airtel

Airtel’s submission claims that such a plan will “protect innovation and allow smaller OTTs to thrive and compete.” Jio further likens its claim on network fees to Netflix restricting account sharing on its platform. “The TSP’s property rights over the network created by them need to be restored in a manner in which Big Tech protects its intellectual property rights—for instance, Netflix restricting account sharing or password sharing.”

It is this consultation paper, and its responses, that led to the renewal of the net neutrality debate in the country—seven years after it had first raised huge public outrage towards India’s prominent telecom operators.

NOT THE FIRST TIME

This, though, is not a first for India. The landmark 2016 battle for net neutrality resonates with how the telcos’ presentation escalated the topic into the limelight out of nowhere. Back then too, operators ultimately attempted to promote unfair pricing or usage tactics. Users would have either had to pay more to access a popular service or bundle themselves into a company’s plans entirely to pay less.

TRAI, in its landmark 2016 verdict that has so far defined net neutrality in India, noted that discriminatory pricing of services would not be permitted under the law of the land, thereby pushing back the telcos’ efforts towards a multi-billion-dollar monetisation avenue.

In 2018, the Ministry of Communications hard-coded net neutrality as a clause into the unified licence that telecom operators obtain to provide telecom services in the country. This means that telcos cannot go behind the scenes and order a private firm to pay them separate fees to be treated the same as any other service. In other words, in India, telcos cannot coerce companies, websites and apps into extra money, or threaten them with slower connectivity.

WHAT HAPPENS NEXT?

The Centre has so far held steadfast that no discussions to revisit net neutrality clauses have been entertained as yet. Media reports indicate that the government will likely remove any clause or mention of OTT platforms from the upcoming new Telecom Bill, to reduce confusion between them and traditional broadcasters or telephony service providers.

On 29 September 2023, the Union Minister of State for IT, Rajeev Chandrasekhar, noted during a media briefing that the battle for net neutrality against telcos was “a hard-fought one”, and recalled his involvement in writing to TRAI to retain consumer rights. Chandrasekhar’s statement came around a letter signed by notable figures from India’s startup community, such as Paytm founder Vijay Shekhar Sharma, Razorpay chief Harshil Mathur, and Zerodha cofounder Nithin Kamath, as well as 125 others, who wrote to TRAI urging them to retain confidence in favour of net neutrality.

Media reports quoting government officials point out that the Centre presently has no plan to go back on its stance towards net neutrality, to protect consumer interest to the fullest.

The battle, though, is not over. While TRAI presently awaits its appointment of a new chairperson, industry bodies, such as the Cellular Operators’ Association of India (COAI), are continuing to push in favour of the telcos. Reports also indicate that COAI has urged the TRAI not to entertain letters written to them in favour of net neutrality.

THE IMPACT ON USERS

Simply put, if the telcos were to win, companies would be left without any protection from what would essentially be arbitrary pricing claims from telcos. This could either lead to disruption in services or a levy of additional fees by companies such as Netflix or WhatsApp from the users for accessing the services. This could make such services more expensive and also give telecom operators a lopsided amount of power to control the flow of information.

The surcharge that telcos want companies to be charged, could be their share of contribution to the capital cost of broadband networks.

Telcos, on their part, cannot conclusively argue that their development of network infrastructure would be any different if the said OTT services were not present. Industry stakeholders, on this note, believe that telcos do not have a compelling case backing up their “fair usage” claims this time either—leaving consumers to potentially retain a second victory in net neutrality this time as well.

By Vernika Awal

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