14 July 2015

NET NEUTRALITY

In the last few months, net neutrality has been an intensely contested and debated topic in the field of telecommunications law. Net neutrality is the core principle governing internet. Telecom operators and internet service providers through technology can now control the speed of internet to access few of the websites, contents of internet, etc. Net neutrality essentially means ensuring that the users have equal access to all sites, at the same access speed for each site (independent of telco selection) and at the same data cost for access to each site. It is of utmost importance that this access to internet be neutral so as to ensure access to knowledge at the same rate and also to ensure equal freedom of doing online business.

INTRODUCTION OF AIRTEL ZERO

Airtel Zero plan announced in April 2014, violated the principle of net neutrality and would have split the internet into two a free internet and a paid internet. Such a scheme would allow internet companies to buy data from certain websites and only such sites would be available on a free internet. The result would be that users shall get access to only limited internet sites on the free internet. Further, every time a user of this scheme tried to access a site that was not available as part of the free internet, he/she would be notified that he/she cannot use that site without buying a data pack. It is likely that the consumers would continue using the free internet rather than buy a data pack. Therefore, the launch of the Zero plan led to a public uproar against the Airtel propaganda. By the end of December 2014, Airtel announced that it would not be implementing the scheme and shall await further directions from Telecom Regulatory Authority of India (TRAI).

ROLE OF TRAI

In March 2015, TRAI released a consultation paper on the regulatory framework for Over The Top (OTT) services such as Skype, Whatsapp, Viber, GoogleTalk, etc. The objective of this consultation paper was to analyse the implications of the growth of OTTs and consider whether or not changes were required in the current regulatory framework. This paper was criticised for being lop-sided in the favour of a differential price for the Internet Services Provider and for having contradictory statements. In April 2015, TRAI invited the public to express their opinions on this debate and received over a million emails.

In May 2015, Telecom Minister has said that the Government is in favour of ensuring non-discriminatory access to the Internet for all citizens of the country and would in most likelihood disallow controversial 'Zero Rating' plans floated by companies which do not meet the principles of net neutrality.

A six-member committee was constituted by the Department of Telecom to examine various aspects of net neutrality. This committee recommended that zero-rating plan does not violate net-neutrality and urged the government to adopt the policy of net neutrality, as it is globally defined. It also took the view that since this matter is essentially tariff-related; the final call should to be taken by TRAI, which is the ultimate authority on tariffs for the telecom sector.

ARGUMENTS OF TELECOM OPERATORS

Telecom companies argue that they have spent billions of dollars in setting up infrastructure and building telecom networks. They have been subjected to strict regulatory scrutiny, and yet millions of applications unfairly ride free on their networks. Many of these applications are worth billions of dollars and have millions of subscribers. Applications such as Skype, Viber, WhatsApp, etc compete with the voice and message offerings of the telecom companies, thus reducing their income.

ARGUMENTS OF CONSUMERS

It is worth noting that telecom companies do benefit from the applications that piggy-back on them. Increased usage of applications indicates more data consumption and more inflow of money. The licence to violate net neutrality could have a disastrous impact on justice as telecom companies would be in a position to ensure some sites are served faster than others, as certain companies will receive paid prioritization over others.

It could also become costlier for the users to use certain applications. The user would not experience the rest of the web world outside of the zero-rated sites and many would be denied the knowledge of what their choices on the internet are, violating their right to choose. They would miss out on all the new applications launched globally. Further, it would be harder for small Indian companies to raise the funding to enable them to be featured on this new free internet thus, resulting in only the bigger companies being available to the masses which are more than likely to opt for free internet.

They also contend that this affects the entrepreneurial aspirations of millions by blocking the opportunity that various start-ups such as Google, Facebook and Flipkart had. The internet governs the world of business, communication and entertainment amongst numerous other things. Rejecting net neutrality gives telecom companies the unrestrained power to play the gatekeeper to a valuable resource. It goes without saying that this will unleash price discrimination and monopolistic tendencies in the market.

Naturally, if Airtel is permitted to go ahead with its zero-rated plan, every other telecom operator will follow suit. Telecoms could enter into exclusive deals by which some services are available to only certain telecom networks. Telecom networks do not want to be merely communication pipes that agnostically transfer data. The cost of their ambition will be the loss of the Internets openness.

MHCO COMMENT:

There are presently no laws enforcing net neutrality in India. Although TRAI Guidelines of 2003 for Unified Access Service License promote net neutrality, it does not enforce it. However, the consultation paper released by TRAI in March 2015 after taking into consideration Airtels Zero rating plan is in conflict with its guidelines published in 2003. Internet users await the final decision of TRAI on this crucial matter.

(The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or contact@mhcolaw.com for any assistance.)