The Points Indian Telcos Used to Further Their Anti-Net Neutrality Agenda With Trai

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The Points Indian Telcos Used to Further Their Anti-Net Neutrality Agenda With Trai

The debate around net neutrality in India reached a fever pitch after Trai released its draft guidelines on OTT licensing a month ago, but the noise seems to have died down now. The regulator has published everyone's responses to its call for comments - along with their names and email addresses - and it is inviting counter comments and feedback from all stakeholders. May 8 is the deadline to send Trai your counter-comments, and the regulator will then work to take all the feedback on board before making its final recommendations.

That's all pretty far away right now, and as we've noted before, the endgame of this process is even further away, as the final decision will rest with the government. It's possible that the final regulations around the subject - if any - will be completely at odds with what Trai suggests now, and by the time all this happens, will people still be sensitive to the issue? We certainly hope that's the case.

(Also see: With Feedback Period for Trai Over, What's Next for Net Neutrality in India?)

TSPs support net neutrality, if they can define it
Looking at the responses that our telecom service providers gave to Trai on the topic, we certainly hope so. A look at the responses from 10 of the biggest telcos - Vodafone, Airtel, Idea, Reliance Communications, BSNL, MTNL, Tata Teleservices, Sistema Shyam Teleservices (MTS), Acto and Citycom (Spectranet) - shows that only one (Spectranet) understands the importance of net neutrality and argues that services like Skype are not hurting TSPs but actually providing real gains.

(Also see: Here's an Indian ISP That Actually Supports Net Neutrality)

In general, many of the responses are written in the same convoluted style as the practically unreadable draft consultation paper from Trai and given how many times these questions and responses dovetail into the TSPs position, it creates (the perhaps unfair) impression that these questions, and their responses, were penned by the same minds.

Almost all the responses start with declaring support for the idea of net neutrality. Vodafone for example states that it is "pro consumer - providing an open Internet and Internet for all" and "we do not block or throttle any services." Idea says it "fully supports the principle of Net Neutrality, which is necessary for the proliferation of Internet." The strongest start however comes from MTNL.

It writes: "MTNL strongly supports the concept of Net-Neutrality. Net Neutrality implies no blocking, no prioritisation, no discrimination of any kind, no zero rating and no throttling of any content on a network. The 'Digital India' vision of GoI [Government of India] may be imbibed in the telecom policies."

BSNL's response however quickly sets the tone which all the other providers also take. In its response to Trai, BSNL states: "Net neutrality may of course be adopted as a legal concern but imposition of any regulation on net neutrality is not warranted."

Reliance also used its submission to Trai to address the issue of Internet.org, which companies like Cleartrip and NDTV have withdrawn from.

Reliance states: "It is brought out that product like Internet.org launched by RCom is an example of data product which is differentiated from its competition peers in terms of value add of providing free (pricing) access to 38 websites over RCom's network. It is clarified that at no point, the traffic on the RCom network is being prioritised for the websites that are allowed free access under Internet.org or other traffic, i.e websites not part of Internet.org, being blocked/ throttled."

Blame the foreign hand
According to Vodafone's submission to Trai, net neutrality is not suitable for India.

"Net neutrality is a US concept that has been exported to India; unlike the US however, Indian consumers have a wide range of operators to choose from and the freedom to switch to another operator while retaining their mobile number," states Vodafone.

However, this statement lacks credibility. If anything, the US has better mobile number portability than India. Right now, Canada, South Africa and the United States are the only countries that offer full number portability transfers between both fixed lines and mobile phone lines.

Airtel also brings up the issue of national security in its submission to Trai.

"National security agencies and the Department of Telecommunications have often voiced their interest in having Indian TSPs intercept and monitor the VoIP traffic offered by OTT Communication Service Providers," states Airtel.

It adds: "However, since the TSPs merely provide internet, they are unable to intercept and monitor services which are provided in a strong encrypted form and through switching servers not under their control. Besides national security concerns, Indian TSPs also continue to risk violations of their licensing conditions, specifically the condition that mandate them to provide for lawful interception and monitoring of each type of service/product including internet/internet telephony passing through their networks."

OTTs costing telcos big bucks
The other most common refrain in all the responses are the huge losses that the telcos are suffering because of OTTs. From Idea to Vodafone to Reliance to BSNL, every telco claims that the industry's financial performance is far from healthy. At the same time, Idea describes the industry as "extremely successful," writing that it has been able to reach 900 million customers. In fact, Airtel has posted a 30 percent jump in its profits in Q4, thanks to mobile data growth.

Reliance Communication addresses increased revenue from data. It states in its submission: "The growth of OTT impacting the traditional revenue stream of TSPs [...] The increase in data revenues of the TSPs is not sufficient to compensate for this impact."

Vodafone points out that the industry has invested over Rs. 750,000 crores in setting up the networks, and needs to invest another Rs. 500,000 crores over the next 5 years.

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MTNL also states: "The growth of OTT is definitely hampering the traditional revenue stream of a TSP [...] OTT players are not paying anything, neither to any authority nor to any TSP for interconnection, and carriage of the traffic despite huge revenue being earned by them through advertisement, subscription charges, bundling with handset manufacturers, in-app purchases and selling certain features."

Tata Teleservices also states that the increase in data revenue does not compensate for the impact of OTT services.

OTTs or customers, someone's got to pay
While Airtel might have been one of the first companies to talk about differential pricing for online services, its submission to Trai avoids that contentious topic. Instead, it argues that "pricing innovations such as zero rating, which will act as a catalyst in the widespread adoption of broadband services, should not be stopped in any manner."

It adds that net neutrality is largely theoretical anyway, and wouldn't be possible unless "every user has the same device located at the same place; all cells have uniform distribution; network is not constrained because of the unavailability of spectrum at any place at any given point of tie; all cell sites function on the same technology; and every user is equally distant from the cell site."

While coming out against blocking sites - like all the other providers - Airtel states that toll free data arrangements promote social welfare. It also submits that OTTs should pay a network usage charge that should "not have any linkage to retail tariffs in any form".

Idea goes further, and says that if "data pricing for all services including VoIP will be the same, then the current then the current tariffs of Voice (75p/ min), SMS (20p/ SMS) and Data (25p/ MB) will have to converge to anywhere between 108 p/MB to 250 p/ MB for data just to maintain the current revenue as shown above." In other words, Idea says that you should expect your data costs to rise by 4 to 10 times.

All 9 TSPs agreed that some kind of plan where the OTTs pay them is a good idea.

"We believe that TSPs should have the freedom to develop business models in consumer interest based on commercial agreements with OTT players," writes Vodafone. "Zero rating programs are effective means of bridging the digital divide, and we believe such arrangements should be permitted," adds Airtel. Idea would like to either "charge for communication services over and above the charges being applied for bundled data or data packs," or, "consumers will pay normal data charges for using OTT communication services and the deficit will be paid by the OTTs, based on the volume of traffic."

"OTT players should pay for the use of the TSPs network over and above data charges paid by consumers. TSPs should be permitted to use price based differentiation of products," writes Reliance. "If operators are able to work out a commercial arrangement with the OTT application providers, it should be allowed," writes BSNL, while MTNL goes a step further and writes that "OTT players should not be allowed to offer voice services in India till regulatory playing field is established." It adds that it favours "sharing of revenue by OTT player(s) with the TSP whose bandwidth consumption exceeds a threshold limit."

MTS adds that "it is common knowledge that Internet service providers use various techniques to optimize the performance of their network, by compressing the video data so that it takes up less space and cost the consumers less to use, by adjusting the video content so that it take into account the size of the screen and handset being used." It adds that "if operators act as dumb pipe as being expected by OTT providers the quality will go down and the customers will pay more."

The lone voice of dissent
Of these 10 TSPs, the only one to have a differing view is Citycom - better known as Spectranet - whose responses completely contradict the scenario which the other companies are painting. For one thing, it refutes the claim that VoIP needs to be regulated the way voice services are.

"All [...] should be governed by similar law such that there should be a level playing field for similar service among all the operators, whether Indian or foreign for tax, for security considerations. However comparison has to be on similar service," writes Citycom. "It is not at all justifiable to compare Normal voice service with VoIP service."

Further it argues that regulations will stifle innovation - innovation that could lead to increased revenues. "It is too early in our Indian Context to establish a regulatory framework for OTT applications. Any regulatory intervention would only help dominant TSPs further enhancing their market power thus stifling competition. This is not a desirable situation," writes Citycom, and adds, "There are innovations constantly happening in the Internet. With higher resolution HD, 4K, now 8K, data consumption [has been] going up manifold over last few years. This is a huge upside to TSPs."

It also states that the claim that OTTs are not paying for the service they use if false: "TSP's are getting their bandwidth revenues at both ends respectively. We do not feel there are any such imbalances which require regulatory changes."

Finally, Citycom also addresses an important point - Trai should not be regulating issues around healthcare or e-commerce, as existing laws already should cover those areas.

Citycom writes: "It also needs to be pointed out that various services attract respective laws. If it is a taxi service, transportation laws [are there]. E-commerce would attract taxes rules and consumer goods supplied governed under consumer protection laws, [and] content services [come] under the IT act."

These are all good points, and it's heartening to read them. But seeing 9 other TSPs say the exact opposite is very worrying for customers.

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Gopal Sathe Gopal Sathe is the Editor of Gadgets 360. He has covered technology for 15 years. He has written about data use and privacy, and its use in politics. He has also written extensively about the latest devices, video games, and startups in India. Write to gopal@ndtv.com or get in touch on Twitter through his handle @gopalsathe with tips. More
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