Here's the DoT view on net neutrality

17 Jul, 2015

net-neutrality (1)The Department of Telecommunication's (DoT) much-awaited report on net neutrality is a mixed bag for proponents of free and fair internet in the country.

While the report has batted for an open and unregulated regime for several over the top (OTT) services, it has proposed regulating local and national calls over Voice Over Internet Protocol (VoIP) apps such as WhatsApp and Skype.

Making its 111-page report public, the panel led by A K Bhargava has recommended that "user rights on the Internet need to be ensured so that Telecom Service Providers/Internet Service Providers (TSPs/ISPs) do not restrict the ability of the user to send, receive, display, use, post any legal content, application or service on the Internet, or restrict any kind of lawful Internet activity or use."

While the committee stoutly recommended that the principles of net neutrality must be adhered to, it chose not to clearly define the concept. "The crux of the matter is that we need not hard code the definition of Net Neutrality but assimilate the core principles of Net Neutrality and shape the actions around them," it said.

The panel proposed taking a rational approach to the issue and said that international best practices along with core principles of net neutrality will help in formulating an India-specific approach. In view of the changing demographics of internet usage in the country and its socio-politico-economic effects, the panel proposed that India should take a rational approach and initiate action in making an objective policy tailored to the country's needs.

Some of the panel's key recommendations are:

On VoIP OTT communication

Although the panel recommended that over the top (OTT) services should be free of regulatory interference, it proposed regulating local and national calls over VoIP apps such as WhatsApp and Skype. Explaining its stance, the panel said that local and national calls made through VoIP tools could be six times cheaper than that of regular mobile networks. Taking into consideration the demands of telecom operators who call for a level playing field with such as apps, the committee proposed regulating local and national calls over VoIP apps. This would mean that users will have to eventually start paying for VoIP calls on applications such as Skype, WhatsApp, or Google Chat.

However, it said messaging and international calls made through these apps should not be regulated. "In case of OTT VoIP international calling services, a liberal approach may be adopted. However, in case of domestic calls (local and national), communication services by TSPs and OTT communication services may be treated similarly from a regulatory angle for the present. The nature of regulatory similarity, the calibration of regulatory response and its phasing can be appropriately determined after public consultations and TRAI's recommendations to this effect," the report said.

No throttling, no blocking

The report categorically said that the core principles of net neutrality such as no throttling and no blocking should be enforced. However, it has directed the Telecom Regulatory Authority of India (TRAI) to take a call on whether any tariff plan, including the controversial zero rating plan, violates the principles of net neutrality.

Separation of application and network layer

The committee felt that there should be a separation of the "application layer" and "network layer" as application services are delivered over a licensed network.

On traffic management

It observed that traffic management is a complex and specialised field and that capacity building would be required before undertaking such an exercise. It further opined that legitimate traffic management practices may be allowed but should be "tested" against the core principles of net neutrality.

On tariff plans

Tariff plans offered by TSPs/ISPs must conform to the principles of net neutrality set forth in guidelines issued by the Government as licensor. TRAI may examine the tariff filings made by TSPs/ISPs to determine whether the tariff plan conforms to the principles of net neutrality.

On zero Rating

The committee proposes that tariff plans (including zero rating plans) be dealt in following ways:

Ex-ante determination – Before a licensee launches any tariff plan, the same would need to be filed before TRAI within a reasonable period prior to the launch of the plan. TRAI would examine each such tariff filing carefully to see if conforms to the principles of Net Neutrality principles and that it is not anti-competitive by distorting consumer markets. Such a filing requirement would include a deemed approval clause, if the regulator does not decide within a reasonable period. This would ensure balance of interests protecting the liberty of TSPs/ISPs to design specific tariff plans attuned to specific customer demands and at the same time ensure that the principles of Net Neutrality are not breached.

Ex-post regulation - Complaints on tariff plans may be dealt with on a case by case basis through an adjudicatory process to be specified by the regulator and after giving a reasonable opportunity of being heard. Imposition of penalties or financial  isincentives could be considered if the principles of Net Neutrality are violated. However, the measurement principles are to be defined to gauge whether the tariff plans impinge on Net Neutrality principles.

On gatekeepers

The panel has explicitly criticised the Facebook initiative, and said that content and application providers like Facebook cannot be permitted to act as gatekeepers. "The committee is of the firm opinion that content and application providers cannot be permitted to act as gatekeepers and use network operations to extract value, even if it is for an ostensible public purpose. Collaborations between TSPs and content providers that enable such gate-keeping role to be played by any entity should be actively discouraged," it said.

Here's what some of the leading startups have to say about the recommendations.

Ankit Jain, Founder & CEO, MyOperator

"This is partial neutrality for the internet. Licensing for Skype, WhatsApp and other such applications is not the solution. Telecom operators should now adapt to the new world of applications and connectivity. Zero-rating has also been left as a gray area. This will create another industry of haves and have nots. We have to wait and watch how consumers would react to domestic calling via app. But this will curb the growth of Digital India. However, I welcome the decision of 'No paid prioritisation' and 'No gatekeeping by content provider'."

Arun Gupta, CEO and Founder MoMagic Technologies:

Net neutrality is critical for the survival and success of startups like us and ensures nullifying of any kind of one-sided business practices by key service providers. Secondly, from the users' perspective, it will ensure access to all apps and content in an unbiased way, irrespective of the source. On the other side, many of the initiatives and campaigns to address the digital divide under the Digital India program will be futile without net neutrality. The entire entrepreneurial and innovation ecosystem, which is yet to reach a level of maturity, will take a big hit, if net neutrality seizes to exist or if it's tweaked or tampered, in any ways.

Nitin Gupta, CEO, PayU India

We are completely in favour of the DoT propositions, especially with the uniform usage of network provided by ISP. With the revamped legal framework and core principal of net neutrality intact, we believe there will be no loophole for consumer rights violations when it comes to optimum internet usage.

Navneet Singh, CEO & Co- Founder, PepperTap

Prima Facie, it seems generally good for the industry. There are some concerns on the privacy part wherein authorities and telcos may need to distinguish between voice/data of OTT services. However, they seem to be a step in the right direction. On the zero rating plans, I have mixed feelings currently - I feel it's not entirely in the spirit of net neutrality even though telcos are comparing them with Toll Free numbers.

Rahul Garg, CEO,

"I think it's a good step by DoT as it allows for new players, both large & small, to continue to innovate their products to provide better, more efficient & cheaper services to end users. Net Neutrality is extremely important to allow new players to disrupt old technologies and create efficient products for the future. I think it is important for large corporations to embrace this change & adapt their products to benefit from changing consumer behaviour rather than use tactics such as "Zero rating" to create unfair advantage and hamper innovation.'