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If users have to pay for the services available via the internet under the regime envisaged by TRAI, the net becomes an exercise in exclusion simply because the poor will be priced out of the benefits of digital access.



On March 24, 2015 the Telecom Regulatory Authority of India (TRAI) India’s regulator for the telecom space, posted a ‘consultation’paper on, among other things, net neutrality. A 118-page document,it invited comments on the subjects listed in the paper from the public.

The ‘Regulatory framework for over-the-top (OTT) services / internet services and net neutrality’essentially focused on what it called over-the-top (OTT) services. OTT here refers to all apps and services accessible online -- from Gmail to Facebook to news websites or even apps like Uber or Foodpanda.

The TRAI paper could arguably lay claim to being the first paper put out in the public domain by a government agency to draw such an unprecedented response. The Reserve Bank of India regularly posts discussion papers on proposed changes in monetary policy or banking regulations for the public's views. Many respond -- usually business houses and industry representatives. But the TRAI paper elicited replies and reactions not just from tech geeks but from the general public. ByApril 24, the deadline for sending in comments to an email address attached to the consultation paper, TRAI had received over a million responses.

This was to be expected. The paperproposes guidelines that would affect the rising number of net users across India. TRAI proposes to allow telecom operators (telcos) or network providers such as Airtel, Vodafone, Idea Cellular or BSNL to charge Indian net users one set of fees for accessing net services such as Skype and Facebook or WhatsApp and another for those less visited.

The responses to the TRAI guidelines also reflect a mood that was evident before the release of the TRAI guidelines when telecom operators adopted the Fair Usage Policy (FUP)since May 2014 and placed caps on ‘unlimited access’, lowering speeds once the caps had been reached. (Business Standard, May 8, 2015 online edition) For instance, telecom operator BSNL’s maximum unlimited plan ‘has speeds of up to 4 Mbps, but there is a cap — for downloads of up to 8 GB. And beyond this limit, the connection speed is around 16 times slower at 256 kbps.’(BS online).Airtel users found the telecom network ready to charge for services that are free, for instance Skype. 

Explaining the policy, the company’s websitesaid: ‘A very small number of customers use an excessive amount of the network bandwidth to the extent that it can impair the experience of others.’( the company would define levels of fair usage by customers, which the network stressed would be ‘very generous’, after which speeds would be reduced,‘rationalized by 50%’.

In other words the company intended to have two speed lanes in order to de-clutter bandwidth, de-congest traffic and thus enable more people to access net services.

The Fair Usage Policy has drawn flak; petitions have been sent to Airtel for instance, protesting the discrimination. One such was broadbandforumconsisting of Airtel subscribers calling it ‘a tremendously regressive move towards Internet usage in India’.

Swipes at net neutrality

The telcos’ adoption of the FUP underlines the central issue of the digital experience in India: Net neutrality. From our experience so far we know that the only charge we pay is to the network service provider or the telcos for access to the internet. Once in cyberspace and after having settled the user charge for specific bandwidth, we are free to roam, chat, WhatsApp, Skype or take out a subscription to academic sites for scholarly works or to newspapers online, or even read them for free. The user charge we pay the telco is the only fee.
Internet-based businesses/servicessuch as Flipkart would also pay the telcos commensurate user/hosting fees. Across the globe, Google or Facebook, which pay global hosting charges to say AT&T or Comcast or Verizon pay nothing more to Airtel or BSNL to get visits from theirusers. That is how we instinctively understand NN and that is why Airtel users were irate at its Fair Usage Policy. And that is why the TRAI paper drew such flak.

TRAI seems to be suggesting that telcos should be paid by service providers (such as Facebook or Flipkart) to access their customer base. In the case of the Fair Usage Policy Airtel wants to make the net user pay charges over a certain usage limit for hogging bandwidth (for chatting on Skype, for instance).

And that, to many Indians who responded so vociferously to TRAI, does not seem right. It goes against the spirit of the internet. It is, as the petition said, ‘regressive’.

While every internet user seems to be in favour of net neutrality, telcos oppose it on grounds that appear at first sight to make economic sense; others pay lip service to it and plan their own strategy to vitiate it: Facebook’s recently-launched would appear to be an example of the latter.

Even politicians have an opinion on NN. Congress Vice President Rahul Gandhi is in favour of it. And on May 5, 2015just before the second deadline of TRAI for ‘counter comments’ expired, the central government, according to a headline in The Times of India,‘throws its weight behind net neutrality’.IT minister Ravi Shankar Prasad was quoted saying: ‘Government stands for ensuring non-discriminatory access to internet for all citizens of the country and the current debate on net neutrality must be seen from this perspective.’(TOI May 6, 2015 p1)

What is net neutrality?

To understand its definition and implications for digital inclusion it might help to refer to an academic, who among others, propagated it most vociferously.

Tim Wu is a Professor of Law at Columbia University and frequent writer in academic journals and popular magazines on net neutrality. According to him, NN is not a matter oflaw; it’s not a piece of legislation in the first instance. As Wu says: ‘Network neutrality is best seen as a network design principle’(Net Neutrality FAQ. henceforth NNF) Thus neutrality is intrinsic to the internet. When you say the word ‘internet’ the word ‘neutral’must spring to mind. It is a defining condition. This neutrality is embedded in the capacity of the net as a public network to treat all content, sites and platforms equally. Only then does the public network become ‘maximally useful’.(NNF)


‘This allows the network to carry every form of information and support every kind of application.’(NNF)

Wu points out that the word ‘common carrier’ that is often applied to the internet has its origins in 16th century English common law and was applied to ports, later to railways. ‘A common carrier in its original meaning is a private entity that performs a public function.’(NNF)

The net as public network

Wu distinguishes the net-as-public network from cable TV as a private discriminatory network. The latter is not part of an interconnected network. Its discriminatory character gives it its uniqueness and utility. For instance cable TV divides its ‘data’ into ‘packets’ or packages that are exclusively for the user-payer.

Second, in cable TV the cable operator pays data providers, say CNN or HBO, fees to air their programmes to the cable’s end-users. So the relationship between the programme providers and end users -- the viewers -- is mediated through the cable operator, say TataSky.

This is not the case with the internet-as-publicnetwork. Its uniqueness (and usefulness) lies in non-discriminatory data dissemination and application-serving; it serves as a public platform (a common carrier) to support present and future innovations meant for the internet. Second, it has end-to-enduser privileges. The customer of an ISP (telco in India), say Airtel or BSNL, reaches out straight to the data/service provider, say WhatsApp or Google after paying initial user charges to the telco. Within the bandwidth permitted by his user payment (the package she buys from the ISP or telco) the end-user can roam freely from a vastly popular site (Skype) to a rarely visited one, say a blog out of the million that existat the same speed.

Sonet neutrality now has two related, direct offspring in fact: Non-discriminatory access and an end-to-end principle.

The third aspect is what economists call two-sided markets. In private cable networks (radio and TV) the user remains just that—a viewer or listener---the consumer; the data provider is likewise confined to his role as supplier.

On the internet, the end-user could become a content or data provider (content here means all types of media,applications,services, retailing) So the internet ‘intermediates’between end-users and providers ‘with the critical understanding that end-users can also become content providers’. (Robin S Lee and Tim Wu: Journal p62. HenceforthLee and Wu) Studies show that more than 60% of web content providers were ordinary people, not corporations.(Lessig and McChesney cited in Lee and Wu p66)

This means that the public network or the ‘interconnected network’ that is called the internet is a hothouse of creativity, innovation and entrepreneurship: at little or no cost or working capital. Facebook, Twitter, Reditt, Flipkart that took on the mighty Amazonin India, and a host of others are examples of creativity and innovation spawned by the public, non-discriminatory and end-to-end user design of the internet: in a word, the outcome of net neutrality.

The fourth outcome or offspring principle of a neutral network is what economists call zero-pricing or no-termination fees. In wire-line telephony or even in mobile telephony, if a call is made from one service operator’s network to   another network, say from an AT&T to a Verizon number, then the former will charge the latter a fee for terminating the call.

In the case of the internet, this would mean that Airtel as a service provider or telco for instance or even BSNL would charge Google, Facebook -- usually large applications -- a termination or access fee to reach out to its internet customers. Refusal to pay could mean blocking users’ access to the application.

In America there existed what Lee and Wu call a ‘de facto ban’ on such fees in the net space: a ‘zero-price’ rule prevailed. And in February this year (2015) the Federal Communications Commission, the American regulator, endorsed net neutrality as a law which means the zero price rule has become a de jure one.

And that is what will keep the internet market from fragmenting. Imagine what would have happened if termination fees were allowed: Facebook and Google would have to pay each telecom -- in USA there are three main ones, AT&T, Comcast and Verizon -- for accessing their respective customers, thus raising the transaction costs of a fledgling company at the very outset. Possibly Facebook would have tried to recover the charges by charging its end-users, thus fragmenting the market even further, creating differential pricing as Facebook could decide that some can pay more than others. In no time the internet would become akin to a private cable network with a bewildering differential-pricing system.

Net neutrality in India

To reiterate, a neutral net in which end-users and content providers meet and interchange freely, has been a part of the internet design principle. But the need for a law endorsing that principle had become imperative once service providers began to see the tremendous growth in the internet after 2000 , and how new applications had begun to catch public eyeballs.

Despite the vociferous opposition to net neutrality by the leading service providers such as AT&T among others, the FCC ruled in February in favourof keeping the net neutral.

In India the TRAI paper brought to a head the simmering debate that began with inchoate protests after the FUP was adopted by telcos last year. But even more interesting are the parallels between the strong public protest in the US for a neutral net and the protests in India.

The arguments listed by TRAI for more regulation and even licensing of the net providers almost echo the arguments used in USA by the telecom giants there.

It might be instructive to briefly outline the arguments against net neutrality in India so that one can also view the case for a neutral net from the viewpoint of digital inclusion in a poor country such as India.

Basically, the TRAI guidelines reflect the arguments of the COAI, the Cellular Operators’ Association of India comprising chiefly of Airtel, Vodafone, Idea Cellular, joined recently, ironically enough, by Google and Facebook.

What the telecoms desire is a regime of regulation and licensing for net content providers.


 With the phenomenal growth of applications, telecom operators have no control over apps or sites such as Google, MySpace, YouTube etc.They use the telecom operators’ base to reach users with no cost or least cost. They compete with traditional telecom services offered by the telecom operators, for example SMS or wireline telephony with VoIPs, WhatsApp (that may cost susbscribers ten cents a year)

Telecom operators have no control over content:‘no rights, no responsibilities, no claim for content on these apps’. (Abridged version of TRAI consultation paper by medianamahenceforth TRAI:media) They are not involved in planning, selling, or enabling internet apps. Their revenues from traditional net services, wireline telephony and mobiles are declining. Net user charges are not sufficient to enable them to constantly upgrade network infrastructure.

This is the argument used by Airtel and also by TRAI to justify guidelines to charge not just net services providers but also customers. For instance the Fair Usage Policy has been justified on the grounds of trafficde-congestion because of the immense popularity of some net services that tend to hog limited bandwidth.Incidentally Airtel also promised customers that the slower speeds for customers exceeding ‘fair usage’ would not affect the speeds for others obedient enough to stay within limits.

What Airtel is arguing is the conventional economic wisdom of opportunity cost. Too much hogging of bandwidth space by say Facebook ‘pushes’ other services off the shelf. Like in a retail store, limited physical space makes management choose between goods and price them accordingly.

By the same token some other telcos may decide that many sites that have low eyeballs simply occupy space. Again, as in a retail store where limited physical space makes management push slow-moving items off the shelves,telcoscan exercise ‘packet discrimination’ andcharge fresh entry sites a fee, thus raising transaction costs for the new apps or sites, fragmenting the internet and disincentivising innovation.

Herein lies the critical flaw in arguments against net neutrality. ‘Packet discrimination’, fragmentation of the universal design of the internet, termination fees as an incentive to infrastructure, or ‘pipes’ development by telecom operators, make digital inclusion in a country like India that much more difficult.

Over and above this, the idea of regulating net services as envisaged by TRAI in its consultation paper and the suggestion of licensing of net services and providers would further discourage innovation in a space that has been made unique (and socially useful) precisely by its capacity to foster creativity and innovation. Probably no other platform or public utility or common carrier has made such a difference to innovation and entrepreneurship as the internet.

So why is net neutrality important?

For an inclusive ‘Made in India’ entrepreneurship

In a country like India the odds have been historically stacked against entrepreneurship. First licensing raj set up barriers, then after the 1990s, the same barriers continued in more obtuse but no less obstructive ways. Despite public policy statements urging its growth, the best management institutes in Asia churning out bright business minds and a sound banking system, entrepreneurship in India has been rather thin on the ground.


Historically it has been stacked in favour of the privileged. Family-run enterprises still rule the roost; working capital is still hard to come by for youngsters with bright ideas and empty pockets.

But in the internet world, a youngster needs a vision, diligence and some familiarity with the bylanes of cyberspace, never mind the hole in the pocket. And she is on.

And what is the kind of innovation that emerges on the world wide web? Inevitably, creativity is inspired by dissatisfaction about current standards of net user-experience. Innovators feed upon what exists on the internet and attempt to transform that experience. Thus Google helped access information more easily, while Amazon helped shop more easily and Facebook helped connect friends more quickly and Khan Academy brought education to your home. In Flipkart’s case the founders wanted to start a price-comparison platform but then there weren’t too many sellers to compare and the next thing was inevitable: why not start an e-commerce site?(The Hindu, May31, 2012)

 And the rest is history of a kind that spells classicmarket competition; following Flipkart’s phenomenal success there is a slew of e-commerce sites and a site that allows you to compare book prices for instance.

Log on,digital democracy

Digital democracy is possible as long as the net remains neutral, universal, dynamic, with little or no entry costs apart from user charges and hosting charges. It could be the case that these may increase depending on the speeds opted for; it is not the service to be provided or application to be offered that is being charged. As long as there is no packet discrimination or termination fees or government regulation and licensing fees the net remains the best option for the economically and socially handicapped to ‘Make in India’.

Net neutrality offers the best option for digital inclusion by way of enterprise. It offers in this sense the most efficient means to widen the base of entrepreneurship than any other government plans or budgetary allocations/incentives so far. If one hears of new names on the ‘industrial’ firmament apart from the family-run businesses, it is thanks to an unfettered and neutral internet.

‘Most people would agree that in its purest form the internet is a digital democracy to be celebrated, where success is determined by ideas rather than budget…’(re/

For inclusion in education

The second social justification for a neutral net is the unprecedented possibility it opens up to universalize education. The goal of education, especially primary education, has not been achieved across the country for a variety of reasons, with the result that the poor in rural and urban areas are ill-equipped to imbibe the fruits of secondary and tertiary education. The quality of pedagogy remains uneven for a host of reasons, not least of which is poor infrastructure and instructional means.

Digital media offer the way out for spreading education to under-accessed, under-privileged areas. The starting premise for this has to be a network that is unfettered and zero-priced. It’s one thing that the poor would have to pay for network access, ie user charges. But if they have to pay for the services available via the network, or if service providers charge them in order to recover the charges they are paying the telecom providers under a regime envisaged by TRAI, then the net becomes an exercise in exclusion simply because the poor will be priced out of the benefits of digital access.

And the benefits are many. Digital access to a net unencumbered by the kind of regulation and fees contemplated by the telecoms and TRAI opens up a universe of learning and pedagogy that can combine depth of knowledge with felicity of dissemination. One reason why the Khan Academy has become so popular and received massive funding is because it combines both of the above.

There are various online offerings for elementary education in India and the numbers are growing as bright entrepreneurs jump in with fresh ideas for online pedagogy.

Needless to say, problems remain. Poor infrastructure stymies the potential. India needs faster internet connectivity. This sounds very much like the complaints of telcos and a justification for termination fees. But in fact it is not. As argued by many (www.medianama.comfor instance) telecom operators’ revenues are very buoyant and would become even more so if they invested in enhancement and upgrades of connectivity.

In fact such investments would be a win-win for all. Poor and under-privileged users would at minimum user-charges get access to online platforms for pedagogy, platforms that would attract venture capital investments (VCCircleEducation Investment Summit 2013) and telecom operators would get the benefits of volumes at their gates.

Another social benefit of a neutral net and digital access would be on adults deprived of an education in their youth. Adult illiteracy is a very big issue in India, and forms one of the bases for exploitation and perpetuation of their social and economic conditions, particularly in the case of women. Online accessibility to a myriad courses available and growing by the day in English and regional languages would add to their capacity and empower them to participate on a more equitable footing in the mainstream.

Given India’s multi-centric ethos rooted in an ancient tradition of tolerance and learning,a net not licensed and regulated by the government of the day can have beneficial and healing effects on the sensibilities of diverse communities feeling endangered by mainstream thoughts and cultures. Languages on the verge of extinction or in danger of being forgotten as dominant languages such as English and Hindi define discourse and codes ofsocial and economic mobility,can be ‘rescued’ by the net. Platforms encouraging the preservation of indigenous and tribal cultures and the modes of expression they are articulated in can help digitally include such groups as part of the rich tapestry of life that India represents.

While there are laudable offline efforts to preserve such modes, the digital incorporation of such forms of expression would not only serve archival needs:it would help bind society more inclusively by spreading awareness of a multifaceted India in the world. A neutral net, being participative and collaborative, would also encourage ongoing narratives in much the same way Wikipedia helps update information. That would further speed up the process of digital inclusion.

As of now, India stands on the verge of a remarkable opportunity to create the atmosphere for an unprecedented erasure of multiple levels of deprivation that have defied the best public policy efforts since Independence. The net or its long form ‘interconnected network’ offers us a unique design to assure us the greatest possibilities for social inclusion. For that to happen, to ensure we take full advantage of the benefits of the digital revolution sweeping across our country, it is imperative that the net remain neutral, that we remain faithful to its design as a dynamic and fluid space for human creativity and enterprise and learning.

Ashoak Upadhyay is a writer and journalist who has been commenting on public policy for three decades in major print media. In October 2013 his debut novel, "The Hungry Edge' was published. He is working on his second,, part of a trilogy on The Indian Comedy. He cintinues to comment on public policy.


    5. “Subsidizing Creativity through Network Design: Zero-Pricing and Network Neutrality.” Robin S. Lee Tim Wu. Journal of Economic Persepctives. Volume 23 No.3  Summer 2009.  Located at :
    10., May 2015


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