Net equality

Over one million. That’s how many Indians rose to defend a rather abstruse concept—of Net neutrality—in 12 days flat. Perhaps, there were not really a million Indians who could actually be counted individually but there were that many mails that poured in to say that the Internet as we know it now should not be meddled with. Net neutrality, they said, was fundamental to how the Internet operated. In the simplest terms it means that all traffic on the Internet must be treated equally by Internet service providers without any discrimination on speed or content (see ‘Net neutrality principles’). That is how it has been since the start of the Internet in the country and that is how it ought to remain.

So, when the Telecom Regulatory Authority of India, or TRAI, suggested that things ought to change because the revenues of telecom companies (telcos) were being hurt by Internet application companies such as Skype and Facebook and that these should also be regulated to ensure a level playing field, all hell broke loose. That’s when a million and more outraged Internet users—from individuals to Internet companies to small innovators—sent outraged responses to TRAI. That is a staggering number in a country where campaigns for worthy causes such as endangered farmers or access to life-saving medicines pull in no more than a few hundred champions, and that after passionate appeals and much prodding by activists.

On the other hand, the Net neutrality issue, however little people may have understood what it actually entails, resulted in a virtual tsunami. The giant wave of protest that hit the country in April swept up net geeks, journalists, writers, politicians, academics, celebrities, comedians and just about anyone with a link to the Internet on a common platform of resistance. The frenzied debate engulfed virtually every platform—websites, blogs, social media outlets, the good old print medium, TV channels—and in a first-of-its-kind campaign put the regulator and government on notice.

For TRAI, the response—backlash would, perhaps, be more appropriate—to its Consultation Paper on Regulatory Framework for Over-the-Top (OTT) Services that it released on March 27 must have been astounding. In spite of a convoluted, difficult-to-decipher consultation paper that ran into 118 pages, TRAI was inundated with replies that delivered a clear message: Netizens were ready to defend digital freedom to the last, with all the cyber tools at their command.

But the contested consultation paper did not come out of the blue. Soon after the Narendra Modi government came to power in May 2014, the telcos led by their lobby group, the Cellular Operators Association of India, has been pushing aggressively for regulation of OTT services. TRAI has not put much of a fight. In August last year it held a seminar on the subject, where the companies openly sought government backing for their plan. In fact, the TRAI paper has been described as “a shoddy piece of work that appears to be a cut and paste of the private notes submitted by telcos,” according to an analyst.

Over-the-top demand

What is pushing telcos to seek regulation of OTTs? The most obvious answer is that telcos have till now been banking on selling voice minutes, while their back-end operations relied on using voice over Internet protocol (or VOIP) to connect with other telcos and deliver call services. This enabled them to make handsome profits since VOIP costs only a fraction of traditional voice calls. But with OTTs such as Skype, WhatsApp and Google Hangouts providing the same voice calls at low rates directly on handsets, their profit margins have been whittled down.

Telecom companies, on the other hand, are looking at newer ways to maintain their revenues, mostly by aligning with the enemy. And yet, beyond these commercial concerns is a larger theme that drives the Net neutrality debate. This could be seen as the struggle to preserve the egalitarian nature of the Internet. Unlike in the real world, where democratic ideals have been throttled by a host of factors, the Internet promises a realm of infinite possibilities. An open Net, at least theoretically, gives everyone an equal chance—to study, to grow, to work, to do business, or launch social movements, may be even a revolution at little or no cost—and with fewer hindrances. It is this promise that Internet activists want to preserve at all costs.

Some of the inspiration appears to have come from the US, especially President Barack Obama who has been in the vanguard of the Net neutrality movement since his days as a senator. Here is what he said in 2007: “A big reason we’ve seen such incredible growth and innovation: Most Internet providers have treated Internet traffic equally. That’s a principle known as ‘Net neutrality’—and it says that an entrepreneur’s fledgling company should have the same chance to succeed as established corporations, and that access to a high school student’s blog shouldn’t be unfairly slowed down to make way for advertisers with more money.”

His steadfast support culminated in a strong public movement in support of Net neutrality. By September 2014, nearly four million Americans had filed public comments on Net neutrality—more than on any other issue the Federal Communications Commission (FCC) had handled. In November, Obama called on the regulator to institute the strongest possible rules to protect Net neutrality. And on February 26 this year, the FCC voted to keep the Internet open and free.

But can this “incredible equality” of the Internet that US President extols apply to India where but a small segment of the population has access to it? A look at the latest figures of Internet usage shows the yawning gap between the two countries (see ‘Indians are among top Internet users...’). Although India has the third highest number of Internet users in the world after China and the US with a total of 243 million, the penetration is abysmal at just 19 per cent of the population; in the US at least 87 per cent of the population uses the Net. Says Arjun Jayakumar, counsel for the Software Freedom Law Centre in Delhi, “The debate in India should be different from that in the US where access is not an issue. Here, access, more than competition among service providers is the nub.”

For Parminder Jeet Singh, executive director of non-profit IT for Change, one of the fallacies in the Net neutrality debate is to view the Internet as a product of the market. “It is something bigger of which the market is just a part. Most people don’t go beyond the free-market principle (competition, zero-rating, etc) when discussing Net neutrality. I see this as a principle of equality of opportunity, a larger social choice issue. Like common schooling. We need to be committed to this ideal more than the economic efficiency idea.” IT for Change is an India-based NGO working on information society theory and practice from the standpoint of equity, social justice and gender equality. (see ‘Beware of the banner under which you fight’).

Oddly enough, the main issue that TRAI raised upfront was not directly about Net neutrality. In classic bureaucratese, the regulator proposed 20 questions on two basic issues: should there be licensing of Internet services, and should there be non-discrimination of Internet access via telecom operators? As Pranesh Prakash, policy director of the Bengaluru-based Centre for Internet and Society, noted wryly in a recent interview, the TRAI paper rather than asking about Net neutrality was instead “asking the question whether we need to regulate the Internet even more, whether we need to regulate OTT players”.

In effect, what TRAI appears to be saying is that Indians must accept licensing of Internet services or compromise on Net neutrality, which means that any business that uses the Internet could be regulated by TRAI as an OTT service. This would result in regulatory overreach on a grand scale, warns Prabir Purkayastha, an engineer and activist who is chairperson of Knowledge Commons, a society of scientists, researchers and activists that works to popularise the practice of free and open source software.

He offers a simple explanation of what Net neutrality is all about: all applications or websites convert text, images, audio or video into data packets at the sender’s end and these are reassembled at the receiver’s end. “The default on the Internet is Net neutrality as the transmission protocol of the Internet treats all data packets in the same way. Therefore, it is built into the DNA of the Internet. The telecom companies have been using the power they have to argue that since it is their infrastructure through which any web service, website or application reaches the subscriber they have the right to levy ‘toll’ and therefore change the way that Internet now works.”

Voice matters

It is voice that is at the centre of the dispute. Invariably, telcos cite the case of Skype to impress upon the regulator how much business they are losing. What they do is to calculate losses by converting Skype call time to equivalent voice call value, which is a fallacious argument since it cannot be claimed that all users of Skype would actually make voice calls if that service were not available. But TRAI has accepted this argument, at least partially, by calling Skype voice calls “revenue foregone”. It states in the consultation paper: “This phenomenon, namely, the growth of OTT apps providing voice services has started to impact revenues of TSPs (telecom service providers) from voice services, which constitutes a major portion of their revenues.” There is, however, no data to back this claim.

The other case of “lost revenues” that is often made is to compare SMSs on voice networks to equivalent services such as WhatsApp. Purkayastha points out that this is not quite correct. Mobile services were originally designated as value-added services, while voice on landline was considered a basic service. When mobile services were merged into basic services, SMS also came in. The reality is that telecom companies offer SMS, essentially a data service, at a very high price. This penalises the lower-end users, who use 2G services; not high-end users who have migrated to voice and data services and can use applications such as WhatsApp.

However, Mahesh Uppal, director of Com First (India) Pvt Ltd, which has over 20 years of experience in communications policy and regulation, has a somewhat different perspective. While making it clear that the concern about revenues of Internet companies “is largely irrelevant to the Net neutrality debate”, he says the point is whether regulation is hurting one side more. “I would argue that it is. The regulatory burden on infrastructure players is much more. Its financial part alone, licence fees, spectrum usage charges, is over $3 billion per year, and I am excluding cost of spectrum or equipment.”

He says the debate does not take into account what is specific to India: the spectrum fee of Rs 1 lakh crore which is not charged anywhere else in the world along with a host of compliance issues. “We are not treating like as like. That’s the crux of the issue.” His argument does not have too many takers in the overheated debate on Net neutrality.

Lawyer Rishab Bailey, legal consultant to Knowledge Commons, points out that India does not have complete voice penetration as of now. Even as telcos claim they are losing traffic to OTTs they are still increasing the total subscriber base and therefore making more money. Bailey’s research reveals that the industry is in good health. The industry’s revenue grew 10.1 per cent in financial year 2014, compared with an 8.6 per cent growth in the previous year. While Bharti recorded a 50 basis points year-on-year growth and Vodafone India a 40 basis points growth, Idea Cellular topped the charts with a 90 basis points rise.

Almost everyone with a social media or political profile has weighed in on the debate with Net neutrality getting a resounding endorsement. In Parliament, questions were raised on the government intentions, forcing Telecom Minister Ravi Shankar Prasad to make it clear that it stands for “non-discriminatory access to Internet for all citizens of the country”. In an interview to Economic Times, Prasad went so far as to indicate that the implementation of Net neutrality could be made part of the licence conditions. He even suggested that while the government was open to TRAI’S recommendations it would not allow any policy decision that would throttle Net neutrality.

But the triumph of Net neutrality in India will be sealed only if it comes with the assurance of access to the hundred millions who are denied. The debate ought to move to how this can be done and at what cost. As one commentator points out, “Net neutrality is sound commonsense. It should be based on capacity and context.

It is not deep philosophy like declaring that there will be no racial discrimination. We need to figure out how to regulate and what to regulate to this end.”

Telcos and Internet firms are coming up with new models that dilute Net neutrality



When Mark Zuckerberg, founder and CEO of Facebook, toured India in October last year he was royalty. He met Prime Minister Narendra Modi and the telecom minister, visited a rural school and created a lot of buzz. At the conference on his new venture Internet.org, he reiterated his philosophy that the world needs access to free Internet and that his new company would provide it.

In February 2015, Internet.org was officially launched in India in partnership with Reliance Communications. Thereafter, Zuckerberg lost his halo. He has been portrayed as a wily entrepreneur who is undermining Net neutrality with Internet.org. What the service offers to the users is free access to select websites while making rival websites chargeable. So while users can access Bing for free, they have to pay to access Google. This is sold as a “solution for poor countries” but critics accuse the scheme as a “solution to keep countries poor”.

At around the same time, Bharti Airtel launched a variation called Airtel Zero in a tie-up with several partners. While Internet.org has brokered deals with operators to allow users to access a select bouquet of websites and Internet services for free, in the case of Airtel Zero, the telecom flipped the concept to let developers pay the cost of their visitors’ traffic. Both ventures fall in the zero-rating category. In Chile, for instance, such offerings are barred by law.

There was an unprecedented outcry against these schemes because a whole lot of Net activists saw these as a violation of Net neutrality principles because there should be no discrimination on data, content, site, platform, or application. Outraged activists said these “walled garden” plans were not just anti-competitive but would also break up the Internet into several pieces, with parts emerging as the enclaves of the rich and privileged.

In defence, Zuckerberg wrote a piece saying his plan was helping millions in poor countries. “By partnering with mobile operators and governments in different countries, Internet.org offers free access in local languages to basic Internet services in areas like jobs, health, education and messaging.” By lowering the cost of accessing the Internet, “more than 800 million people in nine countries can now access free basic services through Internet.org,” he said.

But the widespread censure had its effect. Travel portal Cleartrip.com and media companies Times Group and NDTV withdrew from Internet.org while one of India’s largest online retailers Flipkart put an end to discussions on joining Airtel Zero.

But newer business models by Internet companies are unsettling the old certainties about Net neutrality. On May 6, Jana, one of the largest app advertising platforms after Facebook, launched a user-retention service called Jana Loyalty with which it aims to give free access to the Internet to a billion people in the emerging world. The Boston-based company has set the cat among the pigeons by making a significant change to zero-rating offerings. In an interview to The Hindu, Jana founder Nathan Eagle explained that the Jana app mCent, which is sponsored by companies who wish to drive usage of their apps, does not follow the walled garden approach. There are no exclusive deals and the app has been integrated with every telco in India, which means that anyone with an Android phone can access it. The company reimburses app users for downloading and using an app, but the reimbursed data can then be used anywhere on the Internet in an unrestricted way.

The big incentive is that users also get additional free data on top of what it costs them to download or try an app within mCent and this data can also be used howsoever they choose: to surf the web, download a new app, or watch a video. Eagle says his company is a strong supporter of Net neutrality and that Jana’s idea is to make the entire Internet more affordable to everyone and at the same time, make it less costly for people to explore useful new apps. Another point he makes is that Jana “works with app developers of all sizes—from small, local app developers in India, to large global brands like Amazon and Tencent”.

So where does Jana fit in the polarised Net neutrality debate? Is it a leaky walled garden or a new entity altogether? That the activists have not reacted to this latest initiative to get the next billion on to the Internet appears to indicate that they are stumped.