| Subject: TRAI’s 20 questions about Net Neutrality and OTT players in India |
| From: Mani SSK |
| Date: 06-Apr-15 3:19 PM |
| To: netneutralityindia@gmail.com, advqos@trai.gov.in |
Question 1: Is it too early to establish a regulatory framework for OTT services, since internet penetration is still evolving, access speeds are generally low and there is limited coverage of high-speed broadband in the country? Or, should some beginning be made now with a regulatory framework that could be adapted to changes in the future? Please comment with justifications.
ANSWER: Any regulatory framework which breaks the principles of Net Neutrality should NEVER be adopted, neither now nor in the future.
ANSWER:A regulatory framework only would make sense if its easy to enforce and not arbitrarily used. At the heart of this matter lies the fact that the Internet is a very dynamic place, where technology and its applications are changing at a speed which few other industries can match.
This means it will be difficult to classify what is a communication service. Some would be clearcut - for example, Skype, WhatsApp etc. However, ‘Messaging’ can mean anything. Who is there is decide what is a ‘messaging’ service?
Because of this issue, compliance cannot realistically be enforced in the same manner for all players. At most, it could be only be enforced one some big players, but smaller players who do the similar service might fly under the radar. Even if compliance is somehow enforced, it will be extremely arbitrary. Once again, who will define which service is a voice/video/messaging service? There will be blurred lines. Can a greeting card website be clubbed as a ‘messaging service’ with the likes of whatsapp? Almost every major site in some way or another tries to incorporate messaging in some way or another. Who will define ‘messaging’? is GMail a messaging service? Are social media sites messaging services? What about reddit? Twitter? Taxi cab services also send messages to users, are they also messaging services? Apps for online shopping sites also send users notifications, so are they also messaging services?
The wording is so vague that pretty much any successful online service (related to any industry, not just telecommunication) can be deemed under these categories of “voice, video or messaging” services.
The only set of regulations which can realistically be imposed in a fair and transparent manner would be to make sure no discrimination is done in throttling traffic speeds for one website over another. In effect, regulations favouring net neutrality.
In fact, Infotel Broadband Services Ltd (now called Reliance Jio Infocomm, and is an ISP and TSP itself) stated the following in a letter to the TRAI, with regards to licensing of Internet/Data applications
Technology changes certain industries, and companies and services have to adapt to it. In the 80s (and even 90s in india), audio cassettes were the primary way to buy music, but then came Compact Discs. After CDs, came MP3 and other digital mediums. Nowadays a lot of people don’t even bother with MP3s and instead go with subscription services like Spotify, Rdio and more. A certain Indian company who owns a major indian network operator indeed is an investor in such a music subscription service itself. I doubt they care about the decline in revenue this would have on CDs and audio cassettes, nor do they probably have a plan to compensate the CD manufacturing industry on potential losses of revenue their music subscription service will have on the CD manufacturing industry.
We did not overly care about horse-driven carts when automobiles were introduced. Industry needs to change and adapt to the technological landscape. There is even more money to be made here, and TSPs and ISPs are already doing very well for themselves.
Increase in data revenues is sufficient to compensate for this impact, especially in the long term. Mobile data usage is growing at an enormous rate. Last year’s mobile data traffic was nearly 30 times the size of the entire global Internet in 2000. In 2014, on an average, a smart device generated 22 times more traffic than a non-smart device. With the rise in smartphone usage, more and more people will be consuming data. If TSPs can still not capitalise on this enormously exploding demand for data, then it is advisable for them to re-look their operations, prices and other areas of business.
Regarding India in particular, in the same Cisco report, it is mentioned that Bharti Airtel reported mobile data traffic growth of 95% between 3Q 2013 and 3Q 2014, Reliance Communications reported mobile data traffic growth of 75% between 3Q 2013 and 3Q 2014.
There is an argument by some parties that OTT players are “freeloading” on TSPs as TSPs are the ones who are doing the hard work of investing in all the infrastructure, and the OTT players are just profiting on their infrastructure. However, a strong counter-argument is that these TSPs are profiting from increased data usage even though the hard work of making the actual apps and sites (that users pay data charges for) is actually done by the OTT players. So in effect, TSPs are “freeloading” off OTT players and getting increased data usage (which drives increased revenues for TSPs), all the while the task of envisioning a product, the risk of starting a company, finding investors, hiring, marketing, coding the app/site, etc are all done by the OTT player. In case of apps, there is also the cost of revenue share with the app store (which affects the OTT and the TSP is shielded from).
It is evident that in the long term, TSPs will stand to benefit more and more from increased data usage (based on usage of OTT services which they didn’t have any hand in building). This renders the primary argument of TSPs (that OTT players are taking advantage of TSP infrastructure while giving nothing in return) as nothing but an ineffective argument at best, and an untruth at worst.
This is evident in how much TSPs have benefited from increased data usage which OTT players provide.
Vodafone recently posted a profit owing to higher call rates and increased data usage. Airtel also recently posted a profit, in a major part owing to a surge in data revenue. Idea recently posted a profit, partly owing to it’s data plans attracting more users. MTS India posted 15% growth in revenue in Q2 2014, attributing growth in data revenue as the primary reason.
According to Gartner, by 2017, mobile apps will be downloaded more than 268 billion times, generating revenue of more than $77 billion.
To repeat, Increase in data revenues is more than sufficient to compensate for this impact, especially in the long term.
No. There are multiple problems associated with such a thing. The problems are discussed in answer to the next question. Furthermore, judging by the rates network operators charge mobile VAS services - (typically 60-70% of their revenues being payed to the network operator which has forced indian VAS players to look outside India for survival), it is evident that network operators will try to adapt a similar pricing strategy for OTT players - thereby further harming the web ecosystem, and making the barrier to entry for a successful entrant unnecessarily high (just like they have done with VAS services). Once again, nobody apart from the TSP benefits from this arrangement.
By the way, sites like Google for example, already pay ISPs for bandwidth.
As mentioned in the answer to question 3, compliance would be very hard to enforce. It would probably be arbitrary and inherently unfair to those who would be required to pay (vs those who won’t pay).
Apart from that problem, it would also increase the cost of doing business by a very big margin. As of March 2015, there are 10 different mobile network operators in India, and at least 48 different national or local ISPs operating in India, according to the Internet Service Providers Association of India. This would mean that if tomorrow all those players wanted to have their own rules for paying data charges to network operators and ISPs, then just for one site (say Google), would need to talk to roughly 10 different TSPs (and if this trend spills over to ISPs as well, which I would expect in due time if this measure is passed through, then it would be a total of around 58 different entities), just to ensure a fast and decent experience. Even if they can pay the money, some OTT players may just not find it worth the effort to talk to all those entities to ensure the best experience (keep in mind these charges would vary from company to company and the agreements would need to renewed every year or a few sets of years.) In the cases where negotiation is not required and all operators just have a simplified per/TB plan for OTT players, even then some OTT players will not find it worth their time, effort or money to go ahead. All this would mean either a reduced experience for the end-user (because of denial of high speed to the site) or no access to the site at all (in the cases where OTT players block access to certain regions or ISPs to avoid paying data charges). Please keep in mind that in this case, the end users (who are honest, paying customers, and who are not at fault here) would suffer greatly, though no fault of their own.
The scenario possible is that Operators could effectively block a major website. Consider a scenario where TSPs require Wikipedia (which is one of the largest sites in the world) to pay a data charges. Wikipedia has a lot of traffic, and this, would need to pay a lot. However, it is a non-profit, and funded by donations over the world. It would be economically unsustainable for them to pay for data charges to ISPs and thus would have no choice but to block their site in India. Even if they do somehow find the funds to pay for data charges to TSPs, their donors from around the world might not take too kindly to the fact that most of their donations (which come from all around the world) are going to India in the form of data charges to ISPs. This might effect their funding, and even put the future of the site in risk. That entire wealth of knowledge and information might be at risk.
As you know, making a social media site successful is a huge task, and very few people have been able to crack how to do it. Part of what makes a site gain momentum as a social media site is also how many of your friends and contacts are already joined over there. If a TSP has a vested interest in their own fledging social media site, but faces competition from a OTT player like Facebook, then all they need to do is to impose an arbitrarily large data charge on Facebook. In effect, either Facebook is slow to users in comparison to the TSP owned site and users flock to the latter, who Facebook loses millions, once again hurting the company, which the TSP gains and can now put into their own site, or Facebook blocks access to users of the concerned TSP. In none of these cases, does the end-users gain anything of consequence, in fact, in most of these case, the end-user will suffer.
The Indian IT Act already addresses these concerns. Law enforcement agencies and the Home Ministry already have procedures in place to deal with this - the role of regulation here will both be unnecessary and unenforceable, especially for OTT Players outside the country.
The best and the only feasible way to ensure security concerns is to let law enforcement agencies do their job. Ironically though, if net neutrality is not respected, it would lead to additional privacy concerns as TSPs would most likely need to look into data packets in a process called deep packet inspection. In the United States, deep packet inspection requires a court order.
India already has a bunch of contradictory policies and regulations on things like the level of encryption online services need to have. We need to simplify these (acting in co-ordination with all the agencies concerned) rather than add another set to the list.
In today’s times, it is important for end-users to know whether a site uses HTTPS or not, as if it does not, it makes the site more vulnerable to attacks. In a web browser, a user can easily see whether the site uses HTTPS or not, and based on that, make an informed choice on whether to continue on the site or not.
However, in (non web browser) apps, there is seldom a way in which the end-user can know whether the communication with the server is done using HTTPS or not. I propose that we ask apps to mention it in their ‘about’, ‘help’ or other such page or section to mention whether the app uses HTTPS or not. If there is no such section in the app, then it should be clearly mentioned in the app’s page on the app store, as well as the companies own website, whether the app uses HTTPS or not.
This would help a user make an informed choice on whether they should trust the site or not.
Question 8: In what manner can the proposals for a regulatory framework for OTTs in India draw from those of ETNO, referred to in para 4.23 or the best practices summarised in para 4.29? And, what practices should be proscribed by regulatory fiat? Please comment with justifications.
ANSWER: As already answered, NO regulatory framework is required which violates Net Neutrality.
Question 9: What are your views on net-neutrality in the Indian context? How should the various principles discussed in para 5.47 be dealt with? Please comment with justifications.
ANSWER: A FREE and OPEN Internet is a pillar of democracy and our fundamental rights. Internet service providers and governments should treat ALL data on the internet EQUALLY, not discriminating or charging differentially by user, content site, platform, application, type of attached equipment, or modes of communication.
Question 10: What forms of discrimination or traffic management practices are reasonable and consistent with a pragmatic approach? What should or can be permitted? Please comment with justifications.
ANSWER: Any kind of traffic discrimination or management practices should never violate principles of Net Neutrality. And TSPs should be completely transparent about their traffic management principles.
Question 11: Should the TSPs be mandated to publish various traffic management techniques used for different OTT applications? Is this a sufficient condition to ensure transparency and a fair regulatory regime.
ANSWER: Again, any case by case traffic management of OTT applications, even if it is transparent, violates Net Neutrality. So, this question won’t arise if TRAI ensures Network Neutrality.
Question 12: How should the conducive and balanced environment be created such that TSPs are able to invest in network infrastructure and CAPs are able to innovate and grow? Who should bear the network upgradation costs? Please comment with justifications.
ANSWER: Free market forces should allow TSPs to reach a price-point where they can profitably invest in network infrastructure. As a municipal water supply does not charge companies making washing machines and does not tax people for using these machines, similarly OTT players should be given a free market to flourish.
No.
The biggest problem is discrimination itself. Whether it is a price based or a non-price based discrimination does not change that it is still discrimination. This pitfalls of discrimination has been communicated in answers above.
Question 14: Is there a justification for allowing differential pricing for data access and OTT communication services? If so, what changes need to be brought about in the present tariff and regulatory framework for telecommunication services in the country? Please comment with justifications.
ANSWER: Again, DO NOT violate the principles of Net Neutrality.
Question 15: Should OTT communication service players be treated as Bulk User of Telecom Services (BuTS)? How should the framework be structured to prevent any discrimination and protect stakeholder interest? Please comment with justification.
ANSWER: ALL data on the Internet is EQUAL. ALL bits are bits, NO need to segregate OTT players. TSPs need to focus on improving their existing products and quality of service.
Question 16: What framework should be adopted to encourage India specific OTT apps? Please comment with justifications.
ANSWER: Ensure that the principles of Net Neutrality are upheld. TSPs with vested interests should NEVER be able to impede consumer access to any app.
Question 17: If the OTT communication service players are to be licensed, should they be categorised as ASP or CSP? If so, what should be the framework? Please comment with justifications.
ANSWER: Again, NO regulatory framework required. NO segregation of OTT players required. NO traffic discrimination required. ALL bits are bits. DON’T hamper industry growth. Uphold Net Neutrality.
Question 18: Is there a need to regulate subscription charges for OTT communication services? Please comment with justifications.
ANSWER: Again, NO regulatory framework required. DON’T hamper industry growth. Uphold Net Neutrality.
Question 19: What steps should be taken by the Government for regulation of non-communication OTT players? Please comment with justifications.
ANSWER: Again, NO regulatory framework required. DON’T segregate or discriminate OTT players. DON’T hamper consumer choice. DON’T hamper industry growth. Uphold Net Neutrality.
Yes. There is international precedent in allowing net neutrality.
Brazil, Chile, Mexico, Netherlands, Slovenia, Peru and Japan have adopted rules in favour net neutrality. Norway’s regulator NPT also favours net neutrality.
Perhaps the most note-worthy would be the United States, where The President of the United States of America, Barack Obama, has constantly expressed his commitment to net neutrality and the Chairman of the United States FCC (Federal Communications Commission) Tom Wheeler has recently spoken out strongly in favour of net neutrality.
Just reading Tom Wheeler’s full text on the question of net neutrality and the future of internet regulation will answer many of the questions asked in the TRAI consultation paper. I would recommened everyone to read it. As mentioned in my response to question 8, the fact that the FCC created this draft in the first place, and the US Obama administration backing it, is a clear sign in favour of net neutrality there, despite it being in draft stage (as it is a recent development).
United Nations Special Rapportuer on freedom of expression lauded United States FCC move in favour of net neutrality, mentioning the following:
It is especially important that the new rules prevent ISPs [internet service providers] from discriminating against some types of content in favour of others, either by slowing down delivery speeds or by creating a fast lane to ensure quicker delivery for only some content providers that have paid extra fees.
- David Kaye, The United Nations Special Rapporteur on freedom of opinion and expression.
Foregoing network neutrality will lead to a “balkanization” of the internet, where one TSP provides users access to fast access only to a very limited set of online services. Network operators in the past have created such walled gardens where only a certain set of services work in their network and not much else. With the internet we were finally free from such a walled garden approach, but if net neutrality is not respected, then once again we might face a similar situation where only a few services work effectively, and others become unusably slow. Today a lot of government services are also online, and differential pricing might effect it too. It will hurt funding for startups, and harm the promising but sensitive startup ecosystem in India. Businesses outside India might think twice before offering their services in India owing to additional costs and effort. None of this will benefit anyone apart from TSPs in the long term, and will lead to long term damage to society.
All this might lead to a new kind of “Digital Divide” in India, running counter to, and hurting Prime Minister Modi’s Digital India vision. It is because of all these reasons that I urge the TRAI to not have regulations on OTT players and make sure that discrimination (whether price based or non-price based) never happens in India.
This vision of a Digital India can only succeed with an open internet ecosystem with network neutrality fundamental part of it. Whether it is the postal worker in a city confirming directions on a map service, or a child studying in a poor village looking up educational videos, or a farmer looking for critical weather information, or a small town shop owner who simply wants to message and send visual details about the product he’s selling to another customer - we don’t want them all to suffer just because their network operator didn’t happen to have made the proper deal with whatever critical service in question.
Network neutrality will make sure all of India can progress together, united.
I would like to conclude by once agin re-iterating an important quote by our current Union Telecom Minister.
--For India, net neutrality is very important.”
- Hon’ble Union Telecom Minister Mr. Ravi Shankar Prasad.