The basic principles

DoT paper makes a start on net neutrality

The recommendations of the committee set up by the department of telecommunications, or DoT, to study "net neutrality" might indicate the likely thrust of future policy in this area. The paper starts by defining what policy-makers understand by net neutrality and says India should not allow blocking, throttling or prioritisation of data on networks. India is an exceptional case. Although less than 25 per cent of Indians are online, and wired broadband penetration is minimal, India has the third-largest internet surfer base in the world. Mobile internet growth will be explosive, given rising smartphone usage and strong data consumption trends. Net neutrality is defined and tackled differently in different jurisdictions. Telecommunications companies, or telcos, deliver voice and internet services. So-called "over the top" (OTT) players use the internet to deliver many services, including Voice over Internet Protocol (VoIP) video-calling, and instant messaging. These may compete with telcos' voice and text message offerings. Telcos may try to discourage this by charging higher rates for VoIP. Telcos may also try to create alternate revenue streams via alliances with OTT players, social media networks like Facebook, app-makers and e-commerce players. Access to the telcos' partner-websites may be provided free, in "zero-rating" plans. Such revenue models require distinguishing the nature of data packets, to give priority to specific data. It is technically necessary to distinguish data-types anyhow - video streaming for example, requires higher priority than emails. But telcos could cause harm by giving unfair priority (or conversely, deliberately throttling) specific data. While it may reduce costs to consumers, it may also hinder competition and innovation. It might also place restrictions on freedom of speech or communication and consumer choice. The concept of net neutrality involves regulating to prevent such possible abuses, to ensure data transfers remain neutral insofar as feasible.

The paper says traffic management is legitimate. But it may not be app-specific and deep packet inspections (to identify specific content) should not be used. The regulator will deal with complaints about net neutrality violations and zero-rating on case-by-case basis. Tariff plans will be deemed approved unless disqualified within a specified time. Positive discrimination may be allowed (maybe to deliver free access to government sites). There is criticism of Internet.org, the Facebook initiative to create a subset of sites, which can be surfed for free. (RCom is the only Indian telco offering Internet.org). But the paper is silent on the Airtel Zero initiative, which also offers free surfing of certain sites.

Licensing is suggested for domestic VoIP services. But there will be no licensing for international VoIP, or instant messaging, and other apps. Domestic VoIP licensing may be contentious. The paper assumes telcos lose revenue as domestic voice calls gravitate to VoIP. Others argue that cheap VoIP has created fresh demand in a price-elastic market and this generates data use. On privacy, while admitting that privacy concerns and search neutrality (where search engines provide impartial results) are important, the paper advocates waiting for a privacy law. It makes no recommendations in either case. In sum, this paper represents preliminary engagement with some complex issues. It is useful that it has articulated the first principles. But many details must be clarified to avoid confusion and inconsistency. It is vital to avoid distortions, which could be perpetrated and magnified as the market grows.