By D Manjunath and V Sridhar
Network neutrality debates have been raging in the US, and even comedy shows are chipping in with their tuppences. However, this debate has slipped through the cracks in Indian telecom policy debates. A recent seminar organised by Trai on regulating over-the-top (OTT) services is a welcome first step. Net neutrality means a service provider (SP, or the telco) needs to treat all data bits in the same way irrespective of their source, destination and the application that generated these data bits.
Also, the SP is not supposed to charge for content provider traffic if the content provider (CP) is not directly connected to it. Courtesy neutrality, applications such as Skype and companies like Facebook have established themselves. There are three parties on the net: SPs, CPs and users. The SPs connect the eyeballs to the net via a fixed charge or a volume-based usage charge.
The CPs keep them on the net and also earn money through advertisements and subscription charges. The SPs can have two grouses. Firstly, they believe that applications such as Skype and WhatsApp are eating into their revenues. An immediate challenge is that these applications have opened up new communication channels and tapped a new demand. Regular users of WhatsApp and Skype will be sympathetic to that view.
The second issue SPs raise is they put up the communication resources to deliver content to the users with acceptable quality of service, thereby enabling the OTT services. But they don't get the revenue windfall that CPs and OTTs reap. However, its quality hinges on how the SPs want their slice of the pie. Several ways have been suggested for the telcos’ share of the CP revenue.
The CP can have a fee-paying agreement with the telco to carry its application data. This could typically also mean that the telco will give preferential treatment to packets from CPs that have an agreement with it and potentially throttle packets from competing CPs. In fact, there is a sneaking suspicion among many users that some WhatsApp messages are inordinately delayed by the SPs.
Of course, the flip side, is this stifles new services and innovation. In fact, high entry barriers and extreme pricing by telcos to provide applications have been a hurdle for many small and emerging app providers. In the pre-smartphone era, the telcos paid out meagre sums to value-added service providers, destroying them.
An alternative would be for the telco to charge every CP uniformly. This would mean that even if a CP is not connected to the given telco, the CP has to pay 'carriage charges'. Most analyses seem to suggest that the user is expected to come out as the loser. While the network neutrality debate is yet to take shape in India, some recent developments signal interesting times ahead.
COAI has fired the first salvo that OTT and other content providers should make extra payments to mobile operators. In a related development, one SP has advertised higher-quality YouTube videos as a premium service, a clear violation of net neutrality principles. Some other SPs have announced their own app and content stores, indicating a vertical integration and a possible continuation of telco's power in the last mile. Trai was quick to refute telcos' demand to charge OTT and content providers.
That's commendable, but it is time to write a suitable net neutrality law. As wireless broadband takes off, clarifying the legality of such discrimination will become important. These developments would lead to smart data pricing that is transparent, does not discriminate content, offers flexibility to users in terms of access and costs, and yields a reasonable return on investment to telcos. This, in turn, would be fair to all the three parties: SPs, CPs and to us, the end-users.
(D Manjunath is faculty at IIT-Bombay and V Sridhar at IIT-Bangalore)
Network neutrality debates have been raging in the US, and even comedy shows are chipping in with their tuppences. However, this debate has slipped through the cracks in Indian telecom policy debates. A recent seminar organised by Trai on regulating over-the-top (OTT) services is a welcome first step. Net neutrality means a service provider (SP, or the telco) needs to treat all data bits in the same way irrespective of their source, destination and the application that generated these data bits.
Also, the SP is not supposed to charge for content provider traffic if the content provider (CP) is not directly connected to it. Courtesy neutrality, applications such as Skype and companies like Facebook have established themselves. There are three parties on the net: SPs, CPs and users. The SPs connect the eyeballs to the net via a fixed charge or a volume-based usage charge.
The CPs keep them on the net and also earn money through advertisements and subscription charges. The SPs can have two grouses. Firstly, they believe that applications such as Skype and WhatsApp are eating into their revenues. An immediate challenge is that these applications have opened up new communication channels and tapped a new demand. Regular users of WhatsApp and Skype will be sympathetic to that view.
The second issue SPs raise is they put up the communication resources to deliver content to the users with acceptable quality of service, thereby enabling the OTT services. But they don't get the revenue windfall that CPs and OTTs reap. However, its quality hinges on how the SPs want their slice of the pie. Several ways have been suggested for the telcos’ share of the CP revenue.
The CP can have a fee-paying agreement with the telco to carry its application data. This could typically also mean that the telco will give preferential treatment to packets from CPs that have an agreement with it and potentially throttle packets from competing CPs. In fact, there is a sneaking suspicion among many users that some WhatsApp messages are inordinately delayed by the SPs.
Of course, the flip side, is this stifles new services and innovation. In fact, high entry barriers and extreme pricing by telcos to provide applications have been a hurdle for many small and emerging app providers. In the pre-smartphone era, the telcos paid out meagre sums to value-added service providers, destroying them.
An alternative would be for the telco to charge every CP uniformly. This would mean that even if a CP is not connected to the given telco, the CP has to pay 'carriage charges'. Most analyses seem to suggest that the user is expected to come out as the loser. While the network neutrality debate is yet to take shape in India, some recent developments signal interesting times ahead.
That's commendable, but it is time to write a suitable net neutrality law. As wireless broadband takes off, clarifying the legality of such discrimination will become important. These developments would lead to smart data pricing that is transparent, does not discriminate content, offers flexibility to users in terms of access and costs, and yields a reasonable return on investment to telcos. This, in turn, would be fair to all the three parties: SPs, CPs and to us, the end-users.
(D Manjunath is faculty at IIT-Bombay and V Sridhar at IIT-Bangalore)
