This is a part of our ongoing coverage from presentations and comments made at the TRAI seminar on regulation of Internet services, held on the 5th of August 2014 in Delhi. Check our entire coverage here. Please pardon the typos. Some statements are paraphrased, and some comments may have been missed:

I’m shocked that you’re asking this question – What is net neutrality? What is Freedom of speech? Sir, Net neutrality stands for: anyone who is offering anything on the Internet, it is available to every user, without discrimination of the source – without limiting, throttling or restricting one service over another. That is what is expected. I understand that there is a business case of networks going through some stress because some services take more bandwidth than others. This is something that is a business discussion. When TRAI defines Quality of Service (on voice), everyone is able to make a phone call to everyone. Not certain number of people able to call certain other people, but everyone should be able to call everybody. – Vijay Shekhar Sharma, One97

We never asked to ask the regulator to dictate a revenue share. The example which I quoted was a Google-France Telecom example, which is bilateral. Point number two, we never asked for any protection. All I am saying is that there is a market failure. I am subjected to various regulations, payments and obligation imposed on me, and I cannot compete. I am the backbone on which these services exist. They can’t exist without the backbone. That is the definition of market failure. It’s very simplistic to say, but if you think the government is going to give up eight streams of revenue overnight, saying that you telcos don’t need any security clearances, you don’t need any approvals, it is something that is removed from reality. We need to have a partnership. Lets discuss. What we want the regulatory oversight – to dictate the broad policy norms. A light touch indication. We have to go a long way, but there has to be a recognition that there was a market failure. That is why our CEO’s went to Dr Khullar for some way forward. – TV Ramachandran, Vodafone India

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“OTT name itself tells what it is. If you sell a service which is same as the bearer itself, that is what is OTT. When you sell music over SMS or voice, that is never called OTT. But when you sell telecom service over the Internet, that is OTT. When you sell messaging, which is an application of telecom, voice, which is an application of telecom, when you sell multimedia message, which is a replication of telecom, that is OTT. It’s a telecom application being provided over another, neutral telecom network. That is why it is called OTT. OTT is a well accepted terminology across the globe. As far as it is being portrayed that telecom services are going after the App economy – no, no telecom operator is doing that. The App economy is being promoted by telecom operator. Most of the VAS operators are content partners with the telecom operator. This cannot be compared to the utilities like power and water utilities, because power and water are one way services. Telecom bearer network is a two way network, in which the user can also send communication. It is a direct competition. That’s where the issue comes.”

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“One of the leading operators said that 30% of revenue is from data, and income growth is 60%. People are saying that Whatsapp has eaten the operators SMS volumes, but they are ignoring the fact that Whatsapp encourages people to pay Rs 100 every month. Which is additional revenue for the operator. If volumes are high, what’s wrong with being an access gateway and charge for it? Improve services.”

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What you’re talking about here is not “OTT” but the regulation of the Internet. We are talking about metering or when you start talking about splitting the web into pieces of content and charging separately for content, you’re entering into the freedom of speech domain. Today, if there is a media publication that partners with a telecom operator for preferential access, it again impacts the ability of communication, sharing content and views. I also take slight umbrage to the point that Siddhartha Roy raised about partnering with telecom operators for free services. In India, it’s not a problem of throttling or the speed of access. It’s a problem of cost of access. If you want a neutral Internet, and ensure that each service is being consumed by someone, by choice, is treated equally, you have to ensure that there is pricing parity. You have to charge consumers by price of data, and not by services. This entire move of trying to split the Internet into pieces of content is taking us in a direction where someone who is willing to pay, will find that a substandard service will win over a better service (because of free access). The freedom that the Internet has given us, is to allow us to choose what we feel is the best service for us, at a personalised level. The consumer point of view is being lost in this discussion. – Nikhil Pahwa, MediaNama

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In data, it will have different colors. When two datacenters are talking to each other and one doesnt want to carry traffic, they increase the price so the traffic goes off-route. This is why AWS is blocked from Indian datacenters, because there is a communication gap between the two. – Vijay Shekhar Sharma, One97

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“The consumer looks at it from one perspective – what’s in it for me? That is the piece we have to understand. He has chosen us. He wants our service, for which we put a price out there, be it, the carrier putting the price, the service provider putting the price, or the transaction ecosystem putting the price. All our products and services have to create value, in terms of what’s in it for him. To do that, we might choose to do data bundles, micro charging from a wallet perspective. That is a consumer making that choice. It goes back to the right for the consumer to make that choice. The consumer accessing the content has to be secure, because it is the consumer making that choice, and the freedom of access for the customer for the entire value chain, which is key to this entire discussion. Neutrality of Internet has to be there for the consumer to make that choice.” – A comment from the audience

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“Don’t you think it is the other way around? If there is a network neutrality regulation, network providers like Airtel will be forced to not discriminate against content providers. It’s a simple case of content providers free riding on their channels. Where is the scope for the telecom operators to innovate? – an audience member

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“The potential for both freedom of expression and innovation exchange that the Internet provides, both in broadband and wireless. I believe that that is a principle that the government and the regulator have to keep in mind when creating regulatory frameworks for telcos, OTT services, more innovators and other consumers. Whether we are teleocm operators, regulators or just consumers, the delivery of these services is individually coming to each of us. And, given the single interoperable nature of the Internet today, this is a principle that must be kept in mind.

Right now, consumers do pay. We do pay through data charges, and these charges are increasing every day. They’ve increased to rs 4-5 per mb. When considering revenue partnerships that OTT services have to pay for to telcos, there will be millions of consumers that will be impacted. They may not be able to pay that price, and get their apps online and across the world. For innovation and information and exchange throughout the world, we have to keep in mind. If there are regulatory frameworks, then perhaps the answer is in deregulation.” – Geeta, CIS

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“The TSP (Telecom Service Providers) are worried about – I have network costs, regulatory costs, service costs, and then only can I provide voice service support. Someone comes and provides voice free of cost, because he’s not concerned with all these costs. Do you allow it, or what do you do?” – TRAI executive

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“When the Internet was provided 10 years back, I was still paying for Internet charges. Whatsapp as an ecosystem, provides a consumer with access to contacts, the way a messenger does on the web. On Yahoo messenger 10 years back, I had access to send audio, video, text, and I was paying through the access that was provided. I was paying my operator to provide me that. The operator was saying that if you want me to pay more, I was paying more. As access grows, data consumption for the telco will grow. Without the telecom ecosystem as a part of the larger ecosystem, we will not have the scale that we’re seeking. In the most connected environment, they’ve been able to get netflix because it had the single largest physical wallet out there. They moved the service to digital. Consumers were using that, and the service was digital. I will be paying my telecom provider for the usage, it could be Rs 100 or 500, or a bundled pack.” – Siddhartha Roy, Hungama.

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It’s $600 per month here, if you look at Internet costs, in terms of purchasing power parity. It’s unaffordable today, and that is why the pie is not increasing.”…”If you go to China, Facebook is not allowed. They have their own social networking app. They’re completely closed and decide to do what they want. The other model is that we are completely open, but even in the US, it is not completely open, say with Akamai and Yahoo. If a guy in Sri Lanka is downloading content, his GIF images are cached, access is faster.” “If you want the message to go faster, you pay more. You want to use the freeway, pay the toll. But it’s too early to figure this out. Just last two years the data has been growing. We have just figured out this zero rated model. There are friends of mine who are starting up and they figure the zero rated model works for them. He’s talked to all the telecom operators and decided that he will pay for the data. It’s too early for us to figure out.” – Ravi Sundararajan, COO, Webaroo

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“We have to appreciate each perspective and go forward. We are not afraid of OTT. We admire them. We all will have to learn how to coexist. I would submit to my speakers here – you come and ask any one of us carriers that what matters is customer experience. It is rather naive to suggest that method of access doesn’t matter. We are a dumb pipe, but we are more than that also. Today, you go back 20 years and do a dialup an Internet connection. Mobility has a value which the mobility players have brought. Take away mobility, how many of us will have access? The Fixed Line connections are dwindling.” – TV Ramachandran, Vodafone

“OTT is here to stay and we have to find a way to figure out how to co-exist. The timing of this seminar is important. This has been brought out because it’s an increasingly an area of pain. It’s not about customers and Quality of Service. The fundamental issue is that a 2G network, a standard voice network, is switching to a non voice network, and the speed at which it is switching, and the investments that it is requiring, are humungous. The quantum of spectrum required to feed this need currently doesn’t exist. And therefore, there needs to be some kind of tabulation, in terms of who gets what first. When we go to a dining table, and there is a buffet laid out, it’s eat as much as you can. At the end of the day, everybody knows that everybody eats only a certain quantity. Now, the objective of regulation is to understand if there is a need. There is a need to create an environment where the regulator becomes a facilitator to allow the end consumer to benefit, the operator to grow and India to develop and globalise. These are all motherhood statements, but what I’m saying is that there is a place that the OTT has and a place that the OTT has. Riding for free on our network puts a certain amount of strain on our network. That has to be admitted. With that background, this particular discussion needs to be fair and frank, from the standpoint of providing equal competition. They’re reaching out to my customer with a capability which I couldn’t provide. But, don’t take my cake away from me. I have to survive as well.” – Rajat Mukherjee, Idea Cellular

Regulatory environment needs to take into account whether or what you should regulatre, but also when you should regulate. What is the criteria to determine whether something needs to be regulated. Whether your purpose is best served by direct or indirect regulation, ex-post or ex-anti regulation (before or after the event) – Mahesh Uppal, Telecom Consultant

Telcos speaking of free riding on their networks and the incentive for Internet network investments. I think it’s important to remember that it is not free riding. Consumers pay for data usage, for whether it is voice, video, there are certain – whatsapp, skype or video – we pay for it via data usage. The second is that it is important to remember that revenue loss and revenue gain for OTT services: Existing services that telcos provide, which are voice and messages, which are being taken over by OTT services. The second is the innovation that the Internet provides because it is a free and open medium. Low budget and free and open software is permitted on the medium because it is a free medium. I think these need to be understood separately, and revenue loss and new revenue as a free and open medium, which is a free and interoperable space. I think that needs to be taken into account. There is a platform for collaborative innovation, not just a revenue share arrangement. When the Internet developed and telco networks like AT&T and others grew and changed and provided other services – Geeta, CIS.

“From a monetization perspective on how operators can make money. Today we have deep packet inspection and big data. I know about individual consumer preferences, and convert this data through mobile API’s for content providers, so that OTT providers can give context specific content, and the operator plays a role in bringing the right content to the right user, and charging. This leads to a digital wallmart, and a multi-sided business model, where the operator makes money from the consumer and from advertisements. The point here is that from a regulatory framework this might involve deep packet inspection, and whether an operator is allowed to do DPI or not. Even if Net Neutrality is allowed, the EU has allowed tiered services. In case we are moving towards free roaming, there needs a cap or a fair usage policy. These could be considered.” – A comment from the audience

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“Why is there no innovation on the Telco front? Because security clearance takes three months”- A comment from the audience

In response, CS Rao: “The innovation that you think we are not doing is about the look and feel. As telcos, we are here to offer a network which is capable of handling various applications and device platforms and should be capable of handling the scaling capability of the apps and devices and IP sessions that we need to handle. There is a hell of a lot of innovation that we are handling there. We are not creating a whatsapp, but that’s where we need to think. The examples in Telefonica, KDDI, we need to come up with competing services, in the telco OTT model.”

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“Do we have a clear cut model for revenue shares, or do you have a USO fund of kind of model to fund the network, so that the network is strong enough to sustain multiple OTT’s?” – A question from the audience.