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Last week, MediaNama submitted its counter comments for the TRAI consultation on Free Data issues of Net Neutrality, countering claims made by telecom operators on the Net Neutrality issue of discriminatory / differential pricing, and the related issue of Free Data. Excerpts of our counter comments are below. The entire submission may be read here.

Select excerpts from the initial comments

  1. A reading of regulatory filings from telecom operators over the years will point towards the use of:
    • An appeal to emotions (farmers, education, fishermen in Kerala), whereas their primary responsibility is to investors.
    • An appeal to fear (privacy, national security concerns because of unlicensed companies)
    • A fallacious cry for help (telecom operators have been voicing worries about bankruptcy and debt for over 10 years, despite many of them being profitable, and sustainable).
    • A fallacious claim of unfair treatment: while they benefit from spectrum auctions which allows them exclusivity in terms of usage of spectrum and provisioning of access, they invariably complain of having to pay too much, and having paid, of seeking preferential treatment.Anything out of this standard playbook ought to be ignored, since it is disingenuous.

2. In particular, we’d like to point out that Reliance Jio is conspicuous by its silence, and we’d like to remind the TRAI of its submission last year, wherein it asked for:

    • Bringing online (OTT) services under the regulatory framework
    • Bilateral arrangements between stakeholders, such as TSPs and content providers, in terms of commercial and technical arrangements.

Reliance Jio is offering several of its own communication and content services, and given that they have extensive spectrum and bandwidth, and are planning to offer high speed low cost Internet, care, in particular, that policy does not allow discriminatory practices from such a potentially dominant player.

Select excerpts from counter comments

  1. Airtel: “there is a myth that TSPs may act as a Gatekeeper and compromise the growth of some content providers or affect their level playing field or freedom of Internet as they are holding a valid telecom licence and conduct their business under a regulatory framework.”MediaNama’s response:
    To say that service providers won’t act as gatekeepers is an outright lie: to quote Netcore CEO Rajesh Jain in 2009, whose services were blocked by Vodafone because MyToday’s services competed with Vodafones VAS SMS services:

    • “Today’s Business Standard has an article about Vodafone blocking our shortcode to stop people from subscribing to our (MyToday) opt-in SMS services. The real unstated reason for the block is that Vodafone believes our free SMS services are competitive to their paid services (Vodafone Alerts). So, rather than let the market and consumers decide, they chose the path of blocking a service which has grown word-of-mouth to 3.8 million subscribers in India in the past two years.”
    • “Since about 18 months ago, Vodafone has blocked access to our mobile portal (http://mytoday.com) for their Vodafone Live subscribers (which comprise the bulk of the GPRS subscriber base”
    • “Talking to Vodafone is nigh impossible — their pre-condition is we shut down the free SMS services.”

    Lets not forget that Airtel blocked MyToday as well. In all these instances, and some of those mentioned below, the failure of the TRAI as a regulator to prevent gatekeeping and discrimination is evident. We don’t believe the TRAI is equipped to deal with each and every instance of violation, or on a case by case basis, as is also evidenced from its failure in preventing VAS fraud and SMS spam, despite having regulations and a complaint mechanism.

    Airtel has Wynk Music, and its sister concern Hike is a messenger service. Reliance Jio has its own movies, music and news apps. Idea is also planning its content services. Remember that Measurement Lab had also reported that Airtel and other ISPs had been throttling BitTorrent traffic in India for years (read).

    We really can’t prevent TSPs from integrating vertically and starting online content services, but we can remove a gatekeeping role, and ensuring a level playing field via net neutrality.

Other comments from us:

  • Telecom operators have a history of discriminatory behavior.
  • Licensing does not give telecom operators right to provide discriminatory access to the Internet. They have sufficient exclusivity by virtue of licensing and exclusive access to spectrum, and they get paid by users for this access.
  • The regulators does not need to manage online platforms, but it can control the way telecom operators disburse data to platforms and recharge providers.
  • It is not the TRAI’s mandate to compromise a users free speech to address poor business practices from telecom operators.
  • The TRAI should seek evidence from telecom operators on growth of various Internet services on their platform, and compare zero rated services such as Facebook, Whatsapp and twitter, with the growth of comparable non zero rated services such as WeChat, Line etc. This evidence must be put in the public domain.
  • It is impossible to measure the impact on innovation owing to discriminatory practices, because we will not know of a service that did not launch.
  • Disclosures are not a substitute for prevention of discriminatory practices, and not sufficient either.
  • Disclosures do not address issues of gatekeeping and discrimination, such as favoritism and collusion, bribery and corruption, additional cost of negotiation. Disclosures have not been made historically.
  • Zero rating, including toll free data, prevents permissionless innovation and hurts Indian startups and users alike, because they create a distinction between paying and non paying creators (all users are creators).
  • The idea that telecom operators care about user privacy is laughable. They would happily sell user data for money, or allow advertisers access to users and usage data, as MTNL and BSNL apparently do.
  • The idea that this is merely a competition issue is myopic, because it views the Internet purely as a business medium where competition might be a concern. The fact is that a majority of the content and services on the Internet are user generated, and generated not as a business, but as freedom of speech and expression. Thus, to limit this merely to the idea of competition is false.
  • FRAND principle for zero rating: The FRAND principle is discriminatory, in that it creates a threshold in terms of whom it will be applicable to: only those who can negotiate and work with telecom operators. Those who can’t pay, won’t be heard or given a chance to participate in terms of creating Internet services or content. This disadvantages small startups, small businesses, and anyone who doesn’t have money. The problem doesn’t go away just because someone is willing to pay money, or willing to deal with telecom operators. Also, allowing telecom operators or platforms to do zero rating, with direct deals between telecom operators and zero rating platforms, creates incentives for keeping bandwidth caps low, to make it attractive for application developers to pay or zero rating. As indicated in our differential pricing submission, there is evidence of this from the EU.

Much more in our filing here.