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India’s Draft National Telecom Policy 2011: What’s In It For Startups, Content & Service Providers

As a part of our ongoing series on the Draft National Telecom Policy 2011 (NTP 2011), we now look at the policy recommendations around content and services. 13 days are left for you to recommend changes to the NTP-2011, so please do submit your responses here. Our previous posts focused on NTP 2011 and broadband and a very important change around the licensing framework which could unshackle the content and services ecosystem, by separating content and services from carriage. Key content and services related provisions:

– Consumer Protection: “To undertake legislative measures to bring disputes between telecom consumers and service providers within the jurisdiction of Consumer Forums/ Consumer Protection Act.”

Our Take: A much needed change, since false billing is pervasive in the Indian market. Frankly, is the Consumer Forum is a position to handle the volume of complaints?

– Vernacular Content Creation: Much needed policy change, but one has to wonder how the government will actually “To stimulate the demand of broadband applications and services, work closely with Department of IT in the promotion of content creation particularly in vernacular languages which would enhance the investment in All-Internet Protocol (IP) networks including NGN.”

Our take: As we’ve said before, more Indic language content needs to be digitized and distributed, but above all, there needs to be work on content creation tools. There is no clarity on what what the DIT will do to enhance content creation, or for that matter, if it can actually do something.

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– Value Added Services Focus: “To develop an eco-system for broadband in close coordination with stakeholder ministries to ensure availability of media for last mile access, aggregation layer, core network of adequate capacity, cost effective Customer Premise Equipment and environment for development of relevant applications. Regulatory policies to promote competition by encouraging service providers, whether large or small, to provide value added services under equitable and non-discriminatory conditions.” In addition, the policy suggests that the government needs to “To put in place an appropriate regulatory framework for delivery of VAS at affordable price, that can fuel growth in entrepreneurship, innovation and provision of region specific content in vernacular languages.”

Our take: We hope this doesn’t mean that the government will look to license Value Added Services, since a license – or even registration – will be an unnecessary step in the provisioning of services, and perhaps reduce the flexibility among VAS Providers to offer services. Also, the mention of  ‘affordable price’ is worrying, because it hints at price regulation, which is worrying because content pricing needs to take into account its value, and the cost of content creation.

– Location Based Services: “To mandate for mapping and submission of information of the infrastructure assets on the standards based inter-operable GIS platform by all telecom infrastructure/ service providers to the licensor.”…”To provide communication assistance to the Law Enforcement Agencies (LEAs) through regulatory measures in tune with national needs, keeping in view individual privacy and in line with international practices. To develop and deploy a state of the art system for providing assistance to LEAs.”

Our Take: MediaNama readers would know that there are pro’s (for LBS providers) and con’s (related to privacy) of this policy, and the Home Ministry has been looking to enhance its snooping ability.

– Government Services & Broadband: “To build synergies between existing, on-going and future Government programs viz e- governance, e-panchayat, NREGA, NKN AADHAR, AAKASH tablet etc. and roll-out of broadband.” and “- To encourage use of ICTs in prediction, monitoring and early warning of disasters and early dissemination of information.”

Our take: great idea – the government needs to set the pace when it comes to taking government services to the people, and different government bodies need to work together, not independently. We think government services will help consumers become comfortable with digital services, and perhaps open up the pipe for more.

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– Regulate carriage charges on basis of bandwidth utilization: “To put in place a framework to regulate the carriage charges, which are content neutral and based on the bandwidth utilisation. This will also encourage non value added services such as provision of data and information over the mobile platform.”

Our take: We support this recommendation. In fact, this is in line with recommendations that we had made to TRAI regarding dismantling the revenue share regime, and standardization and separation of billing for access and transactions. The draft NTP 2011 does not take into account transaction charges, which need to be addressed.

– Sales & Marketing Code: “To identify the performance standards and QoS parameters benchmarked against the best international standards and evolve suitable compliance mechanism in consultation with TRAI. To improve transparency, NTP -2011 recognises the need for formulating a separate Code of Practice for Sales and Marketing.”
Our Take: Needs to be made applicable to VAS billing, and just as importantly, click to charge advertising on mobile ad networks.

– Cloud Computing: “To recognise that cloud computing will significantly speed up design and roll out of services, enable social networking and participative governance and e-Commerce on a scale which was not possible with traditional technology solutions.”…” To identify areas where existing regulations may impose unnecessary burden and take consequential remedial steps for propelling India to emerge as a global leader in the development and provision of cloud services to benefit enterprises, consumers and Central and State Governments.”…”To adopt best practices to address the issues related to cloud services and M2M for example privacy, network security, law enforcement assistance, inter-operability, preservation of cross- border data flows to promote a global market for India.”

Our take: A policy on taxation, expecially when it comes to cloud computing, is much needed. Read: Taxing the Internet Economy.

– M2M Communications: To recognize the role of new technologies in furthering public welfare and enhanced customer choices through affordable access and efficient service delivery. The emergence of new service formats such as Machine-to-Machine (M2M) communications (e.g. remotely operated irrigation pumps, smart grid etc.) represent tremendous opportunities, especially as their roll-out becomes more widespread.

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Our Take: We think the policy is a little short sighted when it comes to M2M communcations – specifically when it comes to understanding the requirements in terms of IPv6 rollout. As more and more connected devices are rolled out, and security requirements will mean static IP addresses even for machines, more IP addresses will be needed. 2020 is too far off.

– Funding, Startups & Entrepreneurship: 
– To encourage the young entrepreneurs by making available needed funding (pre-venture and venture capital), management and mentoring support.
– To assist entrepreneurs to develop and commercialize Indian products.
– To create fund to promote indigenous R&D, IPR creation, entrepreneurship, manufacturing, commercialising and deployment of state-of-the-art telecom products and services. Emphasis will be given to creation of Indian IPRs which go into international standards as well as in product manufacturing in implementation of major programs and projects as a vehicle to develop Brand India.
– To facilitate soft credit to the Indian product manufacturers for domestic deployment and exports.
– To create a special purpose Telecom Finance Corporation as a vehicle to mobilize and channelize financing for telecom projects in order to facilitate investment in the telecom sector.
– To endeavor to include telecom sector projects within the ambit of financing from existing entities such as India Infrastructure Finance Company Limited (IIFCL).
– To rationalize taxes and levies affecting the sector and work towards providing a stable fiscal regime to stimulate investments and making services more affordable.

Our Take: As much as we’d like it, we’re vary of the creation of an Indian government supported fund for promoting IPR creation, simply because this looks like it might be another scam in the making. Countries like Israel, Singapore and Malaysia support local IPR creation and have even been eyeing the Indian market, but we’re not sure if any Indian government led venture capital investment can be without controversy. Policy initiatives such as tax concessions or monetary support for export (not outsourcing) related IPR initiatives will be welcome.

In conclusion:

The draft NTP 2011 does not look into making telecom networks more accessible to service providers, thus ensuring that telecom operators remain gatekeepers, and limit access to consumers for service providers. While it suggests that telecom networks remain non-discriminatory and charge on the basis of bandwidth consumption, it refrains from addressing the need for standardization of billing practices (i.e. a transaction fee independent of cost of content/service). That’s where there needs to be co-ordination between the Department of Telecom and the Reserve Bank of India, since telecom connections – mostly prepaid – are like prepaid wallets and used to buy services.

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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