BackTrai begins to act like a real regulator
It safeguards the Internet's role in doing away with information asymmetry
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The Indian telecom regulator’s order on differential pricing, which effectively sounds the death knell for Facebook’s Free Basics, is a progressive ruling by an entity that hasn’t always been all that forward in its thinking. The order, rightfully, puts a spoke in the wheels of arguments and economic models in favour of splitting the Internet (thereby creating “our" Internet and “their" Internet), recognizes that the Internet is a public good, and delegitimizes efforts to treat various types of content differently on the Internet. In a country where concentration of power and wealth have traditionally been driven by information asymmetry, and where, thanks to technology, a sunshine legislation, and a media explosion, the benefits of doing away with such asymmetry were becoming obvious, the order from the Telecom Regulatory Authority of India (Trai) is welcome.
The telecom regulator hasn’t always been as progressive. Many of its early rulings appeared to favour state-run telcos. It did not seem particularly perturbed by the almost cartel-like behaviour telcos displayed in the early days of mobile telephony—with near identical tariff plans. It stood by idly while Reliance and Tata effected what can only be described as a back-door entry into mobile telephony despite having a licence to offer only fixed telephony services. And it allowed telcos to get away with poor quality service.
In recent times, though, it has behaved more like a regulator, despite expressing a strange and inexplicable desire to regulate Over The Top (OTT) services, maybe at the prompting of the telcos. It has cracked down on telcos for such things as “call drops" and poor quality service. And it has struck a blow for Net neutrality with its Monday ruling on differential pricing, thereby retaining the fundamental characteristic of the Internet as a public good, albeit one which almost everyone accesses through private gatekeepers (telcos or Internet service providers). That ruling, which has found echoes around the world (and almost no bad reviews) could well force other countries to review their position on Free Basics.
More needs to be done. Hundreds of millions of Indians don’t have access to the Internet. Trai should work with the government and telcos (and ISPs) to address this—maybe by suggesting that at least part of the proceeds from spectrum auctions be channelled into providing free or low-cost Internet services and not be used expediently, to narrow the government’s budgetary deficit. There is the Universal Service Obligation Fund financed by part of the revenue of all telcos, that was created for just such a purpose, but it has failed.
India doesn’t have a privacy law. Trai should get involved in helping shape one. The order on differential pricing implicitly acknowledges the fact that free Internet services are rarely free, because they usually involve monetizing user data (if not immediately, then at some point in the future). India needs explicit norms on data privacy and use of customer data. As anyone with a mobile phone connection can vouch, most telcos pay lip service to this and the reality is often a nightmare replete with spam calls. Clear laws and norms could also make user identification such as the Aadhaar number more acceptable to some of those opposed to India’s effort to give all residents a Unique ID number.
Repeated spectrum auctions as well as unrestricted competition have left most telcos in financial distress (or at least financial stress). The New Telecom Policy of 1999, which catalysed the so-called hockey-stick moment in Indian mobile telephony, ensuring a sudden and steep take-off in numbers, envisioned only four telcos in every service area. A steady hand, such as Trai’s, may be needed to restore some degree of health and vitality to the business.
Many of these issues are beyond Trai’s remit, but the regulator can and should encourage discussion around them. By doing so, it can also set the agenda. It has already framed the contours of India’s arguments for Net neutrality, a battle in which it found itself on the same side as the state. It could find itself on the other side in future debates. Its willingness and ability to remain progressive may well decide the future of India’s information economy.
Did Trai make the right decision on Net neutrality? Tell us at views@livemint.com
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