Net Neutrality: India and the world

Net neutrality is the practice of treating all OTT (Over the Top) and Telecom Service Providers equally. In essence, this means that OTT services such as WhatsApp, Facebook, Viber, Skype and YouTube can continue to generate revenue using the infrastructure established by Telecom Service Providers such as Airtel and Vodafone. Following active lobbying by telecom biggies such as Bharti Airtel, TRAI is expected to release a set of regulations protecting the interests of such firms.

This broadly translates into differential pricing based on content consumption for end consumers of data packages. 

As the debate on net neutrality takes centre stage in India, we take a look at regulatory practices across the world:

1.       USA: Net neutrality has been an issue of legislative and judicial contention in the USA for quite some time now. Despite the absence of legal restrictions making efforts to preserve net neutrality, telecom companies do not resort to offering different rates to consumers based on content or type of service. The Open Internet Order, which regulates ISPs, has only one of three essential elements ensuring net neutrality: transparency by the service providers. The FCC has also reclassified broadband as a telecom service and permitted fast and slow broadband lanes. That is to say, it is legitimate to have tiers of service, price-determined or otherwise.
So far, the US Congress has made five attempts to pass Bills containing some net neutrality provisions; but it has failed every time. On January 16, 2015, a U.S. Congress ‘H. R. discussion draft Bill’ came up for discussion, seeking to facilitate net neutrality and limiting the FCC’s authority to regulate ISPs.

2. France: The tiff between VoIP biggie Skype and the French Telecom Regulator ARCEP is the highlight of the Net Neutrality debate in France. ARCEP has demanded that Skype register as a Telecom Operator in the country, as the firm allows users to make phone calls using devices connected to the Internet. However, Skype has refused to register as a telecoms operator in France, insisting that Skype is a largely free VOIP telephonic service and nothing more than an IT application. Following a complaint by ARCEP, French prosecutors have launched a fact-finding investigation into Microsoft’s Skype operations in France.
 

The European Parliament had voted for protection of Net Neutrality in April 2014, and the inclusion of the same in French law was fiercely debated. The country has not yet reached a decision on the ‘Digital Bill’. A recent report by the French Council of State’s backs the claims of operators that real Net Neutrality protection would undermine investment in faster networks.

3. South Korea: Owing to almost 100% broadband penetration and rapid uptake of smart phones and mobile technology, South Korea’s telecom regulator announced “Net Neutrality (NN) and Internet Traffic management Guidelines” in 2011. The Guidelines included four important requirements in order to preserve net neutrality. The transparency requirement made network operators responsible for disclosing traffic management objectives, practices and methods to end users. The ‘No Blocking’ requirement prohibited the blocking of any lawful content, apps or services, with allowances to prevent harm to devices and for reasonable traffic management practices. The ‘No Unreasonable Discrimination’ requirement prohibited discrimination between lawful content application and services, again allowing for reasonable traffic management practices. Finally, the Reasonable Traffic Management requirement states that network operators may adopt traffic management practices for network security and stability, to avoid network congestion and for protecting end users.

4. United Kingdom: In an effort to incentivise investments in broadband infrastructure, the UK has allowed ISPs to develop additional revenue streams from preferential traffic regulation. They can provide preferential treatment in the form of tiered services or toll-boothing, for example, by giving online companies who are willing to pay for faster flow of data packets than other internet traffic. The incremental revenue from such services could be used to pay for the building of increased broadband access to more consumers.

5. Germany: Germany does not differentiate between VoIP other telecom services due to the technology-neutral approach of the Telecommunications Act. However, the Federal Network Agency has expressed its intention to exercise its discretion, to encourage development of evolutionary services like VoIP. In another interesting verdict, Deutsche Telekom (DTAG) lost a court case covering their intention to throttle data speeds above a certain volume. The basis of the decision lay in the contention about calling the tariff as a “flat rate”, despite general expectations that the firm will implement throttling tactics by simply doing away with the name.

6.China: China’s tough regulatory framework and its strategy of control has helped it create an exclusive market for domestic ISPs. China Mobile’s plans to begin charging OTT communication services for termination of traffic to their customers were strongly criticized by users on social media. The plan was eventually not implemented.

7. EU: Despite its objective to create a singular market for telecoms sector across Europe, the EU’s rules on net neutrality have seen opposition from member states.  In April 2014, the European Union (EU) approved new rules aimed at guaranteeing equal access to the internet and cutting cell phone charges. Later, many member states announced that they would not support an EU-wide ban on telecoms companies offering online services such as Facebook for free. The so-called “zero-rating”, where operators offer unlimited access to certain online services – typically Facebook, music streaming or online television – is seen to incentivise competition and innovation as well as increased consumer choice, even though some perceive it as a breach of net-neutrality.