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Regulating the Internet as a Public Utility: Why Should India Protect Network Neutrality

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The American communications regulator the FCC, recently reclassified broadband services under Title II of the Communications Act. This move permits the FCC to regulate Internet services as a public utility – much like traditional telephony and unlike the case with cable television. But what does this debate mean for India? Why does the regulation of the Internet as a public utility matter? Newslick discusses these issues with Prabir Purkayastha, Chairperson of the Society for Knowledge Commons and focuses in particular on what the concept of net neutrality means and why it is critical to prevent the breach of this principle in developing countries such as India.

Rough Transcript: 

Rishab Bailey - Hello and welcome to Newsclick. The American Federal Communications Commission has this week announced that it would reclassify broadband services to permit regulation of ISPs as public utilities. This means that the FCCs will have the power to ensure, for instance, that the principle of Network neutrality can be protected online. At the same time in India, we have seen that the Facebook has been recently launched it's application which provides users free access to Service to an array of basic applications. To discuss the FCC step and what this could be for India, we join by Prabir Purkayastha, Chairperson of the Society for Knowledge Commons.

Now what is Network neutrality and why this principle is so important?

Prabir Purkayastha - While network neutrality follows for what is to be called common carriage principle, which means that, if you offer certain services on a platform, that platform has not to discriminate between the various services, it cannot deny services, applications that are on top of it, It cannot be discriminated and it cannot charge unreasonable prices. This is the principle, for instance, if you offer the ferry service, if you want road services and also the principle which you followed in telecom. If you provide a certain kind of services, if you are providing the basic carriages it work, the transmission system, then you cannot discriminate between any kind of services, you have to provide services to all. You can charge more, for instance, if it is taking more costs, for instance railways charge more for handling as in chemicals, handling cost involved. But it cannot be unreasonable, it cannot be discriminatory. That is the principle.

RB - Why is there so much talk of this principle of Network neutrality, specifically in the context of Internet? and what is the importance of this declassification that the FCC has just recently done?

PP - Well, let us look at it this way. Internet is an application which runs in either cable television networks; which is the basic cable network provided to each house if it comes through a cable or telephones which is called DSNs, basically it uses the old telephone wires for providing the same broadband services. This is the broadband services all about. So you can get broadband which is not the dial-up service which is earlier used to have. You can get broadband services, and different countries are again classified them according to what is the minimum bandwidth you have to provide for to be classified as a broadband service but in principle, it means that you offer a certain kind of telecommunication services, in this case broadband services over either telephone wires or over the cable that comes to our house for Cable-TV. Basically the Internet suppose to be riding on top of; Internet in the sense is a set of applications; you can have Facebook, you can have Google as an application. So you have an array of application that run on top of this telecommunication network that comes to the hubs. So historically, Network neutrality would not have been an issue because it is classified under telecom even in United States originally. Telephony was classified and DSL which is used the same copper wire that comes to the house for voice telephone was also classified basically as a broadband service what is called title-2, which means, it is regulated service, is a public utility what you said. It is only when the cable television companies started offering broadband services then the issue came up that the cable television was not under telecom regulation of this kind. So should they also be brought-in or would the Internet services which they were offering broadband would also be brought-in under the same condition with DSL or they would be classified differently? So they got classified differently and that is what they got classified finally called as information services and in fact the DSL was removed from the title-2, which is the classification as public utility as it were. This was then transfered also under information services and therefore it came out of the kind of regulation that Net neutrality would demand.

RB - So what specifically is the kind of regulation that the FCC wants to impose in this Internet space? I mean we have already seen last year, for instance that the open Internet who has struck down by a court saying that it didn't have the power to regulate in this way. So this is clearly a response to that previous action. So what specifically do they want to do?

PP - Essentially if they want to regulate broadband services then they have to put in the title-2, that is very clear. If you don't put it in the title-2, then you cannot then regulated. FCC was trying to leave it not under title-2 but under title-1 and then trying to regulate it. The court struck it down and honestly everybody said, much easier way would be to classify it as essentially telecom service. Now the historical reason why the US want to make this distinction because, through out the world it is been arguing, Internet is different from telecommunications and therefore if United States itself agrees that the telecommunication is equivalent to Internet or Internet service ride on basic telecom services, then the whole argument, for instance, advanced in the WCIT in Dubai when the ITU treaty was been done, all of this then will falls flat. So there were this hesitation of classifying the telecom services but now the fact that the Net neutrality such a popular issue, President Obama has supported it, with all these it is very difficult for FCC to stand-up to this and take the next step, which is declare Net neutrality and the only way they could really do it legally was to do it under title-2.

RB - So do we in India here deal with our service providers? Do we treat them as public utility providers and the consequent question what are we doing about Network neutrality in India?

PP - The voice services are clearly regulated services. In India, Internet services are also regulated services under the telecommunication act. What is the difference is that, the telecom regulatory authority has treated Internet services with forbearance, which means it has the power to regulate but it is not regulating it. Therefore also it is the argument which Mr Kuller is given that there is no law regarding Net neutrality. The issue is not 'there should be a law or not'. The issue is law demands that you treat competition in a particular way it says you can regulate the Internet. So it very clearly gives the powers to TRAI and the telecom authority here, the government of India to regulate the Internet the way it is suppose to be. Under the regulation, Net neutrality is one of the important consideration. And yes, the fact that, it is not been regulated does not mean TRAI does not have the powers to regulate it. It has the powers, it can declare various things in it, including Network neutrality. Justice is the way for voice services, it declares the rates as well as declare the service obligations so all of this can be done from Internet as well. In India, we don't need a certain kind of issues that United States has to face because we have not separated Internet services and information services, we have left with telecom services.

RB - Now it is often claim that regulating the business of ISPs would cut into their profit, consequently their ability to invest in their infrastructure so on. Now given in India, you have high spectrum cost as well as supposedly high cost of business in India. Do you believe that the sectors best left untouched as you said forbearance? Is that the best way to deal with this?

PP - Well, the argument for forbearance is the cost are not too high so it is OK. The question that arises is Indian broadband cost and one of the highest in the world, so we are way above for the kind of bandwidth we are getting, we are actually paying far more. So there is a very strong argument why forbearance is actually failing? On top of that, what the telecom companies are doing in conjunction with a certain strong Internet companies is to bundle services and take money from both. Take money from us as consumers, as high bandwidth cost as well as also charge the Internet service providers, for content providers but content to certain application like Facebook and so on. Youtube, Facebook, Skype; these are the key applications that we are talking about and charge them extra money for being able to give them the services. This is in fact the issue that has come up, earlier Vodafone and Airtel talking about it, that they will introduce the services which will then bundle only a few things, already in the mobile area, this practice is already there. So these are all violations of Net neutrality in various forms because it basically says a few players will then be the dominant players because they are the only ones which would be available cheaply as virtually at no cost, while all others will be denied access because they will have then the consumer would have to pay at higher costs.

RB - Now we have seen of course as I mentioned the launch of here in India recently but don't you think that in a country like India were access continues to be a big problem for large part of our population, the initiatives like this should be actually be encouraged? Despite the fact that they might limit the user in-terms of content that a person can access?

PP - See there are two sets of problem with this. One is the larger issue that, all these players how do they make their business model? Then business model comes from actually offering the user to the advertisers as a product. Now effectively what it means is that, the advertising revenue which is the main stay of the media in the country would then shift to Google, Facebook and a few other players of the Internet. So over a period of time, what it will do is, it will really queue completely the media income to these channels and increasingly very clear Internet is going to become the dominant pipe, through which media's future is going to come, whether it is newspaper, television or even radio. So this is the long one part. The second part of it is, we never gone to have Indian companies on the Internet if you allow a monopoly of this kind to develop. So what it does is all the start-ups which had the ability to develop; that is how the Facebook of the world has developed; these kind then cannot be developed in future. So what you are going to do is to freeze the monopoly virtually for ever, or at least for long time on the net to the detriment of Indian companies who are late comers on the scene.

RB - So this is clearly an issue that various authorities in India could deal with it, whether it is Competition Commission of India or the Telecom Regulatory Authority of India. So that is all the time we have today. Thanks for being with us.

DISCLAIMER: Please note that transcripts for Newsclick are typed from a recording of the program. Newsclick cannot guarantee their complete accuracy.

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