Net neutrality: Nasscom warns of severe economic impact

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April 24, 2015 12:57 AM

IT trade body Nasscom has warned of a severe economic impact if any discriminatory policies are implemented against...

IT trade body Nasscom has warned of a severe economic impact if any discriminatory policies are implemented against the over-the-top (OTT) players. Nasscom’s

response to the Trai consultative paper on the regulatory framework for OTT services released on Thursday said: “Net neutrality is a universal concept where telecom service providers (TSPs), as access providers, have no power to select services, applications, content that a consumer accesses. The consumers retain their right to select, and make informed decision on how to use internet access offered by TSPs.”

OTT players like Skype, Whatsapp or Viber provide voice and data services using internet as the medium. The IT body argued that the advent of internet, proliferation of mobile telephony, adoption of social media, have created the perfect confluence for breakthrough economic development and transformation of the country.

“For this to happen, there is a need to understand the key guiding principles of net neutrality, which is about unfettered user right of making an informed choice in deciding access to legal content/services on the internet,” it stated.

Nasscom president R Chandrashekhar said: “Net neutrality creates an open and level playing field that facilitates innovation, adoption and inclusion. The other key priority is the proliferation of an affordable telecom infrastructure. These essential building blocks of the digital revolution are not contradictory and need to be synergised.”

It also argued that any stifling regulations applicable to these internet platforms and services may create significant difficulty for business, while seriously hampering the growth and success of start-ups and SME companies.

Nasscom said the economic impact of the internet is cross-sectoral, and 75% of the value added created by the internet is in traditional industries. As per the recent report in 2015 by the Boston Consulting Group and IAMAI8, internet applications and services actually contributed 3.2% to national GDP in 2013. “It is therefore one of the largest sectors of the Indian economy surpassing healthcare (2.5%). The internet economy is expected to grow to over 4% of GDP by 2020, comparable to developed countries like US and Japan,” it noted.

Nasscom also discounted any notion of revenue loss from OTT players to TSPs. “The apps created have made the internet more useful, and opened up avenues for not just service providers, but increased convenience, transparency and enabled newer services for consumers. This is driving data revenues for telecom companies. Loss of revenue arguments from TSPs are not evident in some of the recent quarterly results announced,” it said.

In the long-run it is likely that it would result in a win:win situation for both TSPs and OTT players. The growth of OTT will spur demand for data that in turn generates additional revenues for TSPs, leading to a synergistic ecosystem.

Nasscom felt it would be better if the government and the telecom industry work together to create a balanced environment for TSPs to invest in network infrastructure, rather than targeting the fledgling internet-based product and service providers.

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