Regulations should not prohibit commercial offers such as zero-priced consumer access for certain services
Net neutrality has been a much debated issue in India following the consultation paper issued by Trai. This was expected as mobility is a great success story in the country and mobile internet is at the heart of our digital world. However, this is a complex topic with many interrelated aspects that touch upon openness, investment, innovation, efficiency and consumer choices. It requires careful consideration of all aspects that transcend simplistic views and emotional reactions.
The basic aspect to consider is the principle of the open internet. Operators, content providers and the government want to connect more consumers to the internet and want them to make greater use of digital services. Network traffic management by operators does not contradict this belief in the open internet. Let me state categorically, the internet has been an open platform for innovation, inclusion, expression and development; it should remain so.
Some commentators are of the view that strict regulation that restricts operators’ flexibility to manage their networks and offer multiple service models is necessary to maintain the open internet. Others points out that effective competition within the contours of existing regulators’ safeguards is the better approach for maintaining and investing in the open internet. Is there a case for further regulation of operators in the absence of proven harm and in the presence of existing legal safeguards?
Traffic management is an essential function of managing networks. The volume of data traffic carried by mobile networks keeps growing. Forecasts indicate that new applications and services will emerge and traffic volumes will grow. Cisco predicts that global mobile data traffic will increase ten-fold over the next five years; internet traffic is forecast to grow five-fold in India.
A variety of traffic—voice, video, messages, music, movies—traverses mobile networks. While managing increasing traffic volumes, networks also have to consider the demands of these services. For example, video-streaming services consume inordinate amounts of network bandwidth—far more than downloading emails or searching for information. This can result in degraded experience to all users if network traffic is not managed. Consumers expect operators to manage the delivery of different services. They want voice calls to be prioritised over other services.
They expect a less jittery performance when watching video clips online, while tolerating delays in retrieving emails.
A strict interpretation of net neutrality that calls for treating all bits equally is neither practical nor efficient. The best approach to manage growing and complex traffic is to match the network resource allocation to the requirements of each service type. Traffic management does not imply blocking of specific content or application provider on the network. On the contrary, active management of network resources makes the consumer experience better and networks more efficient. This is particularly important in mobile networks. With finite network capacity, mobile networks experience congestion.
Over-prescriptive regulation should not have the unintended effect of restricting efficient service delivery. The possibility to offer differentiated services has to be preserved to support greater consumer choice and innovation. Such differentiated offers benefit consumers because she pays for what she wants. New services in industries such as healthcare and automotive also require assured quality delivery over broadband infrastructure.
Many commentators and policy-makers now recognise that flexibility to manage traffic and offer differentiated services is beneficial. They are keen to establish a policy environment that encourages investment and innovation in mobile networks and digital services. Less than 20% Indians access the internet. Broadband expansion, investment and service and business innovation are also considerations in this debate. Expanding broadband access requires significant upfront investments and innovative commercial propositions.
How can we encourage operators to invest and innovate? Over-prescriptive regulation that restricts flexibility is unlikely to help. Permitting technical and commercial flexibility will encourage operators to invest in networks and offer innovative services as it is in their interest to provide the best end-user experience to all their consumers.
Operators should be able to enter into agreements with content and application providers. Regulations should not prohibit commercial offers such as zero-priced consumer access for certain services. They benefit consumers by encouraging them to use the internet and to try new services without worrying about data consumption costs. They provide opportunities for new content and application providers to make use of the marketing, distribution and billing platform of operators. Similar business models are used by providers in the internet ecosystem and operators should not be prohibited from experimenting.
This call for flexibility should not be misinterpreted as calling for no oversight. Authorities should act where there are proven cases of anti-competitive behaviour. India’s mobile market is very competitive. It is delivering choice, innovation and value to consumers. Sufficient regulatory safeguards exist to protect consumers and to deal with potential anti-competitive behaviour.
Policy-makers should not rush into rule-making, but allow sufficient space for markets to find balanced solutions through competition. The technologies, services and business models of the internet are evolving. Rather than regulation, policy-makers should consider a principles-based approach to net neutrality that recognises the complexity and dynamism of the internet. Using principles will avoid unintended consequences in this environment while enhancing consumer understanding of their choices and encouraging investment and innovation by operators.
Policy-makers should hear all sides and consider all aspects of this complex topic. We should avoid unintended consequences of additional regulation despite the well-intentioned objectives of those calling for further regulation.
The author is director, Public Policy at the GSM Association. Views are personal