To the Chairman, TRAI

Thank you for giving me this opportunity to share my views on the consultation
paper published by TRAI on March 27, 2015 titled "Regulatory Framework For
Over-the-Top (OTT) Services. I am worried that this consultation paper makes
sweeping assumptions about the Internet, and does not take a neutral and
balanced view of the subject of Internet Licensing and Net Neutrality. Any public
consultation must be approached in a neutral manner by the regulator, so that
people can form an informed opinion.

I strongly support an open internet, for which I believe it is critical to uphold net
neutrality and reject any moves towards licensing of Internet applications and
Web services.

I urge TRAI to commit to outlining measures to protect and advance net

neutrality for all Indians. Net neutrality requires that the Internet be maintained
as an open platform, on which network providers treat all content, applications
and services equally, without discrimination. The TRAI must give importance to
safeguarding the interests of our countrys citizens and the national objective of
Digital India and Make In India, over claims made by some corporate interests.

I request that my response be published on the TRAI website alongside other

comments filed, in line with past practice regarding public consultations. I urge
that TRAI issue a specific response to user submissions after examining the
concerns raised by them, and hold open house discussions across India,
accessible to users and startups before making any recommendations.

Question 1: Is it too early to establish a regulatory framework for Internet/OTT

services, since internet penetration is still evolving, access speeds are generally
low and there is limited coverage of high-speed broadband in the country? Or,
should some beginning be made now with a regulatory framework that could be
adapted to changes in the future? Please comment with justifications.

No new regulatory framework in the telecom sector is required for Internet

services and apps - and no such regulation should come into effect in future
either.

This question incorrectly presumes that regulation of the Internet is absent and
there is a need to create it. Additionally, the technical language of Over-the-Top
applications used in the consultation paper fails to convey that it is truly referring
to the online services and applications which make todays Internet which we all
use; Facebook, Ola, Zomato, Paytm, WhatsApp, Zoho and Skype etc. The Internet
is already subject to existing law in India - any extra regulatory or licensing
regime will only be detrimental to the customer and to Indian firms developing
online services and apps.

Under the current regulatory framework, users can access the internet-based
services and apps either for a low fee or for free where the application owners
make money by selling advertisements based on user data. With additional
regulations and licenses, it will make it expensive for these services to reach out
to their customers eventually leading to higher prices and undesirable levels of
advertising - which is against the public interest and counterproductive.

It appears that the telecom companies are shifting goalposts. Many telecom
companies have earlier argued in the consultation paper floated by TRAI on
mobile value added services (MVAS) that it was not necessary to regulate these
value added services. They said MVAS are already governed by general laws
under the Indian legal system and comply with the security interests as they
operate on the networks of legitimate telecom license holders. Internet platforms
also are regulated and governed by general laws in addition to specialised laws
such as the Information Technology Act, and the same treatment should be
extended to them as well.

As TRAI said previously in its recommendations after consulting on MVAS

regulation:

The Authority preferred least intrusive and minimal regulatory framework and
thus no separate category of licence for value added services is envisaged. After
second round of consultations, the Authority is also not favoring registration of
Value Added Service Providers (VASPs) or content aggregators under the Other
Service Provider (OSP) category.

Content shall be subject to relevant content regulation and compliance of

prevailing copyrights including digital management rights and other laws on the
subject (para 3.12.2). The content is subjected to content regulation/ guidelines
of Ministry of Information and Broadcasting, Information Technology Act, 2000,

Cable Television Networks (Regulation) Act, 1995, Indian Copyright Act etc., as
amended from time to time. The content regulation shall be as per law in force
from time to time. There should be consistency in the treatment of content
across all kinds of media including print, digital/multimedia to avoid any
discrimination. (para 3.13.3):

Imposing a licensing and regulation regime carry significant risks of destroying

innovation. Launching new services and features will take more time and will
make it difficult for new startups with low cash reserves to enter the market. It
will basically ring the death knell for the country's fast-growing digital media
sector.

Question 2: Should the Internet/OTT players offering communication services

(voice, messaging and video call services through applications (resident either in
the country or outside) be brought under the licensing regime? Please comment
with justifications.

There is no need to bring Internet platforms offering communication services

under the telecom licensing regime. The way this question is framed gives an
impression that there is a clear distinction between communication services and
other non-communication services on the internet. This is an incorrect
presumption. Many internet services incorporate real time chat and video
services to improve their customer engagement. A licensing framework will, for
sure, work against customer interest and will stifle innovation. The cost of entry
to the market would increase many times over which will be extremely
detrimental to newer startups who might have more innovative offerings for the
market.

Telecom operators need to have licenses to operate since they use a public
resource: spectrum. It utilizes the spectrum to transmit data packets, voice and
SMS communication and acts a dumb pipe. However, communication services
such as Skype, WhatsApp, Viber and others sit atop the networks and
infrastructure already controlled and owned by the telecom operators. Where
Voice-over-Internet-Protocol services connect into the normal switched telecom
network, TRAIs VoIP regulations already exist. Therefore, there is no need for
internet-based communication services to hold separate licenses.

Question 3: Is the growth of Internet/OTT impacting the traditional revenue

stream of Telecom operators/Telecom operators? If so, is the increase in data
revenues of the Telecom Operators sufficient to compensate for this impact?
Please comment with reasons.

There is no evidence of data revenues cannibalizing revenues from voice or SMS.

In fact, data usage is soaring and it is driving the demand for telecom networks.

The question fails to acknowledge that revenue from data services also fall under
the traditional revenue streams category as per the Unified Access License
Agreement

[http://www.dot.gov.in/access-services/introduction-unified-accessservicescellular-mobile-services]. So, to assume that data services are impacting

the growth of traditional revenue streams is wrong.

Services such as Skype and WhatsApp have specific use cases. They are not, and
should not be, considered as substitutes to voice calling or SMS. For instance,
calls made using VoIP dont have the same clarity that we have on voice calls.
Moreover, services such as WhatsApp are used for real-time chatting as opposed
to SMS. Voice and SMS have their own benefits and use cases, so do VoIP and
internet messaging. Customers should be free to pick and choose among these.

There is still no concrete evidence suggesting that the decline in the revenues
from messaging and voice calling is due to the growth of revenues from data
services, and statements from experts and industry experts appear to in fact
point to there being no cannibalization of revenues.

Gopal Vittal, CEO, Airtel

There is still no evidence that suggests that there is cannibalization, he said

when asked about whether data is cannibalizing Airtels voice business. On
internet messaging cannibalizing SMS revenues, he said: At this point in time is
very, very tiny. And so it is not really material as we look at it.

[http://www.medianama.com/2015/02/223-no-evidence-of-voip-cannibalizationof-voice-airtel-india-ceo-gopal-vittal/]

Vittorio Colao, CEO, Vodafone

Growth in India has accelerated again (October-December), driven by data

[http://computer.financialexpress.com/columns/india-high-on-3g/9462/]

The companys India unit grew by 15%, going past its counterparts during the
quarter ending December as customers used its data services.
[http://articles.economictimes.indiatimes.com/2015-0206/news/58878696_1_organic-service-revenue-vittorio-colao-vodafone-india]

Question 4: Should the Internet/OTT players pay for use of the Telecom Operators
network over and above data charges paid by consumers? If yes, what pricing
options can be adopted? Could such options include prices based on bandwidth
consumption? Can prices be used as a means of product/service differentiation?
Please comment with justifications.

As I argue in my answers above, telecom companies are expected to grow

steadily and so is data. Public statements made by officials of telecom
companies, their earnings report and analysis of independent agencies suggest
that telecom companies will continue to grow. So, there is no need for them to
impose additional revenue from customers - and there is especially no
justification of creating an extra revenue source supported by government
intervention. The term bandwidth consumption is ambiguous. Currently,
customers are billed for the quantum of data used and not the bandwidth.

Charging users an additional fee over and above the data charges to access
specific internet services will result in higher costs which will dissuade people
from using such services. Moreover, as explained earlier, many online businesses
have video and chat applications within them to interact with customers. In such
cases, it will be extremely difficult for users to ascertain the sum billed to them if
they access the websites of such businesses. There will be no transparency in

billing and it will run afoul of TRAIs own 2006 Quality of Service Billing
regulations which ensures transparency in billing and tariff plans.

Taking an additional fee also breaks the internet. Today, many websites,
especially blogs, have hyperlinked content and users can switch from one
website to another without having to worry about access or cost. But differential
pricing will not provide such a seamless experience. Moreover, it tends to favor
the larger firms with deep pockets, essentially not providing a level-playing field.

Question 5: Do you agree that imbalances exist in the regulatory environment in

the operation of Internet/OTT players? If so, what should be the framework to
address these issues? How can the prevailing laws and regulations be applied to
Internet/OTT players (who operate in the virtual world) and compliance enforced?
What could be the impact on the economy? Please comment with justifications.

Firstly, there is no regulatory imbalance in regards to Internet-based services and

apps. It is the telecom operators who own spectrum, which is a public resource,
and hence need to be licensed. Internet services dont need licenses. Telecom
operators provided the pipe or network on top of which Internet services exist.
So, theres a clear distinction between the two.

It also needs to be pointed out that Internet services are already covered by the
Information Technology Act, 2008 and the Indian Penal Code. So, theres no need
for a separate regulatory framework or licensing. In fact, this was the exact
argument telecom operators had earlier made while stating their case for not
regulating mobile value added services (MVAS), which in essence is quite similar
Internet-based services.

Question 6: How should the security concerns be addressed with regard to OTT
players providing communication services? What security conditions such as
maintaining data records, logs etc. need to be mandated for such OTT players?
And, how can compliance with these conditions be ensured if the applications of
such OTT players reside outside the country? Please comment with justifications.

The internet services and apps are well-covered under the existing laws and
regulations. These include the Code of Criminal Procedure, Indian Telegraph Act,
Indian Telegraph Rules, and the Information Technology Act and its different rules
pertaining to intermediaries and interception. These different regulations allow
the Indian government and law enforcement agencies to access the data stored
by internet platforms when deemed legally necessary. Any additional regulations
carry grave risk of breaching user privacy and would also require constitutional
review - especially since the Government is still working on a proposed Privacy
Bill.

The government and courts also have the power to block access to websites on
the grounds of national security and public order. It has taken similar steps in the
past and has been widely reported by the media. The transparency reports
periodically published by major internet companies suggests Indian government
routinely requests for user data and blocking of user accounts. Between July
2014 and December 2014, Indian authorities had 5,473 requests for data,
covering 7,281 user accounts from Facebook and the company had a compliance
rate of 44.69%. Google had a compliance rate of 61% with respect to the
requests made by different government agencies across India.

Question 7: How should the OTT players offering app services ensure security,
safety and privacy of the consumer? How should they ensure protection of
consumer interest? Please comment with justifications.

Although user privacy and security is of paramount importance, additional

regulation carries the inherent risk of breaching user privacy which is not in the
consumers interest. The Information Technology Act, 2000 already addresses the
security concerns of the user. But more importantly, any criminal act committed
using these platforms can be tried under the Indian Penal Code. So, there is no
need to burden the internet platforms with additional regulations.

Also, it is worth noting that many telecom companies in India have not made
information publicly available as to whether and how they comply with
regulations that guarantee security, privacy and safety of the customer. TRAIs
current paper fails to articulate why the internet services and apps should be
brought under similar regulations.

Question 8:

In what manner can the proposals for a regulatory framework for OTTs in India
draw from those of ETNO, referred to in para 4.23 or the best practices
summarised in para 4.29? And, what practices should be proscribed by
regulatory fiat? Please comment with justifications.

ETNO is similar to Indias COAI which makes it an industry lobby group.

Understandably, the suggestions made by ETNO heavily favor the telecom
companies and will be detrimental to customers if India refers to their
suggestions.

ETNOs stand have been widely criticized in the past. Europes own group of
government regulators [Body of European Regulators for Electronic
Communication (BEREC)]

http://berec.europa.eu/files/document_register_store/2012/11/BoR_
%2812%29_120_BEREC_on_ITR.pdf ETNOs proposals could jeopardize the
continued development of the open, dynamic and global platform that the
Internet provides which will lead to an overall loss of welfare. Additionally, the
international free expression group Article 19 says ETNOs proposal would
seriously undermine net neutrality.

According to Access Now, ETNOs recommendations would have meant higher

data charges for customers while from an entrepreneurs standpoint, it will limit
their ability to reach out to a wider market. For a small but fast growing startup
and digital media sector in India, this can potentially ring the death knell. ETNOs
suggestions on this subject so far have failed to have been accepted by any
government agency - including the regulators in their own host countries. It is
therefore especially troubling that TRAI is choosing to make one of their
proposals a pillar of this public consultation here in India.

Question 9: What are your views on net-neutrality in the Indian context? How
should the various principles discussed in para 5.47 be dealt with? Please
comment with justifications.

Net Neutrality, by definition, means no discrimination of traffic flowing on the

internet with respect to speed, access and price. Chile and Brazil, which are
developing countries just like India, have passed laws supporting net neutrality.
This is in addition to government commitments to implement net neutrality
legislation in the United States and European Union.

India has 1 billion people without internet access and it is imperative for our
democracy to have an open and free internet where users are free to choose the
services they want to accessinstead of a telecom operator deciding what
information they can access.

Internet apps and services are expected to contribute 5% to Indias GDP by 2020.
That will only happen of entrepreneurs, big and small, have a level playing field
that encourages innovation and non-preferential treatmentsomething that net
neutrality ensures.

Assuming there is no net neutrality, only the big players will be able to strike
deals with telcos while the smaller players remain inaccessible, which will go
against the principles of net neutrality as listed below:

No blocking by TSPs and ISPs on specific forms of internet traffic, services and
applications.

No slowing or throttling internet speeds by TSPs and ISPs on specific forms of

internet traffic, services and applications.

No preferential treatment of services and platforms by TSPs and ISPs.

It is also worth noting that the proposed framework will give too much power in
the hands of the telecom companies, which is not healthy for the ecosystem.

Question 10: What forms of discrimination or traffic management practices are

reasonable and consistent with a pragmatic approach? What should or can be
permitted? Please comment with justifications.

This question assumes that traffic discrimination is necessary and is a norm.

Rather, traffic discrimination should be an exception as it is against the principles
of net neutrality.

In such exceptional cases, telecom companies need to have the permission of

TRAI or other competent government agency through public hearing to carry out
traffic management to ensure transparency in the entire process. Further, it
should be kept in mind that such steps shouldnt interfere with the access,
affordability and quality of the services.

More importantly, https://ec.europa.eu/digital-agenda/sites/digitalagenda/files/Traffic%20Management%20Investigation%20BEREC_2.pdf jointly by

BEREC and the European Commission suggest that the propensity of the telecom
operators to restrict access of internet services is high. The report noted that
telecom operators were most inclined to block and throttle P2P services on
mobile as well as fixed line networks. VoIP, on the other hand, was blocked
mostly on telecom networks.

Keeping this in mind, TRAI needs to ensure that instances of discrimination of

traffic should be few, far between and, above all, transparent.

Question 11: Should the TSPs be mandated to publish various traffic

management techniques used for different OTT applications? Is this a sufficient
condition to ensure transparency and a fair regulatory regime?

The question is based on the premise that publishing various traffic management
techniques for Internet services will ensure a fair regulatory regime and therefore

such discrimination is permissible. As I have repeatedly said in the above

answers, discrimination of services will not bring about a fair regime for users.

Further, a recent study [http://bit.ly/1D7QEp9] in the UK has pointed out that

merely publishing data on traffic management will not translate into a fair
regime. The study found that most consumers did not understand traffic
management or use it as a basis for switching operators. Those who did do so
comprised a group perceived to be small or insignificant enough that most
network operators did not seek to factor them into their product decisions,
despite some consumers complaints about traffic management. In India where
awareness and activism on issues of net neutrality is considerably less, it is
unlikely to play the critical role that the Consultation Paper suggests.

Question 12: How should a conducive and balanced environment be created such
that TSPs are able to invest in network infrastructure and CAPs are able to
innovate and grow? Who should bear the network upgradation costs? Please
comment with justifications

The underlying assumption of the question suggests that currently there is an

imbalance in the environment within which telecom operators and internet
services operate. However, as I have pointed out it my previous answers, no
such imbalance exists. Telecom firms and internet services have distinct
functions. The former has to provide the infrastructure to access content and the
latter has to provide the platforms for users to create content. As financial results
of the telecom operators and analysis by various independent agencies have
shown that revenues from data are soaring. So, it makes logical sense for the
telecom operators to invest to upgrade and improve their network infrastructure.

On the contrary, I would argue that there is no incentive for the telecom firms to
invest to upgrade their networks if they charge the CAP instead of charging the
customer for data. They would seek to further increase its revenues coming from
the CAPs, a move that will be disastrous for India's telecommunications industry.

Question 13: Should TSPs be allowed to implement non-price based

discrimination of services? If so, under what circumstances are such practices
acceptable? What restrictions, if any, need to be placed so that such measures
are not abused? What measures should be adopted to ensure transparency to
consumers? Please comment with justifications.

Discrimination of services in any form is detrimental for the growth of the

telecom industry itself and there should be no circumstance for a telecom
operator to do so. Given the diverse nature of the Internet, telecom operators
should not be allowed to determine what type of service should get more priority.
For example, a consumer in India probably relies on VoIP calls to keep in touch
with people abroad and if there is throttling of these services, it infringes on the
users fundamental right of freedom of expression. An Internet service that a
telecom operator thinks which could lead to traffic congestion, might be vital to
consumers. Further, a telecom operator might use throttling to further a service
promoted by them and induce consumers into using them, thereby eliminating
choice.

Transparency alone will not bring about a fair regime for users, and it is crucial
that TSPs be prohibited from discriminating between services

Question 14: Is there a justification for allowing differential pricing for data
access and OTT communication services? If so, what changes need to be brought
about in the present tariff and regulatory framework for telecommunication
services in the country? Please comment with justifications.

The question above is simply a rephrasing Question 13. Differential pricing for
data access and OTT communication services again simply amounts to
discrimination of data services. Hence there is no justification for differential
pricing other than furthering corporate profit. Telecom operators stand to gain
substantially from the proliferation of all data services including communication
services. A neutral internet allows smaller companies to innovate and compete
with larger players and ensure that there is a free market. Any changes in the
present tariff and regulatory framework is not needed save for ensuring that the
interests of the consumer is taken care of.

Question 15: Should OTT communication service players be treated as Bulk User
of Telecom Services (BuTS)? How should the framework be structured to prevent
any discrimination and protect stakeholder interest? Please comment with
justification.

Treating OTT communication service players as Bulk User of Telecom Services

again amounts to discrimination of data services and hence it should not be
allowed. The question also further assumes that the stakeholders are only the
telecom operators and not the consumers. If only the interests of the telecom
operators are protected by treating services which compete with their traditional
services differently rather than innovating themselves, it would lead to a
situation of anti-competitiveness. Telecom companies have an interest in
imposing their control over information and communication networks, but the
price of that would mean stifling competition, increased barriers for innovation
and business and eventually infringe on the fundamental rights of Indian citizens.

Question 16: What framework should be adopted to encourage India-specific OTT

apps? Please comment with justifications.

Only two steps need to be taken to foster the growth and innovation of India
specific apps and services. First, there should be no additional regulation or
licensing and strong net neutrality laws should be enacted.

These steps will ensure that India continues to have a diverse app economy
where entry barriers are minimal and entrepreneurs can launch their product
without having to worry about discriminatory treatment from the telecom
operators. In such a case, the best product will win which will be beneficial for
the customers and the telecom as well as the Internet industry.

The agnostic nature of internet networks has boosted the growth of Indias app
economy but we risk destroying this fast growing sector by violating net
neutrality.

Question 17: If the OTT communication service players are to be licensed, should
they be categorised as ASP or CSP? If so, what should be the framework? Please
comment with justifications.

The question of categorising doesnt even arise, because as mentioned earlier

any extra regulations or licensing is going to be detrimental to the end user.
Requiring licensing of online services and mobile apps under the current telecom
framework in India will have enormous negative consequences. The impossibly
onerous burdens imposed by such licensing would results in many such globally
developed services and apps not being launched in India - and our own startup
efforts to develop local versions of such apps being killed in their early stages.
The net results would be decreased consumer benefit and a massive slowdown in
innovation and reduced Make in India efforts due to the regulatory cost of
doing business becoming very high.

Question 18: Is there a need to regulate subscription charges for OTT

communication services? Please comment with justifications.

Subscription charges for such apps need to be allowed to evolve as it would in a

pure market economy. The subscribers (buyers) would want to pay the lowest
possible price, and the app developers/companies (sellers) would want to charge
as much as possible, eventually leading to a fair price.

Subscription charges for such Internet-based services have remained, more or

less, quite low in India, especially because the cost of switching from one service
provider to another is also quite low: This competition will ensure that charges
remain fair, without the need to regulate them, going forward as well. As noted in
response to earlier questions, existing Indian law also applies to online services which would include the Consumer Protection Act and other regulations meant to
prevent cheating or other illegal pricing issues.

Question 19: What steps should be taken by the Government for regulation of
non-communication OTT players? Please comment with justifications.

As mentioned earlier, irrespective of what an OTT app is used for

(communication, online shopping, etc) theyre all essentially Internet-based
services, and hence there is no question of creating new regulatory measures.

Question 20: Are there any other issues that have a bearing on the subject
discussed?

Here are the additional steps that I urge the TRAI to undertake in the interest of
the public:

- Due to the absence of any formal regulations on net neutrality, TRAI should
issue an order or regulation preventing network neutrality violations by telecom
service providers. Some telecom companies have shown scant respect for the
issues presently under consideration and despite its questionable legality have
rolled out various services which violate network neutrality. Any delay in forming
regulations or preventing them in the interim till the process is complete is only
likely to consolidate their status. This is not only an affront to the Internet users
in India but also to the regulatory powers of the TRAI.

- TRAI is requested to publish all the responses and counter responses to the
consultation, including any other additional material, on its website.

- For better public involvement and awareness, open house debates should be
held in major Indian cities after the consultation process is over.