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All Posts | Jul 14,2016

Counter Comments to the Consultation Paper on Free Data

Following our initial comments on the Consultation Paper on Free Data, below are our set of counter comments that serve as responses to the comments made by TSPs and TSP associations. Though a number of substantive proposals have been made in response to the Consultation Paper, owing to the large volume of comments, we have identified some common themes found across the submissions made by major TSPs and TSP associations and presented our responses accordingly.

Return to the differential pricing debate

While proposing potential models for provision of free data, several TSPs and TSP associations have highlighted differentially priced models including zero rated models as being best suited for the purpose. TSPs including Bharti Airtel, while arguing in favor of zero rated models, have even suggested that any anti-competitive concerns can be addressed by mandating TSPs to clearly disclose rate cards for sponsoring data on their respective platforms as well as by enforcing a framework to protect edge providers from denial-of-service by any TSP. A number of TSPs have even portrayed through their responses that zero-rated models are necessary for digital inclusion, and should be promoted rather than prohibited.

The TRAI has notified the Prohibition Of Discriminatory Tariffs For Data Services Regulations, 2016 after considering the opinions of all stakeholders. The TSPs are trying to re-agitate the issue which has already been decided. This consultation on free-data should be limited to that and cannot be used as a means to reopen the discussion on discriminatory tariffs. The Discriminatory Tariffs Regulations not only prohibit such kind of practices but also safeguard the neutral nature of the Internet. We would like to reiterate that research has shown that access to Internet provides individuals and firms a vital resource that facilitates innovation, learning and efficiency, all of which lead to greater productivity and thus, greater economic growth.

This is the reason that even our Government has recognized the importance of Internet and started the Digital India Initiative that seeks to digitally empower our Indian society. But any kind of positive impacts associated with the Internet would not reach our citizens if we are unable to maintain the neutral character of the internet. Zero-rated models, other such service arrangements and differentially priced models though aim at proliferating access are in reality detrimental to the Internet itself.

Various TSPs and TSP Associations in their responses, have also disapproved the need to have a TSP agnostic platform. They have given various reasons in support of their argument such as TSP agnostic platform gives more rights to private party than a licensed party1 and would mean indirect licensing and lead to content providers becoming passive telecom service providers.2 Other reasons given include that there is no guarantee that a TSP agnostic platform will not act as Gatekeeper, as the owner of the website who has commercial interest will be the only interested party to promote his website.3

This perception seems to stem from the fear that a TSP agnostic platform will mean that the TSPs’ own commercial interests will suffer at the hand of OTT players that are “unregulated” and have thus, suggested various models by which OTT Players are either more “regulated” or revenue sharing happens with the TSPs, so that the they may also get their piece of the pie. Some such models include Bharti Airtel’s “Technical Aggregator Model” where TSPs will participate on “FRAND” terms or VAS model wherein the OTT players, like VAS providers will integrate their system with TSPs and work on a revenue share model or Vodafone’s “two-way charging models” under which operators and content providers implement bilateral agreements that’ll govern what benefits are provided to the customers.

However without going into the merits and demerits of specific models, we would like to submit that the various models that are being mooted for in different responses by TSPs and TSP Associations are a rehash of the “Sender Pays” Principle mooted by the European Telecommunication Network Operators Association (ETNO) which was rejected by even by the European Governments at the World Conference on International Telecommunications held at Dubai in December 2012. Such a proposal was even rejected by the Industry representatives from India. However, these models discussed in the consultation paper will in effect result in the sender paying for the data consumed by the user while accessing the website of the sender. Such an approach will change the open nature of the Internet and the permissionless innovation ecosystem that resulted in the growth of the new digital economy. ‘Sender pays principle’ will only help the incumbents and the TSPs and will adversely affect the interests of the startups as well as the users.

 

Regulation of OTT services

It is also submitted that OTT players are not the same as VAS providers and other players cited in the various submissions and they do not need to be regulated further or in the same way as TSPs. The comparison made in various submissions between OTT players and VAS providers comes from an over simplified and superficial view that OTT players and VAS providers function in similar ways. But the fact is that VAS providers were giving out a bunch of services tightly coupled with the core services provided by the TSPs. However, their functionality and access was dependent on a particular TSP, which is not the case with the OTT players as they can be accessed from any TSP or ISP for that matter, which increases their availability. Moreover, in terms of technology there is not much in common between the VAS providers and OTT players, with the former becoming more or less obsolete.

Similarly OTT players are different from TSPs because communication services offered by OTTs and TSPs differ in terms of functionality, in that the former’s reliance on existing networks for content delivery enables them to bundle additional services such as multimedia file transfer, location based services and so on with their primary service offerings. In light of the functional and architectural differences that exist between communication services provided by OTTs and TSPs, efforts at introducing additional regulatory frameworks aimed at leveling the regulatory playing field with respect to fundamentally different business entities would prove to be counter-productive and serve only to stifle innovation and healthy competition in a free market environment.

Moreover, OTT communication service providers are already regulated by a number of general and specific legislations that prescribe numerous general, technical, financial and security related conditions that OTTs must necessarily comply with. Some of the existing legislations that apply to OTTs are:

  • Information Technology Act, 2000

  • Consumer Protection Act, 1986

  • Payment and Settlement Systems Act, 2007

  • Indian Copyright Act, 1957

  • Income Tax Act, 1961

  • Customs Act, 1962

  • Central Excise Act, 1944

  • Foreign Exchange Managements Act, 1999

  • Prevention of Money Laundering Act, 2002

As OTTs are already regulated under the above legislations, we submit that additional regulatory frameworks would be excessive and would hinder the growth of the OTT service industry. We feel the purpose of ensuring comprehensive regulation of OTTs would be better served by a review of how the existing regulations apply to OTTs and making necessary amendments based on the findings, rather than establishing a dedicated regulatory framework from scratch.

Regulations and laws prevailing over telecommunication services such as entry fees, spectrum allocation and charges, tariff regulations etc. cannot be imposed on OTT services for the reason that regulation of websites and applications provided on the Internet would have a direct impact on start-up companies and new entrants who will be forced to comply with regulatory costs notwithstanding the cost of setting up the website in the first place which is very low or even negligible.

The Internet provides an opportunity to everyone, be it college students who are constantly coming up with great, innovative business ideas and even people in rural areas who are able to sell their products on the internet. Over-regulation would mean a loss of all such opportunities and a sudden hindrance to innovation.

Conclusion

To conclude, we reiterate that it does not matter whether the platform used to provide free data services is TSP-agnostic or not. In fact, the premise for the idea of a TSP agnostic platform seems to be that such a platform cannot result in greater control for the TSP and will prevent the TSP acting as a gatekeeper. However, the free data models suggested will result in the bigger players controlling access. In such a scenario, instead of the TSP acting as a gate-keeper, various platforms offering free data will act as gate-keepers.

The Internet is a great leveler and gives options for any service or startup to compete with an established player. But if the bigger players are allowed to control the access of users and user behavior by any means, whether through a rewards platform or through a zero rating service this will result in changing the nature of the Internet. Such approaches will destroy the permission-less innovation feature of the Internet that has resulted in startups like Google and Facebook succeeding.

As per Professor Tim Wu, known among others for his coinage of the term “network neutrality”, models of development must not vest control in any initial prospect-holder, private or public, who is expected to direct the optimal path of innovation, minimizing the excess of innovative competition.4 The argument for net neutrality therefore, is anchored in the protection of certain core characteristics of the Internet that have played central roles in making it a quintessential tool for information exchange in the 21st century, and any understanding of net neutrality that attempts to shift focus from this fact must be seen as subversive.

Thus, any model, irrespective of it being TSP agnostic or not, as long as it is in harmony with the basic tenets of net neutrality and complies with the Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016, by not differentiating on the basis of content and providing complete open access to the the full Internet and not parts of it will work in this context.

All Posts | Jul 05,2016

SFLC.in’s Comments on the TRAI Pre-Consultation Paper on Net Neutrality

The Telecom Regulatory Authority of India (TRAI) on May 30, 2016 published a Pre-Consultation Paper on Net Neutrality, inviting stakeholder comments on 6 broad questions including the core principles of net neutrality, permissible traffic management techniques that may be adopted by Internet service providers, the ideal regulatory approach to net neutrality, and relevant privacy and national security considerations to be borne in mind while speaking of net neutrality from a regulatory standpoint. The core issues involved were largely similar to those from TRAI’s previous consultation paper on regulation of Over-the-Top service providers. SFLC.in submitted its set of responses to the Pre-Consultation Paper along with a concept not in support of the submission. The full text of our responses can be accessed here, and the concept note can be viewed here.

All Posts | Jul 01,2016

SFLC.in’s Comments on the TRAI Consultation Paper on Free Data

On 19 May, 2016 the Telecom Regulatory Authority of India floated a Consultation Paper on Free Data, inviting stakeholder comments on the need for a Telecom Service Provider agnostic platform to provide free Internet to the under-privileged, the need to regulate such platforms, and whether free data needs to be provided over fixed-line broadband in addition to mobile Internet services. Below is the full text of our comments submitted before TRAI:

Question 1: Is there a need to have TSP agnostic platform to provide free data or suitable reimbursement to users, without violating the principles of Differential Pricing for Data laid down in TRAI Regulation? Please suggest the most suitable model to achieve the objective.

The United Nations Special Rapporteur on the promotion of the right to freedom of opinion and Expression, Frank La Rue in his 2011 report has stated that “Given that the Internet has become an indispensable tool for realizing a range of human rights, combating inequality, and accelerating development and human progress, ensuring universal access to the Internet should be a priority for all States. Each State should thus develop a concrete and effective policy, in consultation with individuals from all sections of society, including the private sector and relevant Government ministries, to make the Internet widely available, accessible and affordable to all segments of population”.1 Thus, we as a nation have to take steps to ensure greater Internet access to the entire population.

Research shows that access to Internet provides individuals and firms a vital resource that facilitates innovation, learning and efficiency, all of which lead to greater productivity and thus, greater economic growth. The positive impacts associated with the Internet are possible because of the neutral nature of the Internet. According to Tim Wu, “the argument for net neutrality must be understood as the concrete expression of a system of belief about innovation, whose adherents view the innovation process as a survival-of-the-fittest competition among developers of new technologies”.2

We believe that improving access is important, however the method adopted for it should be in tune with the principles of Net Neutrality and should make available the entire Open Internet to the users and not a select bouquet of services. So long as the entire Internet is made available and there is no discrimination of services or websites on the basis of content, it does not matter whether the platform used to provide free data services is TSP agnostic or not. In fact, the premise for the idea of a TSP agnostic platform seems to be that such a platform cannot result in greater control for the TSP and will prevent the TSP acting as a gatekeeper. However, the free data models suggested in the paper will result in the bigger players controlling access. In such a scenario, instead of the TSP acting as a gate-keeper, various platforms offering free data will act as gate-keepers.

The Internet is a great leveler and gives options for any service or startup to compete with an established player. However, if the bigger players are allowed to control the access of users and user behaviour by any means, whether through a rewards platform or through a zero rating service this will result in changing the nature of the Internet. Such approaches will destroy the permissionless innovation feature of the Internet that has resulted in startups like Google and Facebook succeeding.

As per Tim Wu, models of development must not vest control in any initial prospect-holder, private or public, who is expected to direct the optimal path of innovation, minimizing the excess of innovative competition.3 This innovation theory is embodied in the end-to-end network design argument, which in essence suggests that networks should be neutral as among applications.4 The design of the Internet Protocol follows this end-to-end principle and this has ensured the success of the Internet.

The Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016 embodies the principles of net neutrality in this context that it “mandates that no service provider shall offer or charge discriminatory tariffs for data services on the basis of content, and also no service provider shall enter into any arrangement, agreement or contract, by whatever name called, with any person, natural or legal, that has the effect of discriminatory tariffs for data services being offered or charged to the consumer on the basis of content.”5

Thus, any model, irrespective of it being TSP agnostic or not, as long as it complies with the above regulation, by not differentiating on the basis of content & providing complete open access to the the full Internet and not parts of it will work in this context. Zero rating models do not contribute much to access. Research done by the Alliance for Affordable Internet shows that “88% of people using zero-rating responded that they had used the Internet before using the zero-rated plan. This means that only 12% of zero-rating users surveyed started using the Internet with their zero-rated service.” The study also reveals that “when asked what condition would be most acceptable to get “free data” or zero-rated data, a majority (82%) of users prefer to have the “free plan” valid for a short time or with a data cap, with no restriction on the websites and applications that can be accessed”.6 Thus, compared to free data plans that give restricted access or benefits for accessing parts of the Internet, a free plan that provides access to the Internet is more beneficial.

For the purpose of answering the question we have done an analysis of the suggested models, if they are compliant with the current regulation, their pros & cons and other alternative models that may be used.

1. Reward based model

The reward based model will result in allowing the bigger players to control user behaviour by rewarding users for accessing their websites and services. This will be used as a method to subvert the restriction preventing discrimination of websites and services enshrined in the Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016. Thus, the harm that the Regulations tried to prevent will manifest in another form. In this model, the users will be forced to use the websites and services that provide them rewards or data recharges. This will be to the detriment of other competing websites and services. In this model, the end result is the content provider paying for the data consumed by the end user. Instead of a direct transfer in the case of a TSP owned platform, the money gets routed to the TSP through another platform.

2. Don’t Charge or Toll-free API Model

This model is a Zero Rating model where the players with deep pockets will make their sites available for free. By adding an entity in between the TSP and the content provider does not change the nature of this tie-up and has the same effect as the content provider entering into a tie-up with the TSP. This is clearly in violation of the Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016. In this model also, the payment gets routed from the content provider to the TSP.

3. Direct Money Transfer

This approach can be used only if the Direct Money transfer is controlled by the Government as a means for providing data to the less privileged sections. However, this should not be an option for private players to reimburse users for accessing their websites. If private players are allowed to reimburse users, then it will again be a case of content based discrimination, where a few sites, mainly the bigger players will get to control user access and user behaviour. Moreover, identifying users for the purpose of direct money transfer will also result in the violation of privacy rights of users.

The illustrations given below shows that the suggested models in the consultation paper are in effect the zero rating model which was sought to be prevented by the Differential Pricing Regulation.

Zero Rating Flow ChartToll Free Flowchart

Reward based FlowchartDBT Flowchart

The above models are a rehash of the "Sender Pays" Principle mooted by the European Telecommunication Network Operators Association (ETNO) which was rejected by even by the European Governments at the World Conference on International Telecommunications held in Dubai in December 2012. Such a proposal was even rejected by the Industry representatives from India. However, these models discussed in the consultation paper will in effect result in the sender paying for the data consumed by the user while accessing the website of the sender.

Suggestions

We believe that any approach for providing free data should make available the entire open Internet to the user and should also not tamper with the principles of net neutrality that allow for competition and prevents discrimination.

FREE PACKS WITH A CAP ON VOLUME OF DATA

This is one of the versions of “equal rating” system rooted by Mozilla Foundation’s chairwoman Mitchell Baker.7 Each user gets a free pack each month for their internet usage, independent & on top of their own existing internet packs that they may or may not have. The free pack has a cap on the volume of data, like 500 MB per month. Similar model8 has already received success, wherein Mozilla has partnered with Orange in African and Middle Eastern countries where users purchasing a $40 (USD) Klif phone (which runs on the Firefox operating system) receive unlimited talk, text, and 500 MB a month for 6 months.

ADVERTISEMENT SUPPORTED DATA PACKS

This is another version of “equal rating” system. This model supports the creation of revenue for the TSPs through advertisements. Users are given certain data credits for watching them while browsing the internet. Mozilla has seen quite a success in Bangladesh wherein “the foundation has been working with Grameenphone (a Telenor-owned company) in Bangladesh where users can receive 20MB of unrestricted data per day after watching a short ad in the phone’s marketplace.”9

FREE PACKS USING 2G NETWORKS

This model provides the entire internet, with no restriction on volume or content, but operates on a 2G network. Thus, effectively this model makes the 2G Network a generic low-speed zero rated mobile network.10 This model is better for ISP bandwidth usage and easy on infrastructural demands.

FREE WI-FI HOTSPOSTS, COMMUNITY CENTRES, IN-TRANSIT MODEL

This method would enable people to access the Internet in public places by creating Wi-Fi hotspots from a single connection. Government, TSPs and Other Companies can jointly collaborate with certain venues like libraries, schools, gram-panchayat offices, railway stations, airports, public transportation systems & cabs to provide Wi-Fi connectivity & free internet to the public. Along with providing free Wi-FI, some of these venues can even act like community centres aimed at being a forum for digital literacy. Companies/TSPs paying for the data can get a 'brought to you by' attribution like the free pack or equal rating model & it can even be counted towards its CSR initiative.

 

Question 2: Whether such platforms need to be regulated by the TRAI or market be allowed to develop these platforms?

We think that a “mixed economy” approach will be better suited for such kind of platforms. Allowing market to develop such platforms can lead to innovative models. However, lack of regulatory oversight and complete reliance on market forces will lead to collapse of such models, lead to anti-competitive effects and will result in violation of the principles of net neutrality. Thus, a mixed economy approach that focuses on both innovation & net neutrality should be the way forward. As mentioned in our answer to the previous question any free data model should provide the entire open internet and should not be limited to a select bouquet of sites.

 

Question 3: Whether free data or suitable reimbursement to users should be limited to mobile data users only or could it be extended through technical means to subscribers of fixed line broadband or leased line?

Broadband is defined, as per Notification No. S.O. No. 4-4/2009-Policy-I dated July 18, 2013 issued by the Department of Telecommunications, as a data connection that is able to support interactive services including Internet access and has the capability of the minimum download speed of 512 kbps to an individual subscriber from the point of presence (POP) of the service provider intending to provide Broadband service.

As indicated by TRAI's Indian Telecom Services Performance Indicators report for the quarter October – December 2015, out of the 331.66 million Internet subscribers in India, 311.69 million subscribe to mobile Internet services, while a mere 19.98 million subscribe to fixed-line Internet services.11 In other words, roughly 94% of Indian Internet users access the Internet through their mobile devices, leaving around 6% as fixed-line Internet users, indicating a clear preference for mobile Internet services over fixed-line amongst Indian Internet users.

Moreover, the access and billing patterns of mobile and fixed-line Internet see wide variance between each other. Whereas the owners of all Internet-capable phones will have on-demand Internet access built into their subscription plans by default, fixed-line Internet requires prospective customers to approach service providers and purchase dedicated data plans along with the requisite customer-premise equipment such as modems and/or routers. In the absence of volume-based data plans, mobile Internet charges are levied on the basis of data consumed in given billing cycles.

Fixed-line Internet subscriptions on the other hand, follow multiple billing systems, where subscribers are able to choose from both data-capped and uncapped plans. Subscribers of the former category are generally allotted monthly quotas of high-speed data, upon the exhaustion of which additional charges are levied according to the subscribers’ data use. Data-uncapped plans allot subscribers fixed quotas of high-speed data, upon whose exhaustion Internet speeds are restricted to baseline broadband levels albeit with no additional costs relative to data consumption. There are substantial costs to be borne by the customer in procuring a fixed-line Internet connection including equipment costs, installation charges, monthly rentals and the data charges themselves. As a result, any customer who is in a position to procure a fixed-line Internet connection to begin with will derive little to no value from free-data and reimbursement initiatives, where the amount of Internet use enabled by such initiatives will inevitably be significantly lesser than their paid counterparts.

For the above reasons, it is our submission that any initiative aimed at bringing Internet access to those unable to afford the relatively high cost of data should focus on the mobile Internet rather than fixed-line Internet services. However, it must also be borne in mind that any future regulation concerning free-data or reimbursement initiatives must make no distinction between Internet access via mobile as opposed to fixed-line services. The Internet is the Internet irrespective of the mode of access, and there must be no differences in its regulatory treatment in this regard. Regulations are necessary for both mobile and fixed-line Internet services to avoid gamesmanship designed to avoid the Regulations against differential pricing promulgated by TRAI, and the regulator must consider if practices that invariably harm the open Internet work similarly on mobile or fixed-line services.

 

Question 4: Any other issue related to the matter of consultation.

In the Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016, the proviso to Section 3(2) exempts data services provided over “closed electronic communications networks” (CECNs) from the general prohibition on differentially priced data services. While the proviso does make it clear that the prohibition would still apply if CECNs are leveraged in such a manner as to circumvent it, some industry players and consortia have been observed attempting to obfuscate this understanding by claiming a lack of clarity as regards the ambit and application of the proviso.

We wish to submit that the Regulations in general and the proviso to Section 3(2) in particular are both well-grounded in reason, and leave no room for ambiguities in their interpretation. As per the Regulations, differentially priced data services offered over the open Internet stand prohibited at all times, whereas such pricing arbitrages in internal CECNs that are separate and distinct from the open Internet will be allowed and will attract no financial disincentives from the regulator. Attempts at circumventing this regulatory premise are easily identifiable as such – offering content from particular content providers at discounted rates over a CECN to the subscriber base of a TSP for instance, is a clear circumvention of the prohibition on differential pricing.

That being said, we submit that it would nevertheless be beneficial in the interest of precluding further efforts at obfuscation and compromise to clearly outline the scope of exemption under Section 3(2) by way of illustrative examples of both permitted and prohibited uses of CECNs as a means of data delivery at differential tariffs.

We reiterate that TRAI is the apposite sectoral regulator for the telecommunications industry, and having already laid down a model Regulation against differentially priced data services, the focus going forward must be on ensuring its sound implementation rather than entertaining unfounded exhortations for its reconsideration.

 

Footnotes

1The report is available at http://www2.ohchr.org/english/bodies/hrcouncil/docs/17session/A.HRC.17.27_en.pdf

2Tim Wu, Network Neutrality, Broadband Discrimination, Journal on Telecom and High Tech Law, available at:

http://www.jthtl.org/content/articles/V2I1/JTHTLv2i1_Wu.PDF

3Ibid.

4J H Saltzer et al., End-to-End Arguments in System Design, available at:

http://web.mit.edu/Saltzer/www/publications/endtoend/endtoend.pdf

5 Regulation 3, Chapter II of The Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016

6 The report is available at http://a4ai.org/is-zero-rating-really-bringing-people-online/

7Mozilla’s Mitchell Baker offers alternatives to zero-rating for Internet services -

http://www.medianama.com/2015/05/223-mozillas-mitchell-baker-offers-alternatives-to-zero-…

8https://blog.mozilla.org/blog/2015/03/01/firefox-os-proves-flexibility-of-web-ecosystem/

9Supra 10

10https://manypossibilities.net/2014/11/a-better-approach-to-zero-rating/

11Telecom Regulatory Authority of India, Indian Telecom Services Performance Indicator Report for the Quarter ended December, 2015, May 18, 2016, p. ii, available at: http://www.trai.gov.in/Content/PerformanceIndicatorsReports/1_1_PerformanceIndicatorsReports.aspx, last accessed on June 30, 2016

All Posts | Mar 21,2016

Without rules, Sahibs may own your data

Now that the inevitable death of Free Basics by Facebook has happened and the dust has settled, the real outlines of the government of India’s Internet and Digital India policies are coming into focus.

The four pillars of the government’s intentions have been declared and are already under construction: a policy to prefer free and open source software in all egovernance software solutions; new guidelines on patenting ‘computer-related inventions’, which will adhere strictly to the prohibition on patenting computer programs; comprehensive reliance on Aadhaar to provide a biometrically-backed digital identity for every Indian citizen; and the ‘India Stack’, a set of software designs that build atop the Aadhaar unified digital identity to provide cashless payment systems available to all Indians, electronic government services and a ‘consent layer’ for transactions exchanging Indians’ personal information in the private market.

This is an immensely ambitious agenda, but how this agenda is fulfilled, and, in particular, what the consequences are for freedom in the world’s largest democracy, will depend on the fifth pillar of the new Digital India. This pillar is protection of all citizens’ right of privacy.

About the role of privacy in the future Digital India, the government is plainly ambivalent. Having announced it would seek a definitive Supreme Court ruling in the ongoing Aadhaar litigation, the government last week chose instead to rush Aadhaar legislation through Parliament under the contentious claim that it represented a money bill insulated from Rajya Sabha consideration, thus avoiding any significant form of public policy debate.

The Aadhaar legislation ensures that there will be a single database, at CIDR, holding fingerprint, retinal scan and, eventually, full genomic information on every Indian, along with name, address, phone number and — in a continuing reminder that every Indian woman is treated as some man’s property—the name of each woman’s husband or father. From this data, the ordinary conduct of the simplified statistics, we call data science, can infer other pieces of sensitive information with almost flawless reliability.

The rules concerning access to and operations on this data — which will be determined by future subordinate legislation — whether the surveillance and control of will be enormously facilitated; whether each Indian’s purchases, savings, gifts and receipts will be trackable, controllable and preventable by anyone with sufficient political power or a stolen set of digital keys.

The Bill accords the government an unrestricted right to access and use CIDR’s database for purposes of "national security", a term nowhere defined in this legislation, or anywhere else in Indian law. Given that this database can be used to identify, locate and control people — and the likelihood that any uses made for "national security" will be kept secret and outside the scope of judicial review —only the declaration by the Supreme Court of the broadest and most powerful individual constitutional right of citizen privacy can prevent the inevitable misuse of this power by some future government.

Ministers of the present government who were jailed under the Emergency declared by a government without such tools, or whose phones were surveilled by a more recent past government with lesser tools, should be among those most concerned by the possible consequences The government’s concern with acquiring free and open-source software and its decision to resist the blandishments and threats of the multinational IT companies speak to the strongly nationalistic quality of the Digital India vision.

But without an equally clear and determined set of policy commitments to protect the privacy of Indian citizens comprehensively, the digitisation of identity and payment threatens to replace foreign "white" owners of Indians’ lives with domestic "brown" ones. Because information is power, such an oligopoly of data, if it is not imperialism, would be tyranny.

This article was written by Eben Moglen and Mishi Choudhary for The Economic Times Blog published on March 21, 2016.

All Posts | Feb 10,2016

Legality of Internet shutdowns under Section 144 CrPC

India has seen numerous Internet shutdowns for various reasons in this year, all under the same provision of law - Section 144 of the Code of Criminal Procedure, 1973 (CrPC). This section resides as the sole occupant under the chapter of 'temporary measures to maintain public tranquility' and gives State Governments the power to issue orders for immediate remedy in urgent cases of nuisance or apprehended danger. However, the increasing use of this provision to completely shut down the Internet is becoming a cause of concern, for the reason that it amounts to a direct violation of the fundamental right to freedom of speech guaranteed under Article 19(1)(a) of the Constitution of India.

The Internet is not only a medium to exercise the right to free speech and expression, but is correctly identified as a catalyst in the process of imparting, receiving, and sending information. This freedom is undisputedly fundamental for a democratic organization, moreover it is an enabler of other socio- economic and cultural rights. Similarly, the Internet is highly instrumental in facilitating a wide range of rights by providing a revolutionary platform in realization of free speech. Frank La Rue, the Special Rapporteur on protection and promotion of the right to freedom of opinion and expression appointed by the United Nations, while focusing on the point made above, also highlighted the changing nature of this right in relation to Internet proliferation in his report dated 16 May 2011. Furthermore, while addressing concerns about censorship, the Special Rapporteur noted that arbitrary blocking of complete Internet services is a disproportionate action in any situation. Internet shut down even with justification, negates the possibility of targeted filtration of content and would render inaccessible even content that is not illegal.

In this post, we aim to understand the legal position accorded to Section 144 CrPC, its relation with Article 19 of the Indian Constitution, and its increasing usage as a provision to shut down the internet services.

Dissecting Section 144

From a bare reading, the relevant portion of Section 144 can be carved out into three basic elements:

  • The authority to issue orders: lies with the District Magistrate, a sub divisional magistrate or any other Executive magistrate specially empowered by the State Government in this behalf.

  • The grounds on which S. 144 can be invoked: The reasons include: a)sufficient ground, b) requirement for immediate prevention, and c)speedy remedy to prevent a likely obstruction, annoyance or injury to any person lawfully employed, or danger to human life, health or safety, or a disturbance of the public tranquility, or a riot, or an affray.

  • The intended recipient: After determining sufficient ground and through a written order, the authorized can direct any person to abstain from a certain act or to take certain order with respect to certain property in his possession or under his management.

Between 2013 and 2015, Internet services have been completely shut down in certain parts of India around seven times, where five of them happened in the year 2015 alone. In 2013 and 2014, Internet services were banned in parts of Kashmir and Gujarat respectively. 2015 started with an Internet blackout in Nagaland in March to restrict circulation of a lynching video of a rape accused, followed by parts of Gujarat being cut off in late August. Manipur and Kashmir were disconnected in September owing to violence in a small town of Chudandrapur and prohibition on cow slaughter respectively. More recently in December, Rajasthan experienced an Internet shut down in 11 districts.

The Supreme Court in case of Madhu Limaye and Anr v. Ved Murti and Ors. ((1970) 3 SCC 746), has held that the scope of Section 144 extends to making an order which is either prohibitory or mandatory in nature and 'urgency' is the only criteria that can justify an order under this Section. With the wide range of powers granted to the State government, including the power to grant the order ex parte, the ambit of this provision has been mostly used to curb unlawful assemblies and processions that are anticipated as a danger to public tranquility. This vaguely worded provision, that includes terms like 'annoyance', was constitutionally challenged in the Supreme Court in 1970, but retained its place when it was held that the likelihood of its misuse is not a reason enough for it to be struck down. Even though the appointed authorities have the discretion to decide the measures required to curb a situation, their actions are not protected from judicial review. The Supreme Court in the case of Ramlila Maidan Incident v. Home Secretary, Union of India & Ors. ((2012) 5 SCC 1), illustrated that the degree of threat involved for the use of this provision need not be 'quandry, imaginary or a merely likely possibility, but a real threat to public peace and tranquility.'

Although in the past this provision has been extensively used to break unlawful assemblies, rarely has any communication system, except for the Internet been threatened by the overreaching power made available under this section. A blanket ban on Internet services, mobile/broadband or both, is an order given to a person, in this case the Internet Service Provider (ISP), who holds the reigns to this service. Although a general order is justified under this section, it has traditionally been used to issue orders directed at particular persons or groups . The Apex Court clarified in the case of Madhu Limaye and Anr. v. Ved Murti and Ors. that if the action sought by the empowered authorities is too general in its scope, legal remedies of judicial review should be claimed.

The Internet is not merely a communication system, but is the chosen platform for business and e- commerce, e- governance programs, a site for research and information, among many other things. Consequently, a complete shut down of the Internet has implications for the entire population of that area, which includes innocent people who have no role in causing the apprehended danger or nuisance. This in turn causes wide spread censorship and a violation of citizens' fundamental right to free speech and expression under Article 19 (1)(a) of the Constitution as it prohibits the sending, receiving, and dissemination of information.

Relationship of Section 144 & Article 19 (1)(a)

The freedom of speech and expression that is enshrined in Article 19 (1)(a) of the Indian constitution has been given a plethora of titles by the Supreme Court including, Ark of the Covenant of democracy, and market place of ideas. It has also been rightly established that this right is not absolute and can be curtailed based on reasonable restrictions such as 'in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence' as enumerated in Article 19(2) of the Constitution.

Over the years, a rich and elaborate jurisprudence has developed around this fundamental right. Since the inception of the Constitution, the Supreme Court has interpreted and devised suitable tests to prevent the unlawful restriction of Article 19(1)(a), articulating the degree of reasonableness and adequacy of measures required and nuanced difference between different types of speech.

The Apex Court has rightly held that the guaranteed freedom of free speech and expression can be restricted only if a danger qualifies as an immediate threat as per Article 19(2). This danger should not be 'remote, conjectural or far fetched, but have a proximate and direct nexus with the expression sought to be restricted'. In the context of Section 144 CrPC, the Supreme Court mentioned that along with the test of direct and proximate nexus, the State Government has a duty to ensure that the measures imposed for restricting this right are least invasive in nature and also unavoidable in the given circumstance. The type of speech that can be restricted was clarified by the Supreme Court in the recent landmark judgment of Shreya Singhal v. Union of India ((2015) 5 SCC 1). While highlighting the subtle difference between discussion, advocacy, and incitement, it was held that only speech that may lead to 'incitement' can justifiably be curtailed under Article 19(2). Therefore, when this right is restricted, firstly, there has to be surety of a looming danger that has a 'direct and proximate nexus' with the expression being curtailed, secondly, this expression needs to qualify as 'incitement' and not mere advocacy of one's opinion, and thirdly, the measure imposed should be the last resort and unavoidable.

Section 144 is a temporary remedy, under which an order is valid only for a period of two months as per sub-section 4 of this provision. This order can be extended to a further period of six months if the State Government deems it necessary to prevent riot, affray, or for the health and safety of citizens. An order under this section is prohibitory in nature, and the Supreme Court has differentiated between measures that have a 'prohibitory' and 'restrictive' effect. It has pointed out, that the words 'prohibition' and 'restriction' cannot be used interchangeably. The threshold for 'prohibiting' a particular activity is higher and must indeed satisfy the requirement that 'any lesser alternative would be inadequate.' Hence, though, the use of this particular section has been validated in times of emergencies, where actions are taken at the discretion of the empowered authorities, these measures cannot be excessive or arbitrary.

Internet, Free Speech & Section 144

The shut down of mobile internet services caused an uproar by the effected parties and civil society activists and this action taken under Section 144 was challenged in the Gujarat High Court as a Public Interest Litigation (PIL) in Guarav Sureshbhai Vyas v. State of Gujarat (W.P. (PIL) No. 191 of 2015). It contended that the power to block certain information on an online/computer related forum was given in Section 69A of the IT Act, hence the State Government was not competent to use Section 144 CrPC to restrict the use of internet. Section 69A, along with the Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009 provide for a mechanism to block information from public access through any computer resource by a direction from the Central Government or any officer specially authorized in this behalf. This direction is only to be given when the officer deems it necessary or expedient, and 'in the interest of sovereignty and integrity of India, defence of India, security of the state, friendly relations with foreign states or public order or for preventing incitement to the commission of any cognizable offence relating to the above.' The procedure for issuance of this order is laid down in the above mentioned rules where the effected party is given a reasonable opportunity to be heard as per Rule 8(1).The final order given for such blocking to a Government agency, or intermediary has to have its reasons recorded in writing as stated under Section 69A(1) of the IT Act.

While delivering the judgement for the case challenging the authority behind shut down of mobile internet in Gujarat, the Gujarat High Court defended the State Government's authority under Section 144 CrPC. It held that the state government is a competent authority under this provision and it depends upon their discretion to exercise the power with prudence, public duty and the sufficiency of action in their view. Furthermore, the court refrained from exercising appellate power to decide upon the 'sufficiency of matter to exercise power under Section 144'. It limited its decision on if there was an 'arbitrary exercise of power (by the state government) without any objective material.' The petitioners in this case argued for the use of Section 69A to block specific social media websites, through which the messages apprehended to cause violence were being spread. The court, disregarding this point, maintained that the scope of operations of Section 69A and Section 144 were different and overlapped, only to cover 'public order'. The court concluded that state government, which had the rightful authority in times of emergency, deemed fit to block entire mobile Internet services, failing which, the situation would have worsened.

This judgement rests its reasoning on the 'discretionary' power and 'objective material' found by the government of Gujarat for a complete mobile Internet shut down in the state for over a week. At this point, it is important to recall the Supreme Court's pertinent judgement in the case of Ramlila Maidan Incident v. Home Secretary, Union of India & Ors wherein it was highlighted that Section 144 is to be used as a last resort, when 'a lesser alternative would be inadequate.' In the present judgement, pulling the plug on mobile internet was not the Gujarat Government's last resort. The state government ignored the option of making a request to the nodal officer designated by the Central Government under Section 69A to specifically block the social media websites, like Facebook, Whatsapp, Twitter that were reportedly used by Mr. Hardik Patel to communicate with the public and spread this propaganda for inciting caste based violence in the State.

The importance of Internet is not limited as a platform for exercising freedom of opinion and expression, but over the years, it has also entrenched every aspect of the society; from business models, communication systems, education, transport facilities, and research and information to name a few. Apart from the legal lacunae in the judgement of Gujarat High Court, the state of Gujarat also recorded heavy losses suffered by businesses during the shut down. The e-commerce businesses, web based or application based, cab companies, bank services, hotel and travel services were among the major categories of businesses that were drastically hit during the shut down of mobile Internet in the state of Gujarat for over a week in August, 2015. This sector, especially start-ups have become immensely integrated and dependent on the internet for their orders, delivery notifications. They make use of mobile applications to make it convenient for consumers to buy their products. Furthermore, businesses who sell their commodities on platforms like Flipkart, eBay, Amazon complained of losses and were concerned about customer satisfaction from their products because the extent of their sales depend on customer reviews and ratings, and a delay in delivery or notification may not fare well for their record. In one week of mobile Internet being cut off for Gujarat, these e-commerce websites and applications recorded a drop of 90% in their businesses.

Apart from e-commerce, banking services accrued a loss worth Rs. 7,000 crore in one week due to the inability to conduct transactions, especially in businesses that are dominated by the use of credit/debit card. As SMS services were also blocked during this time, generating OTPs (One Time Password) to facilitate the process were also disabled. Moreover, the Department of Telecommunications (DoT) claimed that telecom operators that deal with internet services were also significantly hit and incurred losses of Rs. 30 crore in this short period. One private telecom operator in Vadodara, who provided 3G internet services exclaimed that his losses ran into Rs. 25 lakh per day for the period when mobile internet was cut off. The heavy losses accrued by business due to this untimely shut down of the internet also amount to an infringement of their freedom 'to practice any profession, or to carry on any occupation, trade or business' as laid down under Article 19(1)(g) of the Constitution. This fundamental right can only be limited on the following three grounds as laid under Article 19(6):

  • Reasonable restrictions in the interest of general public;

  • Any law relating to the professional or technical qualifications necessary for carrying on any profession, trade, or business; and

  • Any law relating to the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.

The phrase 'in the interest of general public' has been held to include 'public order, public health, public security, morals, economic welfare of the community and the objects mentioned in Part IV (Directive Principles of State Policy) of the Constitution.' In the present scenario, due to a restriction in accessing the internet, businesses that rely on the internet as their operating medium were unduly constrained, and incurred significant monetary losses, thereby affecting their fundamental right to practice any profession, or carry on with any trade, business or occupation.

Internet fosters the burden of being a platform for exercising the right of freedom of speech and expression, along with acting as the backbone for a growing economy. The power under Section 144 CrPC is to be used with caution and only when there is 'an actual and prominent threat endangering public order and tranquility'; it should neither be arbitrary, nor subvert the rights protected by the Constitution. Similarly, restriction of free speech is also qualified by the direct and proximate nexus of the expression to the danger sought to be prevented. Moreover, as has been clarified by the Supreme Court, Section 144 and the restriction on free speech should only be used as the last resort, when a lesser invasive alternative is not available. Section 144 is a means to curb apprehended danger and nuisance in emergencies, but its use to ban Internet access for a region is an excessive and arbitrary use of powers granted to the state government under this provision. Additionally, a complete shut down of this system is a monumental restriction on the guaranteed right of free speech and expression. Therefore, pulling the plug on entire Internet under Section 144 of CrPC is not only a colossal violation of Article 19 of the Indian Constitution, but is also not the rightful use of powers under Section 144 of CrPC.

UPDATE: A Special Leave Petition (SLP) challenging the order of the Gujarat High Court in the case of Gaurav Sureshbhai Vyas v. State of Gujarat on the use of Section 144 for internet shut downs was dismissed by the Supreme Court on 12th February, 2016. While upholding the power of the state governments to restrict access to internet, Chief Justice T.S Thakur remarked that "It becomes very necessary sometimes for law and order."

 

All Posts | Jan 20,2016

Free Basics Investigation

So while all of us were busy turning the consultation paper on differential pricing of data services put out by TRAI into a battle ground for Net Neutrality in India, on the sidelines, we decided to checkout Free Basics in action. So we got hold of a Reliance SIM card and a dying smart phone to take the free* ride.

Dear TRAI, Free Basics is Still Around

Reliance is defying TRAI's order to shut down Free Basics

We started off with the possible vanity of the attempt since TRAI had already asked Reliance Communications to put the Free Basics program on hold, and Reliance said it has complied. However, we were greeted with the welcome message and then the confirmation button to accept Facebook's terms, Data policy, cookies policy and privacy policy.

Welcome to Free Basics

Turns out, Reliance chose to carry on providing Free Basics on its network, openly violating the regulator's order to temporarily shut down the service. Neither is Reliance or Facebook informing its users about the order.

Websites on Free Basics

There are about 135 websites registered with Free Basics. A curated, most likely hand-picked list of 45 services is provided as soon as the app opens, and the rest of them are hidden under 'More Services'.

Primarily, these are information oriented websites like news, encyclopedia, guides and tips. Further, there are services like classifieds, blood donation etc.

To see the full list of services available on Free Basics, browse through the below gallery of screenshots.

For First-time Internet Users

There is one site that introduces users about the basics of Internet on a site that isn't particularly branded. Based on traffic analysis, we determined that the site is served from an IP on Reliance's network. There is a disclaimer in the footer denying responsibility for the accuracy of information on the site.

Wikipedia on Free Basics

The only website in Free Basics currently that allows users to become content creators is Wikipedia, except sending comments on news articles. Although we weren't able to get the comment submission form load up on TOI's articles.

The Wikipedia editing experience seems to be the same as editing it over a regular 3G network. Interestingly, Free Basics doesn't use Wikipedia Zero, the project from Wikimedia Foundation to provide free-of-cost access to Wikipedia. WMF has taken a stand on Net Neutrality different from that of its usual friends and allies in support of this project and its aims. Free Basics seems to be using the regular method of accessing Wikipedia based on (a) the URLs being requested and (b) the absence of the usual banner on top of Wiki articles which notify its users about free data usage.

Music and Video

There are no video sites like Youtube available through Free Basics. We were however able to use a music streaming service from Hungama.com which had exactly 4 songs available for free. Unlike the dynamic nature of their service on the 'full' website, the list on the free basic version seems to be a static one, which has the same 4 songs available for a few days that we have been observing.Any of the other links that offer more music, pop up a message notifying the user about going out of Free Basics and applicable charges for further usage.

This is an example of how Free Basics users could be subjected to inferior quality services. The warning about data charges being applicable for accessing anything beyond the meagerly available content, makes the user give a second thought before proceeding.

Free Basics Hungama Music Free Basics Hungama Exit

Personal Blogs

Some of the sites listed in Free Basics appear to be personal blogs of individuals. Here's a direct link to one such blog which appear as is on Free Basics.

Technical Details

The Proxy Server

We tried to understand how Free Basics handles the proxy setup to relay connections from partnering websites to the users.This is the proxy server which acts as the gateway to the Facebook's version of 'free and basic' Internet. This server

After clicking on the service from the list, the app sends a request to the proxy server over HTTP with the target website's URL and the further communication happens over SSL which we haven't been able to inspect so far. Watch out for more updates about this.

Free Basics Proxy Requests

Here's an example of how the proxy request is structured. These requests are sent to the proxy for every single resource required on a web page, like images, CSS styles, Javascript code etc.

Free Basics Proxy Requests

 

Data Usage

We used Free Basics for almost an hour exploring the content on its partner websites. We also streamed all the 4 'basic bollywood' songs from Hungama's website to account for some significant data usage. We checked the available data balance before and after the one hour period. The balance report from Reliance confirms that the data usage through Free Basics has been zero rated by Reliance. The data usage accounted by the phone towards Free Basics app was about 40MB during that period, while Reliance reported only a consumption of about 1MB (used by other apps on the phone during that period).

Data Usage Report from Reliance

Data Usage Report on Phone

Lifetime "Free" Facebook

Of course, when we were away, there were these promotional text messages once in a while from Reliance, informing us about zero-rated Facebook for lifetime.

Welcome to Free Basics

Watch out for more updates on this post, as we continue to find out more about Free Basics. Tweet to us @SFLC.in about what else you want to know.

All Posts | Jan 14,2016

Counter Comments: TRAI Consultation Paper on Differential Pricing

Based on the comments received by TRAI on the Consultation Paper on Different Pricing for Data Services, SFLC.in has submitted these counter comments as solicited by TRAI. Below is the full text of the counter comments submitted by TRAI.[PDF]

Executive Summary

The Internet creates new problems in policy, but they are not unprecedented. Traditional patterns of anti-competitive conduct recur, but the complexity of the technological details affords rich opportunities for obfuscation and confusion. After reviewing majority of the comments submitted by other parties, we offer our responses to the prominent arguments in an attempt to clear that confusion. The following points are highlighted in our submission:

  • Internet is not cable television.

  • Differential Pricing as applicable in other industries does not necessarily transpose to the Internet.

  • Differential Pricing as proposed by Telecom Service Providers (TSPs) and Internet Service Providers (ISPs) to split the Internet into various slices and to price them separately violates their license agreements to provide Internet access.

  • With TSPs slicing up the Internet, it becomes impossible for the start-ups to reach their customers unless they enter into deals with each ISP to get entry to their islands of access.

  • Any competitive practices such as the ones proposed by TSPs cannot be allowed without proof of extraordinary social benefit and that benefit cannot be unequal access.

  • Internet unlike DTH is not a one -way traffic medium and does not just constitute a medium where content is consumed by users.

  • There are better models than differential pricing to provide wider Internet access.

  • Misleading and incorrect analysis of how differential pricing is being treated in United States and European Union has been presented.1

  • Common Carriage rules must apply in order to prevent anti-competitive collusion.

  • VOIP services compete with traditional telephone services, as they should, because all communications, whether characterized as "telephone calls" or "data packets" are in fact the same.2

  • Regulator's job is not to save old and dying business models but keep anti-competitive and other misbehaviour by players in check.

  • Not allowing differential pricing is the correct modus operandi in contrast to an overtly burdensome, new and expensive infrastructure.

  • Vertical integration in whatever direction would give the intermediary vendors of TSPs and ISPs the whip hand in the key information market of the 21st century, and thereby throughout society.

  • In the European Union the Recommendation CM/Rec (2016) of the Committee of Ministers to member States on protecting and promoting the right to freedom of expression and the right to private life with regard to network neutrality adopted on January 13, 2016 by the Council of Europe, it is recommended that "3.1. Internet service providers should not discriminate against traffic from other providers of content, applications and services which compete with their own products".

  • The Canadian Radio-television and Telecommunications Commission (CRTC) issued a decision on 29 January 20153 directing Bell Mobility to eliminate its unlawful practice of exempting its mobile TV service from data charges. It also held the data exemption of a TV app of Videotron to be unlawful.

  • Proposals to allow price discrimination because data is "time-sensitive" or "more secure," as though HTTPS packets could be priced differently from HTTP packets, are the essence of anti-competitive routing.4

  • If there is no business case for TSPs to offer free data services, why some providers insist that no consideration of any kind is being exchanged in proposals like "Free Basics"?5

  • No telecommunications service provider should be allowed to sell the traffic it carries for its low-income subscribers, in bulk, to a data-mining company for surveillance and analysis, which thereby achieves a competitive advantage in the sale of Internet-based advertising.

  • Important considerations like sale of de-anonymised packets of poor users cannot be overlooked by pleading lack of jurisdiction.

Detailed Analysis

  1. All communications, characterized as "telephone calls" or "data packets" are the same: VOIP services compete with traditional telephone services, as they should, because all communications, whether characterized as "telephone calls" or "data packets" are in fact the same. What other commentators call "price arbitrage" by consumers between these services should be called "user efforts to eliminate anti-competitive routing practices," otherwise known as "net neutrality."

  2. Case-by-case approach in the absence of network neutrality rules will be ineffective with no real benefits to the regulator or the public: In contrast to the simplicity and low regulatory cost of a common carrier regime, even the supporters of some differential pricing, such as NASSCOM, concede that this would absolutely require individualized, case-by-case regulatory review before the inception of such pricing schemes. They concede that this would require the creation of new and expensive social infrastructure, the cost of which must be netted out against any hypothetical benefits. No party, no matter how audacious its taste in obfuscation, has ever asserted that vertical integration and price discrimination will never result in serious competitive harm. Instead, the expensive talent and fancy titles are employed to argue that in specific situations a wise regulator might discover occasional reasons why the dangers of such arrangements are absent or can be behaviourally confined. The cost of such a system, however, falls on the society and its regulators: the regulators must be committed to an indefinite series of complex reviews of individual deals, which the regulated parties evolve to make the task of the regulators as difficult and time-consuming as possible. Any acquaintance with the processes of merger approval or rule-making at the Federal Communications Commission in the United States, and the years of additional litigation that usually follow, shows the depths into which such regulators can be dragged. Any failures of regulatory scrutiny are visited on society through the costs in diverse markets of collusion between some market participants and the transportation infrastructure providers.

    The alternative is to prohibit all such arrangements. This deprives society of some value, arguendo, which accrues from the small number of arrangements facially suspect, but which a perfectly vigilant regulator with infinite resources for analysis and deliberation would have discovered to be justified exceptions to the general rule. Despite all the shaded rectangles in all the graphs in all the articles by the best and highest-priced "independent" scholars, there is little reason to believe that game is worth the candle. Blanket prohibition on vertical integration of telecommunications network infrastructure with "layer seven" services, and similarly broad prohibition on discriminatory or differential pricing - that is, the treatment of telecom operators as common carriers - is a better and simpler solution. Some speculative welfare loss from over-regulation can be identified, more easily in theory than in reality. Vast harms otherwise difficult to reverse and productive of significant dangers to democracy, are cheaply and reliably avoided.

  3. If FCC network neutrality Rules are adopted by India and TSPs are treated as Common Carriers, a case-by-case approach may be feasible: Reference to the US FCC's "case by case" approach to zero-rating in the submissions of Facebook is misleading. The FCC's Open Internet Order changed the treatment of ISPs from "data services" to "telecommunications services," which subjected the operators to common carriage principles. In that context, FCC said in two short paragraphs in a landmark order, it would then take a case-by-case or "wait and see" attitude towards possible exceptions. If, indeed, TRAI were going to adopt the FCC's approach and impose "neutrality" in the form of common carriage rules, we would then agree with other commentators that an FCC-style openness to case-by-case exceptions would be feasible.

  4. TV is dying and giving way to streaming, leaving TSPs in a state of panic: The political economy of this inquiry is left indistinct, not surprisingly, by the TSP commentators. In wealthy societies, as smartphones become nearly ubiquitous, broadcast and cable television is dying, replaced by video streaming over wireless networks. Handset manufactures can profitably make smartphones capable of 1080p, in effect pocket HDTVs. The various Internet and transmission architectures, none of them so far fully mature, that are candidates for the still-undetermined technology called "5G" will have to carry these vast volumes of video data packets. TSPs fear that the primary profits in such a post-TV world will belong to content licensors rather than packet transport wholesalers. In India, Aircel already provides free data service at 2G speeds to subscribers everywhere. In the US, T-Mobile is trying to persuade the FCC that it should be allowed to provide zero-rated "Binge On" video service, as long as it is allowed to throttle all video from 1080p to 480p, in effect offering free LDTV service so long as consumers can be prevented from getting HDTV quality instead.

    But from a competition policy point of view, allowing such arrangements to replace broadcast and cable TV is just as deadly as it would have been to permit movie studios to own movie theatres in the mid-20th century, simply with the direction of vertical integration reversed. Around the world, not only in India by any means, highly-paid professionals are busy preparing arguments about how "the Internet should be structured like cable television," that is, broken up into a series of "channels" that can be marketed in bundles. This would give the intermediary vendors of transport services the whip hand in the key information markets of the 21st century, and thereby throughout society. But they are regulated industries, and their grab for power and pre-eminence should be resisted by democracies everywhere.

    The political economy after TV is only one example of the way in which commentators, primarily TSPs, want to ignore or modify the nature of the Internet by distinguishing among packets. Proposals to allow price discrimination because data is "time-sensitive" or "more secure," as though HTTPS packets could be priced differently from HTTP packets, are the essence of anti-competitive routing. If transport intermediaries were allowed to price-discriminate services in this fashion, all innovation in the Internet would cease, except at the whim or with the permission of the carriers.

  5. Differential pricing on the Internet and in other sectors: A common contention raised by TSPs is that differential pricing is prevalent in other industries and that there is nothing wrong in having such a model for data services. However, the differential pricing model advocated by TSPs is quite different from the business models in other sectors. The TSPs are granted a license to provide the service of access to the Internet to consumers as per their license agreements with the Department of Telecommunications. They are free to provide different pricing options based on download speed, download limit, usage time etc. However, what the TSPs are proposing is a permission to split the Internet into various slices and to price them separately. This is in violation of the license to provide access to the Internet and interferes with the basic structure of the Internet. When utilities like water, gas and power are priced differently the basic product or service remains the same. The quality of water remains the same, whether it is consumed by the poor or by the rich. However, the TSPs are proposing a few select services as the Internet for the poor. This creates a digital inequality instead of solving the problem of digital divide. The TSPs cannot be permitted to decide the content that any user can access. The only difference in the offering that can be permitted is difference on the basis of factors like download speed, data limit or access time without affecting the access to the open internet.

  6. Internet is not just about consumption: Internet is different from DTH television where channels are priced differently. Internet unlike DTH is not a one -way traffic medium and does not just constitute a medium where content is consumed by users. It offers endless possibilities of creating content, doing business, communicating and doing a lot more things limited only by the creativity of the user.

  7. Differential pricing and start-ups: Another contention raised is that differential pricing will not affect start-ups and will only encourage them. Some submissions have given the examples of Google and Facebook to show that start-ups can win their battles against established businesses. There cannot be a difference of opinion that start-ups with the right business ideas can overcome the Goliaths in the field. However, Google and Facebook were never denied access to customers by TSPs. But if the new start-ups are denied access to the islands of networks controlled by the TSPs, they cannot combat the established players, however strong their product may be. Of the 4P marketing mix, even if the Product, Price and Promotion are taken care of, the offering cannot succeed if the "Place", i.e. the channel to reach the customer is imperfect. With TSPs slicing up the Internet, it becomes impossible for the start-ups to reach their customers unless they enter into deals with each ISP to get entry to their islands of access.

  8. Differential pricing and forbearance: The TSPs have proposed a policy of forbearance as far as tariffs are concerned. However, the differential pricing models proposed by TSPs results in tinkering with the very nature of the Internet service, with the Internet being sliced into islands of networks. The regulator will have to interfere in such a scenario as it is not a case of pricing alone and involves broader issues of discrimination and competition.

  9. There are better models than differential pricing to provide wider Internet access: As a response to Question 3 in the consultation paper, it has been claimed by many TSPs, ISPs, and telecommunication associations that differential pricing is the most effective business model for providing free Internet access to the consumers. In our submission we have extensively elaborated the detrimental consequences of an ecosystem where differential pricing can be resorted to at the discretion of Internet Service Providers. It is duly considered that affordability is one of the prominent factors for increasing Internet penetration in the country, but the cost of this access should not determine the content that would be made available. Differential Pricing permits the TSPs to zero rate certain services and hence, distort the competition dynamics in the market. Further, it would lead to the service providers performing functions of more than a pipe where they would be capable of providing customized packages for a higher quality, but few services. This would create a regime of paid prioritization by the wealthy wherein start-ups would be discriminated against. Moreover, in this business model, a small bouquet of the world wide web, would be produced in front of the uninitiated, completely disregarding the user's right to choose. The alternatives proposed to counter differential pricing eliminate the problem of affordability, as most of them are 'free' or 'subsidized' methods to provide Internet to the public. If there is no particular content that would be priced differently, the consumer's right to choose would remain intact. Following are a few alternatives that achieve the same objective without giving the reigns to TSPs:

  • Free packs with a cap on volume of data: One of the alternatives suggested by many is that of free packs with a cap on the volume of data, but no restriction on the content that can be accessed, like a cap of 500MB per month. This would achieve TRAI's aim of providing free Internet access to a wider population, without the consequences of an ISP deciding the content.

  • Free packs provided at low speeds using 2G networks: This model provides the entire internet, with no restriction on volume or content, but operates on a 2G network. This model would be better for an ISPs bandwidth usage and easy on the infrastructural demands, along with satisfying the requirements laid down by TRAI and providing an unrestricted access.

  • Free Wi-Fi Hotspots and community centres: This method would enable people to access the Internet in public places by creating Wi-Fi hotspots from a single connection. This could be utilized in a community centre that could be a forum for digital literacy along with providing free Internet. This model would be effective in cutting down the cost and be a social force by bringing people together to learn about and access the Internet.

  • Data coupons that can be redeemed for data: Data coupons having an expiry date and valid for a specific volume of data could be sold, or given for free (depending on the extent of access a particular population has), which could be redeemed as per the need and usage of the person.

  • Direct Benefit Transfer for data packs: This is inspired from the Indian Government's DBT scheme on LPG subsidy wherein money would be transferred directly to the bank account. the Government could use this approach for internet data packs as well, by transferring an annual data cap in a SIM and breaking down the monthly limit for free usage.6 Unlike what is being claimed by some North American data miners- we believe that food security is also economically unsustainable or operationally challenging but does not prevent us from providing that.

  • Internet data subsidy from watching advertisements: In this alternative, the end user could be compensated in monetary terms that are transferred directly in his account for watching advertisements that generate revenue for the TSPs. This could act as an incentive to make Internet services affordable for the population.7

  • Advertisement supported data packs: This model supports the creation of revenue for the TSPs through advertisements, along with giving the users certain data credits for watching them while browsing the Internet. This model would be beneficial for both, the TSPs and the users where simultaneously they can earn revenue and extra data respectively.

  • Data bundling with new devices: TSPs can offer schemes where with every new connection, a certain volume of data is given for free, valid for a particular period of time.

  • Using USO funds to fund access to disadvantaged sections: The Government can fulfil its aim in the Digital India initiative by subsidizing access for certain sections of the society by using funds from the Universal Service Obligation Fund.

  • On Venue & In Transit Model: TSPs can collaborate with certain venues like libraries, schools, railway stations, airports to provide Wi-Fi connectivity to the public. This idea can also be utilized in public transportation systems and cabs.

  • As a part of Corporate Social Responsibility: Providing Internet access through a particular model could be made as a component of the mandatory CSR of companies.

    The practice of Differential Pricing defeats the purpose of an open internet by creating a walled garden of a few hand-picked services. These not only restrict the right of choice of a user, but hamper the innovation and growth of emerging and present start-ups and smaller services. The above alternatives are more effective than differential pricing because these methods keep in mind the interests of businesses, along with fulfilling the criteria of a free and open internet.

  1. Jurisdictional Analysis:Below are brief analyses of the net neutrality and zero rating regimes in a few external jurisdictions, namely the US, Canada and the EU, where zero rating, though not prohibited as such, is seen as a potential harm to the open Internet and therefore permitted only on case-by-case basis.

    1. United States of America: In the US, the earliest instance of policy recognition to the principle of net neutrality came in 2010, the FCC in February 2015 reclassified ISPs as common carriers under Title II of the Communications Act, thereby making Section 706 of the Telecommunications Act 1996 applicable to ISPs.8 Pursuant to this, the FCC also released a fresh Open Internet Rules and Order in March 2015, which introduced the following "Bright Line Rules" applicable to providers of both fixed and mobile broadband services:

      • No Blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices.

      • No Throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices.

      • No Paid Prioritization: broadband providers may not favour some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind - in other words, no "fast lanes." This rule also bans ISPs from prioritizing content and services of their affiliates.

      However, the Rules do not include an outright ban of the practice of zero rating. Instead, the FCC will investigate alleged abuses of zero rating on a case-by-case basis, under a "no unreasonable interference/disadvantage standard", where services that unreasonably interfere with or disadvantage the ability of users to access Internet content will be disallowed. While this is not nearly as good as a ban, it nevertheless reserves authority for the FCC to prohibit such abusive practices. The move also leaves the door open for users to petition the agency to stop these practices.

    2. Canada: The Canadian Radio-television and Telecommunications Commission (CRTC) issued a decision on 29 January 20159 directing Bell Mobility to eliminate its unlawful practice of exempting its mobile TV service from data charges. It also held the data exemption of a TV app of Videotron to be unlawful. It found that Bell Mobility and Videotron, in providing the data connectivity and transport required for consumers to access the mobile TV services at substantially lower costs to those consumers relative to other audiovisual content services, have conferred upon consumers of their services, as well as upon their services, an undue and unreasonable preference. Thus, the Canadian regulator has made its stand very clear on the aspect of differential pricing of data services.

    3. European Union: Regulation (EU) No. 2015/2120 is the first EU-wide regulation that addresses net neutrality and zero rating, albeit without explicit references to the terms as such. Adopted on November 25, 2015 and bearing a compliance date of April 30, 2016, the new Regulation aims to establish common rules to safeguard equal and non-discriminatory treatment of traffic in the provision of internet access services and related end-users’ rights. However, the Regulation has been criticized on counts of undermining its own net neutrality laws, as it is accused of containing several loopholes that "open the door to an end to net neutrality".10

      Regulation 2015/2120 provides that all agreements and commercial practices that deal with attributes of Internet access such as price, data volumes or speed are permitted so long as they do not limit certain end-user rights, namely the rights to access and distribute information and content, use and provide applications and services, and use terminal equipment of one's choice. Such agreements and practices would naturally include zero rating, which means the Regulation does not expressly prohibit zero rating.

      While the Regulation does not prohibit the practice of zero rating, the European Commission in a press release11 date 30th June, 2015 clarified that commercial agreements and practices, including zero rating, must necessarily comply with the other provisions of the Regulation, in particular with those on non-discriminatory traffic management. The fact sheet also acknowledged that zero-rating could in some circumstances have harmful effects on competition or access to the market by new innovative services and lead to situations where end-users' choice is materially reduced in practice. National authorities are entrusted with monitoring market developments, and will have both the powers and the obligation to assess such practices and agreements, and to intervene if necessary to stop and to sanction unfair or abusive commercial agreements and practices that may hinder the development of new technologies and of new and innovative services or applications.

      Finally, the fact sheet expressly provided that certain Member States' existing national rules do not need to change if these can be interpreted by regulators and courts consistently with the Regulation, including to protect end-users from commercial practices that are shown to circumvent the rules and materially reduce users' freedom of choice in the specific national circumstances.

      The national rules of Netherlands and Slovenia are of particular interest in this context, as these constitute two European jurisdictions that have explicitly prohibited zero-rated services in the past. Following widespread reports in 2011 that a handful Dutch ISPs had been engaging in discriminatory blocking of services such as VoIP and instant messaging, Article 7.4a was added to Netherlands' Telecommunications Act, whereby ISPs were prohibited from hindering or slowing down services or applications on the Internet. It also stipulated that ISPs may not impose differential charges on end-users for the use of different Internet content, applications and services, serving as an effective prohibition of zero rated services in the country. In December 2012, Article 203 was added to Slovenia's Electronic Communications Act, under which the Slovenian Parliament reiterated the nation's commitment to the open and neutral character of the Internet and forbade network operators and ISPs from restricting, delaying or slowing down Internet traffic at the level of individual services or applications and from implementing measures for their devaluation. Article 203 also says that the services of network operators and ISPs must not be based on the services or applications that are provided or are used over the Internet. In other words, ISPs are prevented from charging subscribers differently on the basis on the services provided over the Internet, constituting another national prohibition on zero-rated services.

      In the Recommendation CM/Rec(2016) of the Committee of Ministers to member States on protecting and promoting the right to freedom of expression and the right to private life with regard to network neutrality adopted on January 13, 2016 by the Council of Europe12, it is recommended that "3.1. Internet service providers should not discriminate against traffic from other providers of content, applications and services which compete with their own products. This requires that traffic management decisions be strictly dissociated from content-related decision-making processes of the operator in the spirit of the 2007 Committee of Ministers’ Declaration on protecting the role of the media in democracy in the context of media concentration".

Footnotes:

1 Facebook's comments on the Consultation Paper, p. 6, available at: http://trai.gov.in/Comments_Data/Organisation/Facebook.pdf, last accessed on January 14, 2016

2 Bharti Airtel's comments on the Consultation Paper, available at: http://trai.gov.in/Comments_Data/SP/Bharti_Airtel.pdf, last accessed on January 14, 2016

3 Canadian Radio-Television and Telecommunications Commission, Broadcasting and Telecom Decision CRTC 2015-26, 29th January 2015, available at: http://www.crtc.gc.ca/eng/archive/2015/2015-26.pdf, last accessed on January 14, 2016

4 Videocon's comments on the Consultation Paper, p. 1, available at: http://trai.gov.in/Comments_Data/SP/Videocon.pdf, last accessed on January 14, 2016

5 Idea Cellular's comments on the Consultation Paper, available at: http://trai.gov.in/Comments_Data/SP/Idea.pdf, last accessed on January 14, 2016

6 Nanan Nilekani & Viral Shah, Free basics is a walled garden: Here’s a much better scheme — Direct Benefit Transfer for internet data packs, 1st January 2016, available at: http://blogs.timesofindia.indiatimes.com/toi-editorials/free-basics-is-a-walled-garden-heres-a-much-better-scheme-direct-benefit-transfer-for-internet-data-packs/, last accessed on January 14, 2016

7 See https://medium.com/@inw/internet-access-alternatives-to-internet-org-for-the-digitally-excluded-don-t-let-access-providers-7aa481c03569#.7vbxo62e2, last accessed on January 14, 2016

8 Section 706 requires the Federal and State Communications Commissions to encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.

9 Supra. 3

10 Alex Hern, EU net neutrality laws fatally undermined by loopholes, critics say, The Guardian, 27th October 2015, available at: http://www.theguardian.com/technology/2015/oct/27/eu-net-neutrality-laws-fatally-undermined-by-loopholes-critics-say, last accessed on December 13, 2016

11 European Commission, Roaming charges and open internet: questions and answers, 30th June 2015, available at: http://europa.eu/rapid/press-release_MEMO-15-5275_en.htm, last accessed on December 13, 2016

12 Council of Europe: Committee of Ministers, Recommendation CM/Rec(2016)1 of the Committee of Ministers to Member States on the European Prison Rules, 13 January 2016, CM/Rec(2016)1, available at: https://wcd.coe.int/ViewDoc.jsp?Ref=CM/Rec%282016%291&Language=lanEnglish&Ver=original&BackColorInternet=C3C3C3&BackColorIntranet=EDB021&BackColorLogged=F5D383, last accessed on January 14, 2016.

All Posts | Dec 03,2015

How Have Internet Shutdowns Impacted Your Life? – The Huffington Post

With the advent of the internet, the global communications landscape has undergone a number of dramatic changes. Not only has the internet made communications technology more universal and affordable, it has also provided a whole new platform for self-expression bundled with elements of decentralisation and anonymity, making it one of the most powerful tools for political discourse in the 21st century. This also means that the internet has been increasingly targeted for control, and complete regional shutdowns of the public internet are frequently resorted to in parts of the world.

Between 2013 and 2015, access to the public internet has been blocked nine times across four Indian states. Annual instances of shutdowns climbed from one in 2013 to two in 2014 and six in 2015. Jammu & Kashmir saw the highest number of shutdowns with four instances over 2013, 2014 and 2015, followed by Gujarat with three internet clampdowns over 2014 and 2015. Nagaland and Manipur had internet shutdowns enforced once each in 2015.

While most shutdowns were instituted in the interest of maintaining law and order under the threat of widespread violence, the process followed remains shrouded in uncertainty. Despite there being a detailed procedure laid down by India's Information Technology Act to block public access to online content under specified circumstances, this is often discarded in favour of blanket shutdowns, which may be easier to implement in the short term, but come with collateral damage in terms of non-access to essential services that depend on the internet for their functioning. In 2011, the Organisation for Economic Co-operation and Development (OECD) estimated that a complete five-day internet shutdown in Egypt resulted in direct costs of at least USD 90 million. A 2015 study by the Germany-based Centre of Internet and Human Rights on "The Impact of Mobile Network Shutdowns in Pakistan" stresses how "Network shutdowns are a fundamental risk, not just to freedom of expression, national or personal security or business operations, but also to the most fundamental of sustainable development challenges faced by all state.

We invite readers to narrate their stories of how the shutdowns impact their day to day lives and business. A record of such shutdowns can be found at the website of the Software Freedom Law Centre.

This article first appeared on The Huffington Post (India Edition) on 2nd November 2015.

Photo byStahlkocher / CC BY-SA 3.0 EDIT: And updated version of the Infographic is available here. [19/02/2016]