Since November 2022, the Cellular Operators Association of India (COAI), which represents Bharti Airtel, Vodafone Idea, and Reliance Jio, the three major telecom operators in India, has been demanding that platforms such as YouTube and WhatsApp pay a share of revenue to make up for the network costs. This has reignited the debate around net neutrality.
In an immediate response to the demand, the Broadband India Forum (BIF), which represents Internet firms such as Meta and Google, wrote a letter to the Department of Telecommunications (DoT) rebutting the COAI’s demands.
“This concept of paying for the use of infrastructure is an excellent concept wherein any entity that uses another entity’s infrastructure should pay for it,” Debashish Bhattacharya, senior deputy director of BIF, wrote. “However, the revenues earned by the infra provider [telecom operators] should also be shared with the entity using it in the same proportion.”
Mr. Bhattacharya also hit out at the apparent claim by the telecom operators that content providers don’t build any of this infrastructure on their own. “The infrastructure for any communication network also includes data centres, undersea cables, content hosting centres, content delivery networks (CDNs), etc — all of which are built by the OTT platforms,” he said.
In 2016, Internet activists celebrated as the Telecom Regulatory Authority of India (TRAI) ruled in favour of Net neutrality, the concept that all traffic on an Internet network has to be treated equally.
The telecom regulator capped a highly publicised debate on the subject, and concluded that programmes such as Free Basics by Facebook (now Meta) and telecom operators’ plans to charge extra for data calls using apps like Viber would be prohibited, as all Internet access had to be priced equally.
The Department of Telecommunications in 2018 embedded the net neutrality concept into the Unified Licence, whose conditions all telecom operators and Internet providers are bound by.
The case for a fee
The COAI’s argument is that its current demand has nothing to do with Net neutrality. “There seems to be [a] lack of appreciation of the fact that Net neutrality pertains to non-discriminatory treatment of content which has no nexus to the usage fee issue,” the COAI argued in a press note on February 27.
“We reiterate that all our member TSPs [telecommunication service providers] are committed to follow the Net neutrality principles as per their licensing conditions,” Lt. Gen. Dr. S.P. Kochhar (retd), Director-General of COAI, said.
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However, last Monday, Amrita Choudhury, director, CCAOI, a cyber advocacy-focused public policy entity, wrote, “Charging a network fee will break the core essence of an open Internet.”
Telecom operators and platforms support “each other’s growth, and neither can exist without the other”.
Ms. Choudhury argued that instead of this the government could reduce spectrum fees and support telecom companies with the Universal Service Obligation Fund (USOF).
Net neutrality activists (as well as content providers) have argued that imposing such a fee, even on a limited number of large players, was a distortion of the Internet’s architecture, where content providers and telecom operators enjoy a symbiotic relationship without charging each other, and users pay both, in the form of fees or advertisements, or both.
The debate takes us back a decade, when the usage fee demand was made in India by Airtel’s CEO Sunil Bharti Mittal, who termed the proposal an “Internet tax” in 2013, complaining that content providers were “consuming a massive amount of resources on our network”, and that “somebody’s got to pay for that”.
In essence, telecom operators have gone from demanding payment to manage scarce resources on their networks, to demanding payment for enormous usage on their networks.
Worldwide operations
Telecom operators in the European Union are also demanding similar usage fees from content providers. The Electronic Frontier Foundation (EFF), a prominent Internet rights advocacy group in the U.S., warned against such moves.
“Fundamentally network usage fees are a ploy by the largest ISPs to extract monopolistic rents, kill competition, and further entrench their monopolistic power,” the EFF said in a blog post in December. “…The costs ISPs incur for delivering traffic have not been drastically rising despite increases in traffic.”
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The EU is holding consultations on the issue this year before it finalises its stand. Minister for Electronics and Information Technology Ashwini Vaishnaw indicated that the Union Government would wait and see what the international moves in this space are before making a call on the telcos’ demands. “Telecom is an industry where everything is benchmarked to the world,” Mr. Vaishnaw said in February. “Whatever we do will be in sync with the global trends.”
In 2014, in the U.S., where the Net neutrality movement largely took root, the debate was not about the prices consumers paid. It came, rather, in the aftermath of telecom operators trying to get companies such as Netflix to pay them in view of the enormous amounts of traffic that flowed on their networks from them.
The U.S. had, and continues to have, programmes like T-Mobile Binge On, where traffic from certain content providers is ‘zero-rated’, which means it would not be counted in users’ data limits.
In the years since, the Indian telecom industry has far outpaced the U.S. in terms of data consumed per month on mobile Internet connections, a result of the sharp drop in tariffs after Reliance Jio launched 4G services. Now, Indian telecom operators are emulating the approach that American carriers had aggressively pursued a decade ago.
