Net Neutrality: Grey Areas in the Internet Economy

In the USA, on 14 December 2017, the Federal Communications Commission's (FCC) Republican majority approved Chairman Ajit Pai’s plan to gut the net neutrality protections. In India, the Telecom Regulatory Authority of India (TRAI) has ruled to prohibit internet service providers from charging discriminatory tariffs based on content. Such a decision by the TRAI ensures that Internet Service Providers will treat all data on the internet the same, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication.

How does net neutrality affect the internet user base in India? In what ways does neutrality affect the economics of the internet in terms of market structure, sustainability of good networks, impact of neutrality on consumer,and investment in network infrastructure?

This reading list compiles articles on net neutrality in India, taking into account both political and economic ramifications of a truly open internet.

A 2016 EPW editorial argues that even as TRAI, through its “Explanatory Memorandum,” has recognised that the internet has a substantial amount of user-generated content and is an “amalgamation of networks,” it has not explicitly recognised that the internet is a public good, indeed a global public entity, that belongs to no one and yet to everyone.

Shobhna Kunwar, in 2015, wrote about how the economics of neutrality is ambivalent as opposed to the notions in politics. If seen from an economic perspective, the benefits and deleterious effects of neutrality principle need to be seen in different contexts. This is because the effects can be ambiguous. The article deals with three aspects highlighting those grey areas and are an antidote to the clear notions of politics. These are dealt under three headings: (i) market structure issues; (ii) sustainability question in net neutrality; and (iii) effects of neutrality on consumers and investment in network expansion.

In this 2015 article, Vinod Kumar argued that a lot of the debate over neutrality today is really a debate against monopolistic practices. Monopolies are not desirable and any policies that help strengthen monopolistic practices should invite protest. However, differential pricing is not one of the policies that facilitate the creation of monopolies.

In 2014, Rohit Prasad and V Sridhar summarised regulatory views on net neutrality in the advanced countries such as the United States and the European Union contrasting them with possibilities in emerging countries such as India.

In 2015, Rohit Prasad and V Sridhar wrote, 

Since the controversial term “net neutrality” was coined by Tim Wu of Columbia Law School in 2003, much of the debates on net neutrality have revolved around the potential actions of network owners (that is, telecom/internet service providers—TISPs) exercising additional control over the data traffic in their networks. Presently the obvious villains in the show are the TISPs as they provide the last mile bandwidth to carry content and applications provided by the popularly known “over the top” (OTT) players to the end users. Net neutrality is a specific approach to the economic regulation of the internet. It is based on the premise of the “end to end design principle” in which traffic on the internet should be determined by decisions at the edges of the network. The two sides that are on the edges of the network include the OTTs and the end users. The TISPs that provide connectivity should play the role of a “dumb pipe.” 

They argue that the internet can no longer be thought of as a simple two-sided market with the TISPs as the bottleneck monopoly between the OTTs and the end user and that net neutrality in the present context is a dogma whose time has passed. They suggest a new credo—digital dynamism—that needs to take its place.