Telecom licences amended to enforce net neutrality

By Asim Abbas, Cyril Amarchand Mangaldas

In August, the Department of Telecommunications (DOT) notified amendments to the unified licence (UL), unified access service licence and licences for cellular mobile telephone service, virtual network operators and internet service providers in order to ensure neutrality of all content being transferred over the internet. The amendments were made after extensive consultation with various stakeholders, which led to the release by the Telecom Regulatory Authority of India (TRAI) of Recommendations on Net Neutrality in November 2017. These recommendations endorse the basic principle of net neutrality – “non-discriminatory treatment of content” over the internet.

Asim AbbasPartnerCyril Amarchand Mangaldas
Asim Abbas
Cyril Amarchand Mangaldas

The access service licence in the UL regime already had a provision for distribution of certain services on a “non-discriminatory” basis. Despite the existence of this provision, companies entered into agreements that provided preferential treatment of content. Therefore, the recent amendments go a step further and comprehensively define the contours of net neutrality law in India.

The amendments insert two clauses in the licence agreements. The first clause defines “internet access service” as a service which is designated to transmit data to, and receive data from, all or substantially all end-points on the internet. This service should generally be available to the public and includes services that offer capabilities incidental to, or which are functionally equivalent to, internet access services. The second clause deals with the principle of non-discriminatory access and its exceptions. It prohibits a licensee from engaging in any discriminatory treatment of content. It also prohibits licensees from entering into any arrangement which could lead to discriminatory treatment of content.

The ambit of the second clause is governed by the definitions of the terms “discriminatory treatment” and “content”. Discriminatory treatment has been defined to include any form of “discrimination, restriction or interference in the treatment of content, including practices like blocking, degrading, slowing down or granting preferential speeds or treatment to any content”. Content has been defined to include “all content, applications, services and any other data, including end-point information, which can be accessed or transmitted over the internet”.

Specialized services have been exempted from the ambit of the amendments. These are services other than internet access services that are optimized for specific content, protocols or user equipment. For instance, the treatment of content in services like IPTV (internet protocol television) can be discriminatory but such discrimination may be required to meet specific quality of service requirements. However, these services should not be offered as a replacement for internet access services, nor should they be detrimental to the availability and overall quality of internet access services.

Measures that are proportionate, transient and transparent have also been exempted. Such measures are divided into five categories: (1) reasonable traffic management practices; (2) provisions during grave public emergency; (3) implementation of court orders or directions issued by the government; (4) measures taken to preserve the integrity and security of the network and equipment; and (5) measures taken in view of an international treaty as specified by the government.

Despite broadly enforcing the basic principles of net neutrality, a number of open-ended exceptions need to be streamlined. The DOT is seeking recommendations from TRAI in order to formulate regulations on traffic management practices. Similarly, the DOT has left it for TRAI to frame additional regulations on transparency and disclosures. TRAI is expected to release consultation papers on both these issues in the coming months.

Further, while not explicit in the amendments, the DOT has stated that the internet of things (IoT) would not be completely excluded from the ambit of the restrictions. However, certain critical IoT services that satisfy the definition of specialized services would be excluded. This classification would be done by the DOT after consultations with stakeholders and other departments.

The streamlining of these exceptions would determine the strength of the net neutrality law in India. Moving forward, the DOT and TRAI are expected to issue additional regulations defining the exceptions. This may lead to further amendments to the various telecom licences. Streamlining of the exceptions would establish industry practices which will be vital for the growth of the telecom industry. Advancements in the nascent IoT industry would also be contingent on these developments in the telecom industry.

Cyril Amarchand Mangaldas is India’s largest full-service law firm. Asim Abbas, a partner at the firm, was assisted by Shashank Singh, an associate.

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