Centre for Internet and Society

The Huawei pointer

Shyam Ponappa — 2018-05-06T13:04:40Z

Taking a cue from Huawei. Huawei has an awe-inspiring record of drive, perseverance, fortuitous circumstances, good strategy, execution, and success.

The article was published in the Business Standard on May 3, 2018 and in Organizing India Blogspot also on May 3, 2018

A Chinese communications company founded in 1987 in Shenzhen by a former army engineer, Ren Zhengfei, Huawei is now a legend. By 2012, it overtook industry leader Ericsson in global revenues. In 2017, its revenues were over $90 billion, two-thirds from outside China. It also has a significant and growing presence in India. How did they do it?

Part of Huawei’s mystique stems from its outstanding founder and its driven work culture. This may be unique and difficult to replicate, but it is a byword for hard-charging Chinese high-tech. A meme that epitomises the culture is “9-9-6” — that is, for 9:00 am to 9:00 pm, 6 days a week. Can factors driving its success to be adopted at the policy level and in enterprises in a democracy?

My previous column addressed the hollowing out of our manufacturing and other abilities. My suggestion is to replace obstructive policies with others that facilitate building infrastructure and local capacity, especially in growth areas. The example of Huawei provides a pointer. Perhaps some of what we learn can be applied at the governmental and the corporate levels.

Reports suggest these key factors in its success:

Strong leadership with a sense of purpose: A customer-first attitude. There’s an anecdote of the founder being willing to meet any customer, but ignoring a potential investor by delegating to a colleague a meeting with a Morgan Stanley team, led by Chief Economist Stephen Roach.
Broad employee ownership: In 2014, 84,000 employees out of 150,000 owned stock along with the founder, who owned only 1.4 per cent.2 They share an understanding that while an IPO would enrich some, the majority would lose their motivation. The essential requirements are hard work and dedication.
Government support: Huawei grew revenues by building market share in China to become a national champion, then got support from the China Development Bank. Initially for $10 billion, it is now $30 billion.3 Building networks in Africa and Latin America, and low prices helped win deals in Europe. Mr Ren himself has said that without policy support, Huawei would not exist.
Its unique culture and organisation: From inception, the founder was passionate about management, and about adapting methods and organisation. For instance, Huawei devised a top management model of a rotating CEO among three top executives, each of whom leads for six months, modelled on a flight of geese that change their order in arrowhead formation.4 Mr Ren is the mentor and coach. In March 2018 there was a change to a rotating Chairman position.

(The founder’s daughter, Meng Wanzhou (aka Sabrina Meng) is the Chief Financial Officer, and holds one of four vice-chair positions. His son Ren Ping works for a subsidiary providing reservations and trade show support.)

Another instance is Huawei’s Integrated Financial Services transformation program, which Ms Meng led since 2007. It was an eight-year partnership program between Huawei and IBM to develop data systems and resource allocation rules, operations, process optimisation, and internal controls.

Huawei reportedly invests 10 per cent of annual revenues on Research & Development.
Huawei also emphasises “the power of thinking”. Executives are urged to read beyond their domains, and books are everywhere.

These factors enable Huawei to solve problems for clients in diverse situations. Examples:

In its early days, networks were at risk from rats gnawing through circuitry in desert and rural areas in China. Multinational vendors did not consider this their problem and left it to their customers. Huawei, by contrast, treated it as their own problem, and developed sturdier equipment and materials such as chew-proof wires. This experience later helped gain large accounts in the Middle East where customers faced similar problems.
Other extreme environmental conditions have been addressed, such as base stations installed at high altitudes (at 6,500 metres on Mt Everest), or in the Arctic. These experiences helped a dedicated and committed workforce gain more clients. For instance, when expanding their 3G market in Europe, Huawei found that clients expected “base stations to be more compact, easier to install, greener, and more energy efficient, while offering wider coverage”. To cater to these needs, Huawei developed distributed base stations that could handle both large and small private networks, making them cheaper to deploy, which became popular with European carriers.
The employee-ownership arrangement and associated dedication enable planning for the long term, as with the Chinese government. Huawei plans for 10 years, whereas competitors have to contend with quarterly financial considerations.

Carriers buying Huawei network equipment get significant discounts in smartphones. Focusing on new technology not controlled by the giants of 3G such as Qualcomm, Ericsson, and Nokia, enabled Huawei to develop 4G, which is much faster and ideally suited for updating-apps, to the point that it competes with Samsung and Apple. Undercutting competitors has enabled it to sell to carriers, and its depth of products and technology has enabled it to meet customer needs, displacing competitors.

Huawei’s R&D Centre in Bangalore established in 1999 is its largest outside China, and it has offshore Global Network Operating Centres in Gurgaon and Bangalore, besides Romania and Nigeria. These GNOCs run networks not only in India but across the globe for a number of operators, offering managed network services integrating a range of equipment at low cost. With its market strength, depth of products, and access to funds, Huawei is likely to control network services in India and much of the world from now on through the 5G evolution cycle.

The only way for competition other than in-house NOCs in India is if the Government of India develops end-to-end supportive policies, transcends election cycles, and sponsors a consortium comprising a major transnational anchor, a system integrator, and local design and production wherever technological opportunities arise.

References

1. David De Cremer and Tian Tao: https://hbr.org/2015/06/huaweis-culture-is-the-key-to-its-success

2. Rebecca Blumenstein: https://www.wsj.com/articles/the-secret-of-huaweis-success-1414963782

3. Scott Sendrowski: http://fortune.com/huawei-china-smartphone/?iid=sr-link1

4. Belasco, James A. Stayer, Ralph C. (1993). Flight of the Buffalo. New York, NY: Warner Books.

For more details visit https://cis-india.org/telecom/blog/business-standard-shyam-ponappa-may-3-2018-huawei-pointer

NPAs & Bad Banks

Shyam Ponappa — 2018-03-25T03:53:25Z

Correcting misinformed impressions about NPAs, and the Swedish model for setting up a Bad Bank.

The article was originally published in the Business Standard on February 28, 2018 and re-posted in Organizing India Blogspot on March 1, 2018.

Two features about non-performing assets (NPAs) deserve exploration. First, prevailing impressions about banks and NPAs, such as:

Large borrowers are primarily responsible for non-performing loans;
Small borrowers rarely default;
Privatisation will prevent NPAs and frauds; and
A bad bank for problem loans will help or it won’t.

Second, solutions for NPAs have been limited to providing some government funding, with hopes of muddling through.First, take the contention that large borrowers account for most bad loans. Of total NPAs of Rs 10,149.16 billion, the published Big 12 comprise 25 per cent (Rs 2,537.29 billion).1 Another 100 wilful defaulters of over Rs 2.5 million against whom suits were filed constitute 7.3 per cent (Rs 740.2 billion).2 While these constitute a third of NPAs, smaller accounts make up the other two-thirds.Among housing loans, NPAs are highest among small loans not exceeding Rs 200,000 (10.4 per cent, or Rs 1,361.26 billion of Rs 13,089 billion), more than double the rate for larger loans over the last five years.3 The lowest NPAs are in the over-Rs 2.5-million category at 0.9 per cent, decreasing with loan size.Housing loans contribute 13.4 per cent to total NPAs, i.e.:

About half the top 12 defaulters (25 per cent), and
Double the 100 wilful defaulters (7.3 per cent).

Therefore, the need is for a systemic fix across all levels, not only big defaults.Second, the context for NPAs is the economy. As last year’s Economic Survey (2016-17) pointed out:- A number of NPAs resulted from overleveraging after a high-growth period. Corporates used debt to invest heavily in long-gestation projects in infrastructure, such as power, mines and metals, and spectrum and coal auctions, encouraged by the government. From 2004-05 to 2007-08, the investment-gross domestic product (GDP) ratio rose from 27 per cent to 38 per cent, while bank credit doubled. Then, costs rose along with difficulties in acquiring land and environmental clearances, and oil prices. Import prices rose 2.4 times between 2010 and 2014. The rupee dropped sharply against the dollar, increasing foreign borrowing costs. Domestic borrowing costs also increased with interest rates (Chart 1) as growth fell.

Chart 1: Real Interest Rate: Lending Rate Minus GDP Deflator

https://tradingeconomics.com/india/real-interest-rate-percent-wb-data.html

- By 2013, nearly a third of Indian companies had interest cover less than 1 (EC1), i.e., annual earnings before interest and tax (Ebit) less than interest. By 2015, nearly 40 per cent were at this level. From 2012 through mid-2015, EC1 companies’ earnings were around Rs 250 billion per quarter. By end-2015, earnings had dropped to Rs 20,000 per quarter, and by September 2016, to Rs 15,000 per quarter. Cash flow was insufficient to service debt from 2014. The result was a sharp increase in NPAs (Chart 2), which could increase to 11.1 per cent by September 2018.

Chart 2: NPAs

https://tradingeconomics.com/india/bank-nonperfoming-loans-to-total-gross-loans-percent-wb-data.html
What’s difficult to understand is why and how systemic controls against inappropriate evergreening and fraud, such as integrating SWIFT, or Society for Worldwide Interbank Financial Telecommunication, with in-house systems, and avoiding underreporting of NPAs, have not been enforced until now. Systems have to be properly designed and implemented.However, while we dither over a bank for bad loans, NPAs need resolution. The most salutary model of banking reform, privatisation and recovery is from Sweden.

Sweden’s transformation after its banking crisis of 1991-1992 is remarkable. Their prior experience parallels ours in some ways, although our attributes are very different, i.e., small versus large, advanced/developing, highly skilled small population/underskilled large population, and so on. For years, Sweden was an underperforming economy with low real wage growth, high inflation and public debt. Then a period of rapid growth and credit expansion led to a real estate bubble and collapse, like ours.

Housing prices fell by 25 per cent and commercial real estate by 42 per cent between 1990 and 1995. NPAs went from 5 per cent to nearly 50 per cent among banks (all private), and bankruptcies soared. In this crisis, the entire political leadership decided to unite to resolve their problems. Then, despite fighting behind the scenes, they worked together to take quick action.4 The Swedish centre-right government and the Social Democratic opposition decided on (a) state ownership of troubled banks (b) while guaranteeing all depositors and creditors except bank shareholders.

This united approach restored confidence. A ‘bad bank’ was set up and NPAs evaluated and assigned to ‘good’ or ‘bad’ banks by an independent body disposing of bad assets. Sweden’s banking system recovered to support a sound economy with growth.In our case, undertakings untainted by greed or moral turpitude with cash flow problems deserve efforts at rehabilitation. Examples are where there’s a likelihood of improving cash flows, as in some of the power projects that have run aground for reasons such as lower demand, or exceptional input cost increases. An objective evaluation process by an expert group to triage the NPAs is needed, categorising the untainted and impaired, and where there is scope for revival. Also, rehabilitation measures need to be formulated. The rub is that India is ill-equipped by culture and customary practices to do this. Yet, we would benefit greatly if we could draw on Sweden’s experience in taking corrective action. Private asset reconstruction companies have not been effective. It is unlikely that partial measures will fare better.The primary requirement is political unity across all parties.

Without this, none of the rest can follow. Then, setting up an independent professional entity unencumbered with political considerations to do what is needed. This becomes evident in comparing the US crisis of 2008 (all private banks) with the Swedish experience. After Lehman Brothers collapsed, the Democrats agreed to the Treasury Secretary’s ad hoc $700-billion bailout package, then denounced it just before a vote. The Republicans rejected their own plan, leading to turmoil in the markets. The bill finally passed a week later, and although successful in cleaning impaired assets at a much lower than expected cost, led to a slow recovery and was hugely unpopular. Similarly, the Japanese approach has been slow and not a clear success. Can India’s political parties replicate Sweden’s example? Will they?

Shyam (no space) Ponappa at gmail dot com

1: http://www.business-standard.com/article/finance/steel-firms-dominate-list-of-rbi-s-12-defaulters-117061601393_1.html

2: https://suit.cibil.com/

3:https://rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=17314

4:http://www.slate.com/articles/news_and_politics/the_pivot/2012/10/sweden_when_its_banks_failed_the_scandinavian_country_made_a_miraculous.html

and

https://www.reuters.com/article/us-sweden-banks-analysis/swedish-banks-safe-bet-or-risky-business-idUSKBN1500ZX

For more details visit https://cis-india.org/telecom/blog/business-standard-march-1-2018-shyam-ponappa-npas-and-bad-banks

Matching Realities and Aspirations

Shyam Ponappa — 2018-03-09T03:03:58Z

Leaving aside fixing the 'mountains' such as land acquisition, NPAs etc, here are some thoughts on systemic focus and action.

The article was published in the Business Standard on January 31, 2018 and in Organizing India Blogspot on February 1, 2018.

There’s an upbeat sense from the annual Economic Survey, and indicators such as soaring stocks and official statements.Yet, the ground realities don’t match because of gritty facts such as not being able to pay electronic tolls on a national highway near Delhi though the Bharatiya Janata Party (BJP) controls local administration1, Korean steel giant Posco abandoning a huge investment last year after struggling for over a decade, two public sector divestments, Bharat Aluminium Company and Hindustan Zinc, mired in difficulties2, or the hobbling state of services such as electricity and telecommunications despite short-term consumer benefits from lower prices, and so on. Another aspect is that so many college graduates, including engineers, law students and MBAs, compete for low-end government jobs such as peons in state governments. Clearly, something beyond talkfests and episodic discussions is needed. Leaving aside fixing the “mountains” — the land acquisition act, non-performing assets (NPAs), high component taxes — here are some thoughts on systemic focus and action.

Fix infrastructure

With rare exceptions, our governments do not appear to recognise a clear priority to fix infrastructural deficiencies. After national security and maintaining law and order, correcting critical deficiencies of infrastructure in all its forms needs to be an all-out priority. This is a basic requirement for citizens to function effectively and live well. Without infrastructure one cannot function anywhere near full capacity, because of having to spend time, energy and resources dealing with problems of living and hygiene arising from the non-availability of adequate water and sanitation, inefficient travel and logistics for employment, education or health care, communications, dysfunctional equipment because of power shortages, and so on.Instead, some misconceptions in policies and practices appear to be broadly accepted as driving factors not only in the government, but also to some extent in the public perception. One is that all foreign direct investment (FDI) is a panacea for our ills and aspirations. The second is the idea that for services such as water, electricity and communications, the public interest is best served by the lowest consumer prices for those who get such services, regardless of sustainability. Issues such as access to services for half the population living outside urban areas, high and consistent quality, sustainability, and minimising environmental impact appear to be less important criteria.

The Panacea of FDI?

There’s no question about the need for foreign investment, but uncontrolled FDI, particularly at our stage of development, is inadvisable. One wonders where these forms of the erstwhile East India Company and/or winner-take-all might lead. And does it matter, as long as consumers enjoy good living, defined as access to material comforts at low prices? To see why it does matter, consider these parodied scenarios, with apologies to Jonathan Swift’s satirical A Modest Proposal3.

A Modest Proposal for 100% FDI — A Parody

Imagine how well all consumers could do, this time without leaving the other half out, if we invite the likes of (indicative list, in alphabetic order) Amazon, Facebook, Google, and Microsoft (with guarantees of compensation if there are sudden policy reversals, which we are prone to) to use all unsold and unused spectrum to provide connectivity and digital services pronto. They could put in so much investment to get to year five on day one a couple of years or so out, even Reliance Jio might pale.Don’t want Americans? Why not invite the Chinese and Huawei? We might get even better deals in digital services from the world leader in 4G and beyond.Not to mention the attendant benefits from associated companies to keep consumers happy with smartphones, air conditioners, refrigerators, air purifiers, TV sets, cars, two-wheelers, and so on. There will also be power plants, aircraft, and trains, fixing all three sectors with one swipe. Some impediments would have to be removed of course, such as allowing power plants to come up, electricity lines to be laid out, spectrum to be used, land acquired, changes in labour laws, and so on. As for employment, there could be plenty of local assembly, manufacturing and distribution from all of the above, provided we willingly submit to some regimentation in our lives.

Alternative: Fix The Basics & Do It Ourselves
We have to fix the basics to help ourselves and make FDI succeed in our interests. We need priorities in objectives, as everything cannot have the highest priority. Even more difficult is getting experts and practitioners to work out detailed process plans, evaluating alternatives with realistic simulations, and so on. It takes time, energy, understanding and competence, and patience, to get beyond seat-of-pants discussions. Apply all these from a systems perspective, map the distilled ideas to action plans for each set of interrelated processes, and the upshot could be those process plans. We may get end-to-end strategies leading to convergent results to improve our infrastructure, which will enable agricultural and manufacturing production, services, and trade, with resulting jobs, while limiting negative environmental impact.Goals such as increasing jobs and farm income are desirable. To get on a higher long-term growth trajectory beyond a cyclical recovery, in addition to skilling, there need to be initiatives and investments that fit with the circumstances. An excellent example is the Automotive Mission Plan 2006-2016, now in its second 10-year cycle, which resulted in India becoming a preferred automobile assembly location with 32 million jobs in FY16. Similar approaches could be worked out for connectivity, electricity, and the rest, that address the needs/opportunities/markets, the products/services, how delivery will be organised, what the resources are and where they will be sourced from, how they will be organised and when, i.e., the detailed strategy, process plans and flow charts.Also, effective corporate practices such as facilitation for catalysing group decisions could be used if they are not already, to help administrators, experts, and practitioners arrive at sound, practical decisions.4 Another area is simulation and modelling of alternatives and scenarios. A third is overall strategy.

These steps will help improve our ability to achieve our aspirations.

Shyam (no space) Ponappa at gmail dot com1. ‘India’s road to digital highway’, Nivedita Mookerji, Business Standard: http://www.business-standard.com/article/opinion/india-s-road-to-digital-highway-118012401544_1.html
2. ‘India as a ‘business partner’, Kanika Datta, Business Standard: http://www.business-standard.com/article/opinion/india-as-a-business-partner-118012401599_1.html
3. https://en.wikipedia.org/wiki/A_Modest_Proposal;https://andromeda.rutgers.edu/~jlynch/Texts/modest.html4.https://www.centreforfacilitation.co.uk/files/public/What%20is%20process%20facilitation.pdf

For more details visit https://cis-india.org/telecom/blog/business-standard-shyam-ponappa-february-1-2018-matching-realities-and-aspirations

January 2018 Newsletter

praskrishna — 2018-03-01T01:35:56Z

January 2018 Newsletter

Dear readers,

Previous issues of the newsletters can be accessed here.

Highlights
The paper titled "Patent Working Requirements and Complex Products" has been published in the latest issue of the NYU Journal of Intellectual Property and Entertainment Law. It is one of the outputs of the Pervasive Technology project and has been authored by Prof. Jorge L. Contreras, Paxton M. Lewis, and Rohini Lakshané. CIS made a submission to the Department of Industrial Planning and Promotion on mobile patents. CIS offered its assistance on matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards sustained innovation, manufacture and availability of mobile technologies in India The use of Artificial Intelligence (AI) in healthcare in India is increasing with new startups and large ICT companies offering AI solutions for healthcare challenges in the country. The report by by Yesha Paul, Elonnai Hickok, Amber Sinha and Udbhav Tiwari seeks to map the present state of AI in the healthcare sector in India. About 27% of India's population is still illiterate or barely literate. Most privacy policies and terms of services for web and mobile applications are in English and therefore it is only 10% of us who can actually read them before we provide our consent. The article by Sunil Abraham was published in Deccan Herald on January 20, 2018. CIS made a submission to TRAI Consultation on inputs to the National Telecom Policy. CIS in its submission also recommended what all should be the main objectives of TRAI while drafting the next edition of National Telecom Policy. Under a research grant from the Azim Premji University CIS has initiated a study of the ongoing updation process of the National Register of Citizens (NRC) in Assam and the resultant reform of citizen identification infrastructure in India. The 2G judgment of December 2017 provides a critique of how no proper evidence was presented on existence of an FCFS policy and its improper implementation, wrote Shyam Ponappa in his article in the Business Standard which was published on January 3, 2018.

Highlights

The paper titled "Patent Working Requirements and Complex Products" has been published in the latest issue of the NYU Journal of Intellectual Property and Entertainment Law. It is one of the outputs of the Pervasive Technology project and has been authored by Prof. Jorge L. Contreras, Paxton M. Lewis, and Rohini Lakshané.
CIS made a submission to the Department of Industrial Planning and Promotion on mobile patents. CIS offered its assistance on matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards sustained innovation, manufacture and availability of mobile technologies in India
The use of Artificial Intelligence (AI) in healthcare in India is increasing with new startups and large ICT companies offering AI solutions for healthcare challenges in the country. The report by by Yesha Paul, Elonnai Hickok, Amber Sinha and Udbhav Tiwari seeks to map the present state of AI in the healthcare sector in India.
About 27% of India's population is still illiterate or barely literate. Most privacy policies and terms of services for web and mobile applications are in English and therefore it is only 10% of us who can actually read them before we provide our consent. The article by Sunil Abraham was published in Deccan Herald on January 20, 2018.
CIS made a submission to TRAI Consultation on inputs to the National Telecom Policy. CIS in its submission also recommended what all should be the main objectives of TRAI while drafting the next edition of National Telecom Policy.
Under a research grant from the Azim Premji University CIS has initiated a study of the ongoing updation process of the National Register of Citizens (NRC) in Assam and the resultant reform of citizen identification infrastructure in India.
The 2G judgment of December 2017 provides a critique of how no proper evidence was presented on existence of an FCFS policy and its improper implementation, wrote Shyam Ponappa in his article in the Business Standard which was published on January 3, 2018.

The following articles were written by CIS members:

Digital native: Memory card is full (Nishant Shah; Indian Express; January 3, 2018).
The 2G Judgment of December 2017: What Was It About? (Shyam Ponappa; Business Standard; January 3, 2018).
Fixing Aadhaar: Security developers' task is to trim chances of data breach (Sunil Abraham; Business Standard; January 10, 2018).
Another Step towards Privacy Law (Elonnai Hickok; Governance Now; January 15, 2018).

Data Protection: We can innovate, leapfrog (Sunil Abraham; Deccan Herald; January 20, 2018).

CIS in the News:

From net neutrality to IBC & Aadhaar, how Vidhi is framing key government legislation (Surabhi Agarwal and Samanwaya Rautray; Economic Times; January 4, 2018).
UIDAI denies any breach of Aadhaar database (Komal Gupta; Livemint; January 7, 2018).
Token security or tokenized security? (Manasa Venkataraman and Ajay Patri; Livemint; January 9, 2018).
UIDAI introduces new two-layer security system to improve Aadhaar privacy (Economic Times; January 11, 2018).
Hammered government offers Virtual ID firewall to protect your Aadhaar (New Indian Express; January 11, 2018).
Virtual Aadhaar ID: too little, too late? (Yuthika Bhargava; Hindu; January 11, 2018).
India To Introduce Virtual ID For Aadhaar To Strengthen Privacy (Bloomberg Quint; January 11, 2018).
UIDAI's Virtual ID, limited KYC does little to protect Aadhaar data already collected, say critics (Business Today; January 12, 2018).
Aadhaar Body Talked About Virtual ID 7 Years Ago, Put It Off: UIDAI Chief (Sukriti Dwivedi; NDTV; January 13, 2018).
Bengaluru gives data safety tips to panel (Deccan Herald; January 14, 2018).
Is your personal information under lock and key? (Sravanthi Challapalli; Hindu Businessline; January 16, 2018).
Aadhaar-privacy debate: How the 12-digit number went from personal identifier to all pervasive transaction tool (First Post; January 18, 2018).
Paytm Payments Bank woos corporates with digital incentives (Komal Gupta and Remya Nair; Livemint; January 24, 2018).
Aadhaar's new security measures are good, it is still work in progress (Alnoor Peermohamed; Business Standard; January 25, 2018).

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Access to Knowledge
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Our Access to Knowledge programme currently consists of two projects. The Pervasive Technologies project, conducted under a grant from the International Development Research Centre (IDRC), aims to conduct research on the complex interplay between low-cost pervasive technologies and intellectual property, in order to encourage the proliferation and development of such technologies as a social good. The Wikipedia project, which is under a grant from the Wikimedia Foundation, is for the growth of Indic language communities and projects by designing community collaborations and partnerships that recruit and cultivate new editors and explore innovative approaches to building projects.

►Wikipedia

Blog Entries

Government of Odisha adopting Creative Commons License to Promote Transparency and Access to Knowledge (Sailesh Patnaik; January 17, 2018).
Experience and Learning outcome from Wikipedia Education Program (Lakshmi Karlekar; January 30, 2018).

Events Organized

Marathi Wikipedia Workshop at Dept. of Mass Communication, Solapur University (Organized by CIS-A2K and Dept of Mass Communication, Solapur University; Solapur; January 2, 2018).
Marathi Wikipedia Workshop at Dayanand College, Solapur (Organized by CIS-A2K and Dayanand College, Solapur; Solapur; January 3, 2018).
Marathi Wikipedia Workshop at Willingdon College, Sangli (Organized by CIS-A2K and Willingdon College; Sangli; January 5, 2018).
Marathi Wikipedia Workshop at Govt.Science & Arts College, Aurangabad (Organized by CIS-A2K and Govt.Science & Arts College; Aurangabad; January 9, 2018).
Marathi Wikipedia Workshop at Dr.Babasaheb Ambedkar Marathwada Vidyapeeth (Organized by CIS-A2K and Dr. Babasaheb Ambedkar Marathwada University; Aurangabad; January 10, 2018).
Marathi Wikipedia Workshop at Shivaji University, Kolhapur (Organized by CIS-A2K and Shivaji University; Kolhapur; January 15, 2018).
Wikidata Workshop (Organized by CIS-A2K and Andhra Loyola College; Vijaywada; January 20 - 21, 2018).
Train the Trainer 2018 (Organized by CIS-A2K; Mysore; January 26 - 28, 2018).

►Pervasive Technologies

Research Paper

Patent Working Requirements and Complex Products (Jorge L. Contreras, Rohini Lakshané and Paxton M. Lewis; JIPEL NYU Journal of Intellectual Property & Entertainment Law, Vol. 7 - No.1 on January 16, 2018).

Submission

Submission to DIPP at Meeting with IP Stakeholders (Anubha Sinha; January 1, 2018). The submission was made in December 2017 but it was published on the website in January 2018.

►Openness

Our work in the Openness programme focuses on open data, especially open government data, open access, open education resources, open knowledge in Indic languages, open media, and open technologies and standards - hardware and software. We approach openness as a cross-cutting principle for knowledge production and distribution, and not as a thing-in-itself.

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Internet Governance
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As part of its research on privacy and free speech, CIS is engaged with two different projects. The first one (under a grant from Privacy International and IDRC) is on surveillance and freedom of expression (SAFEGUARDS). The second one (under a grant from MacArthur Foundation) is on restrictions that the Indian government has placed on freedom of expression online.

►Privacy

Blog Entry

Artificial Intelligence and the Healthcare Industry in India (Yesha Paul, Elonnai Hickok, Amber Sinha and Udbhav Tiwari (Ecosystem mapping by Shweta Mohandas, Sidharth Ray and Elonnai Hickok. Designed by Saumyaa Naidu under Creative Commons Attribution 4.0 International License; January 26, 2018).

Events Organized

Roundtable on A.I. and Manufacturing and Services (TERI, Bengaluru; January 19, 2018).

null Bangalore Meet: Special Session on Digital Identity and Privacy (CIS, Bengaluru; January 19, 2018). Sunil Abraham gave a talk.

►Free Speech and Expression

Blog Entries

Internet Governance Forum Report 2017 (Shweta Mohandas; January 11, 2018).

Mobile net ban during peaceful protest leaves farmers confused (Shruti Jain; January 19, 2018).

‘Hurt sentiments’ cost Udaipur internet access for four days (Shruti Jain; January 19, 2018).

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Telecom
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CIS is involved in promoting access and accessibility to telecommunications services and resources, and has provided inputs to ongoing policy discussions and consultation papers published by TRAI. It has prepared reports on unlicensed spectrum and accessibility of mobile phones for persons with disabilities and also works with the USOF to include funding projects for persons with disabilities in its mandate:

Article

Submission to TRAI Consultation on "Inputs for Formulation of National Telecom Policy - 2018" (Pranesh Prakash; January 25, 2018).

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Researchers at Work
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The Researchers at Work (RAW) programme is an interdisciplinary research initiative driven by an emerging need to understand the reconfigurations of social practices and structures through the Internet and digital media technologies, and vice versa. It aims to produce local and contextual accounts of interactions, negotiations, and resolutions between the Internet, and socio-material and geo-political processes:

Blog Entry

Life of a Tuple: National Register of Citizens (NRC) and the Reform of Citizen Identification Infrastructure in Assam (Sumandro Chattapadhyay; January 22, 2018). All posts related to the study can be found here.

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About CIS
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The Centre for Internet and Society (CIS) is a non-profit organisation that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. The areas of focus include digital accessibility for persons with disabilities, access to knowledge, intellectual property rights, openness (including open data, free and open source software, open standards, open access, open educational resources, and open video), internet governance, telecommunication reform, digital privacy, and cyber-security. The academic research at CIS seeks to understand the reconfigurations of social and cultural processes and structures as mediated through the internet and digital media technologies.

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Twitter - Information Policy: https://twitter.com/CIS_InfoPolicy
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E-Mail - Access to Knowledge: a2k@cis-india.org
E-Mail - Researchers at Work: raw@cis-india.org
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For more details visit https://cis-india.org/about/newsletters/Qjanuary-2018-newsletter

Submission to TRAI Consultation on "Inputs for Formulation of National Telecom Policy - 2018"

pranesh — 2018-01-25T14:46:48Z

Centre for Internet and Society (CIS) made a submission to TRAI Consultation on inputs to the National Telecom Policy.

Preliminary

We welcome the TRAI consultation on the National Telecom Policy 2018.

We believe these should be among the objectives of the next NTP.

To enable inclusion through the provision of telecommunications infrastructure and services that are accessible to all, especially for the most marginalized.
To maximize the utility of telecom networks by increasing their capacity and throughput.
To maximize the socio-economic utility of of spectrum and rationalize the regulatory regime.
To re-energize the telecom sector, and to bring about a shift to a revenue-sharing model of revenue-generation for the exchequer.

NTP-12 does not include any policy mandate for providing accessibility for person with disabilities. The Policy should mandate implementation of systems that would enable better accessibility for persons with disabilities. This could have included formulation of a Code of good practice for manufactures and service providers, conduct surveys and gather statistics on use of telecommunication services by persons with disabilities, etc.

Resource and infrastructure sharing

Resource- and infrastructure-sharing among telecommunications companies and applications is crucial to ensure both eiciency of usage of a limited resource (whether it is cabling in underground ducts, or spectrum, or telecom towers), as well as to lower telecommunications costs (especially capital expenditure cost) and lowering barriers to entry, reducing environmental costs, and to maximize the beneits for consumers.[1]

Eforts must be taken to enable greater sharing of resources and infrastructure, without there being a negative impact on competition.[2]

As a telecom scholar points out, “[O]perators will sometimes share the cost of digging or deploying passive infrastructure, but will lay their own iber lines, which allows them to engage in full, facility-based competition. In these cases, there is no risk of coordination, as networks based on multiple iber lines ensure that access seekers can obtain full control over them. Under such conditions, co-investment agreements are more likely to lead to timelier and more intense competition on the downstream market.”[3]

For this, the separation between infrastructure and service must be maintained, with focus of competition at the service end with infrastructure being largely common. This is managed differently in different countries.[4]

Keeping all this in mind, we suggest that Strategies E(b) and F(c) be reworded to say, "By promoting both passive and active sharing of telecom infrastructure and resources among telecom service providers, while ensuring that doesn’t lead to a decrease in competition, and where appropriate making certain forms of infrastructure sharing mandatory."

Among the resources that require sharing is spectrum. In 2015, DoT guidelines allowed liberalised spectrum to be shared among operators.

Modernizing spectrum management

We are happy to note that the strategy of “ensuring adequate availability of contiguous, broader and globally harmonised spectrum” is listed under Strategy D(u). There are many opportunities for harmonisation of spectrum usage in India vis-a-vis global usage. For instance, currently in India, only 50 MHz of spectrum has been earmarked for unlicenced use outdoors in the 5 GHz band (5.825 GHz to 5.875 GHz). There is no rationale for this distinction between indoor and outdoor use, and this limits the usage of Wi-Fi outdoors. The US has delicensed 580 MHz in the 5GHz band which allows for the IEEE 802.11ac standard to be used on it, whereas India has only delicensed 300 MHz, whereas 1280 MHz is what is dictated by needs.[5] At a minimum 580 MHz (3x160 MHz) ought to be made available for unlicensed used.

Additionally, delicensing the 60 GHz band would bring us in line with global regimes,[6] where at least 19 countries have delicensed the 60 Ghz band for both access as well as backhaul purposes.[7]

The 60GHz band is ideal for delicensing since it there is virtually no interference since due to oxygen absorption and narrow antenna beam width the transmission distances

are short. We also need to liberalize the 70 and 80 GHz bands to enabling lower cost access for these frequencies to extend ibre connectivity where necessary by using other means, including through aerial systems.

While under Strategy D(v), TRAI proposes the “earmarking [of] unlicensed frequency bands periodically for operation of low power devices for public use”, it should instead be “earmarking unused, underused, and unlicensed frequency bands periodically for public use, with licence-exemption and light-licensing where possible, with safeguards to prevent interference”.

Even bands that have been allocated under the NFAP and licensed may lie unused or underused as well. According to a study by IIT-Hyderabad, unused TV spectrum in India amounts to between 85%-95% of the total TV spectrum. A large swath of 115 MHz — from 470 to 585 MHz — lies unused, and is available for alternative uses. Waiting for an ecosystem to develop around the 470- 698 MHz band,[8] is harming the government’s vision of Digital India and an urgent course correction is needed. As we have argued in the past, “[w]hereas Digital India needs low-cost wireless broadband, especially for long-distance links in rural India, because of the high cost and diiculty of building and maintaining ibre or wired networks in diicult terrain, and/or in sparsely populated areas. Therefore, access to TVWS needs to be bundled with BharatNet, and other shared backbone networks like ERNET.

Policies should permit diferent network design scenarios including transmission power and purpose. Point-to-point links are needed over long distances in place of ibre or microwave, and broad coverage is needed for contiguous areas like industrial developments, campuses, commercial complexes, or rural communities … TVWS does need tight radio ilters (unlike Wi-Fi) to minimise interference, the underlying consideration that drives spectrum management. There's also need for varying power speciications depending on the network design and purpose as described above, and policies for unlicensed sharing using geolocation databases, as deined by the US FCC."[9]

Further, following the lead of the FCC in the USA, and Ofcom in the UK, we in India should exempt low-power usage across all spectrum bands. The approach followed by Ofcom (which allows for powers between -90 dBm/MHz to -41 dBm/MHz (and on a sloping gradient from 10.6 GHz onwards), may be recommended. To reflect this, a strategy statement to “explore greater exemptions from licensing requirements where possible, including for low-power spectrum usage”, would be helpful.

The NTP should also lead the way in encouraging the government and the regulator to look to new ways of managing licence-exempt use of spectrum, as has been done, for example, in the UK.[10]

This allows for a movement away from power-oriented regulations to regulation on the basis of interference. For instance, shared spectrum databases may allow for coordinated usage of higher power but without interference. Further, this allows for bands to be categorized not by usage, but by transmit powers and duty cycles.

Accessibility

One of the lacunae in the NTP-12 is its lack of any policy mandate for providing accessibility for person with disabilities.[11] NTP-18 should not make the same mistake. The NTP should mandate implementation of systems that would enable better accessibility for persons with disabilities. This should include formulation of a code of good practice for manufactures and service providers, conducting surveys and gathering statistics on use of telecommunication services by persons with disabilities, etc.

Revenue maximization

We believe that Strategy D(r) (“reviewing the objectives of spectrum management to maximise socio-economic gains”) should explicitly mention that revenue maximization should not itself be a goal, since that may harm the socio-economic gains to be had from optimal usage of spectrum. We believe that it should be made explict that “ensuring revenue maximization for the exchequer will not be the main aim of spectrum management policy”.

Auctions, which ind mention in TRAI’s recommendations, ne — to favour a model of revenue sharing[12] — and at the least they need to be structured in such a manner as to avoid the “winner’s curse”.[13] Revenue-sharing, which was followed after NTP-99, allows for a more sustainable form of revenue generation for the government, while having transparent allocation systems or auctions designed in a manner not oriented towards maximizing the generation of auction proceeds for the government.[14] Just as increasing the USO fund by itself cannot be a goal — ensuring universal service is the goal — similarly, the generation of tax revenue by itself cannot be a goal.

Patents pools, local manufacturing, and cost of devices

Under “Strategies to become net positive in international trade of telecommunication systems and services”, the consultation paper proposes inancial incentives for development of SEPs, as well as “incentivising local manufacturing of network equipment and devices” as strategies. One concrete strategy to incentivise local manufacturing of telecommunications equipment and devices is to create government-controlled patent pools,[15] which can be used to ensure that patent-holders are paid a royalty on SEPs while also lowering the transaction costs and legal uncertainty for local device manufacturers, and ultimately lowering the price of devices for customers.[16]

Private patent pools do not suiciently take care of the legal risks created to manufacturers. If government intervention is not done, then Indian manufacturers will end up embroiled in legal battles as we have seen with Micromax, and others. CIS has provided a very detailed submission on TRAI’s Consultation Paper on Promoting Local Telecom Equipment Manufacturing.[17]

Internet connection and data centres

While under “Strategies to establish India as a global hub for data communication systems and services”, the problem of Internet interconnection is brought up, but the strategies don’t mention what needs to be done. One of the problems facing India currently is a low level of peering interconnection agreements and a high cost of transit interconnection agreements. This results in a higher cost of Internet for everyone. This needn’t be so. The NTP could establish that there should be no licensing required for running an interconnection point. Currently, there is a lack of clarity on the matter, with contrary suggestions having been provided by Trai in the past. Further, the NTP and that existing interconnection exchanges like NIXI should not discriminate between licensed telecom operators and unlicensed content providers, since it is crucial that the latter also be present at interconnection exchanges, and interconnection exchanges will not lourish unless the hurdles put in place, which favour incumbents, are reduced.

It is worrying that TRAI has suggested establishing a “licensing and regulatory framework for cloud service providers” (Strategy H(a)). While cloud service providers are subject to the regulations provided in the IT Act, and other legislations in India, they currently are not subject to any licensing requirements. No rationale has been provided by TRAI for this suggestion, and it would kill innovation in the sector, and would inhibit the emergence of India as a global hub for data communications systems and services. Similarly, while an overarching data protection and security legislation needs to be in place, the suggestion of a “licensing and regulatory framework for IoT/ M2M service providers” (Strategy G(a)) is worrying, and there is no suitable rationale for having licensing in this space, which will only serve to curb innovation without any corresponding or suitable benefit accruing to the public.

Given that telecommunications isn’t an end in itself, but is a means to an end, one of the missions of the NTP could be:

To enable inclusion through the provision of telecommunications infrastructure and services that is accessible for all, especially for the most marginalized, including those who are disabled, those who live in remote areas, those who are illiterate, scheduled castes and scheduled tribes, women, and transgender communities.

Once again, we are grateful to TRAI for having provided this opportunity to comment.

[]. GSMA, “Mobile Infrastructure Sharing,” 2008, https://www.gsma.com/publicpolicy/wpcontent/uploads/2012/09/Mobile-Infrastructure-sharing.pdf.

[]. José Carlos Laguna de Paz, “How Cooperation Between Telecom Firms Can Improve Efficiency,” The Regulatory Review, June 25, 2015, https://www.theregreview.org/2015/06/25/laguna-telecoms-cooperation/.

[]. Ibid.

[]. Jan Markendahl, Amirhossein Ghanbari, and Bengt G. Mölleryd, “Network Cooperation between Mobile Operators : Why and How Competitors Cooperate?,” in DIVA, 2013, http://urn.kb.se/resolve? urn=urn:nbn:se:kth:diva-134358.

[]. Parag Kar, “Response to TRAI’s Consultation Paper on Proliferation of Broadband through Public Wi-Fi Networks” (Qualcomm, August 10, 2016), http://www.trai.gov.in/sites/default/files/201609011022542916621Qualcomm_india_pvt_ltd.pdf.

[]. See ITU-R Report “ITU-R M.2227 (11/2011)” and ITU-R Recommendation “ITU-R M.2003-1 (01/2015)” on “Multiple Gigabit Wireless Systems in frequencies around 60 GHz”.

[]. Broadband India Forum, “V Band - 60 GHz: The Key to Affordable Broadband in India” (Broadband India Forum, 2016), http://www.broadbandindiaforum.com/img/White%20Paper%20on%20V-BAND%20Revised%20Final.pdf.

[]. Varun Aggarwal, “DoT Says No to Releasing TV White Space Spectrum, Clarifies It Is for Experiments,” The Hindu Business Line, June 16, 2016, http://www.thehindubusinessline.com/info-tech/dot-says-no-to-releasing-tvwhite-space-spectrum-clarifies-it-is-for-experiments/article8737575.ece

[]. Shyam Ponappa, “The Buzz around TV White Space,” Business Standard, November 4, 2015, http://www.businessstandard.com/article/opinion/shyam-ponappa-the-buzz-around-tv-white-space-115110401618_1.html.

[]. “Better Managing Licence-Exempt Usage,” Ofcom, October 7, 2016, https://www.ofcom.org.uk/research-anddata/technology/radio-spectrum/exempt.

[]. Snehashish Ghosh, “National Telecom Policy 2012 — Issues and Concerns,” The Centre for Internet and Society, June 30, 2012, https://cis-india.org/telecom/national-telecom-policy-2012.

[]. David E. M. Sappington and Dennis L. Weisman, “Revenue Sharing in Incentive Regulation Plans,” Information Economics and Policy 8, no. 3 (September 1, 1996): 229–48, https://doi.org/10.1016/0167-6245(96)00010-8.

[]. Shyam Ponappa, “Richard Thaler’s Views on Auctions,” Business Standard, November 1, 2017, http://www.business-standard.com/article/opinion/richard-thaler-s-views-on-auctions-117110101558_1.html.

[]. Shyam Ponappa, “Breakthroughs Needed for Digital India,” Business Standard, April 6, 2016, http://www.businessstandard.com/article/opinion/shyam-ponappa-breakthroughs-needed-for-digital-india-116040601241_1.html.

[]. Sunil Abraham, “Letter for Establishment of Patent Pool for Low-Cost Access Devices through Compulsory Licenses,” The Centre for Internet and Society, accessed January 19, 2018, https://cis-india.org/a2k/blogs/letter-forestablishment-of-patent-pool-for-low-cost-access-devices

[]. Nehaa Chaudhari, “Pervasive Technologies: Patent Pools,” The Centre for Internet and Society, accessed January 19, 2018, https://cis-india.org/a2k/blogs/patent-pools

[]. Anubha Sinha, “Comments on TRAI’s Consultation Paper on Promoting Local Telecom Equipment Manufacturing” (Centre for Internet and Society, November 13, 2017), http://www.trai.gov.in/sites/default/files/CentreInternetSocietyIndia_CP_PLTEM.pdf.

For more details visit https://cis-india.org/telecom/blog/submission-to-trai-consultation-on-inputs-for-formulation-of-national-telecom-policy-2018

The 2G Judgment of December 2017: What Was It About?

Shyam Ponappa — 2018-01-18T14:40:50Z

The judgment provides a critique of how no proper evidence was presented on existence of an FCFS policy and its improper implementation.

Originally published in Business Standard on January 3, 2018 and also published in Organizing India Blogspot on January 4, 2018.

The recent 2G judgment raises perplexing questions about the case, with pointers in the judgment to issues of concern that we need to address going forward. This preliminary analysis highlights questions that arise from select issues covered in the judgment of over a thousand pages: Can government policy itself be prosecuted as alleged wrongdoing, as the charge sheet apparently tried to do? The judgment states that the FIR alleged in item 1 that the licence fee in 2008 was Rs 16.58 billion as in 2001, and licences were issued on a first come, first served (FCFS) basis without competitive bidding.¹

These are factual statements in accord with prevailing policies, and licences could be applied for at the fee set in 2001. The charges question the appropriateness of the policies as there was no competitive bidding or auction.² Arguments for changing the policy to adopt auctions, or to increase fees, appear unconnected with proving wrongdoing.
Regarding the FCFS policy, the charges are twofold. One is whether or not there was in fact an established FCFS policy. Another is alleged malfeasance in policy implementation.

Was there an FCFS policy?

The judgment finds that the FCFS policy has been misrepresented in the claim that only one application was processed at a time.3 This is analysed and contradicted in detail. The judgment gives several contrary examples provided by the defence, such as later applicants being processed earlier when there was a problem with compliance by the earlier applicant, of successive applicants given letters of intent (LOIs) on the same day, and applicants with LOIs seeking repeated extensions before letting them lapse. The judgment states that no evidence was presented of a systematic FCFS process for the issue of LOIs and spectrum allocation/assignment in the case of 51 prior licences issued. The finding is that because there was a single applicant at a time earlier, a sequential process was followed, but that this was not a conscious policy. Also, that the evidence from the Wireless Planning and Coordination Wing (WPC) is that priority for spectrum allocation was from the date of application for spectrum, and not from the application for the unified access services (UAS) licence (LOI). The judgment concludes that there was no evidence to prove that there was an FCFS policy in the form as alleged in the charge sheet. The sense one has from the instances cited is that there was a loose policy with no standard operating procedure.

Possible malfeasance & evidence

Another allegation in the charge sheet is that the FCFS policy, such as it was, was implemented in a manner that resulted in wrongful gains. From press reports at the time, one expects that this statement of possible malfeasance is the sort for which evidence might be available and presented. So, was such evidence presented?

The FCFS process changed from the date of application for a licence in the order in which it was received to actual compliance with terms of LOI. This meant submitting all requisite information, documentation and clearances together with bank drafts and guarantees. Earlier, the FCFS criterion was the completed application (as in the instance of a later complete application being processed before an earlier incomplete application). The judgment records that consideration of the proposed change to LOI compliance was publicly known well beforehand and was even published in the press.

The counter is that because of a large number of applicants, the criterion was established for serious applicants who complied with the conditions of LOIs, including all clearances and payments. All applicants were apparently well informed of impending developments at the Department of Telecommunications (DoT). The judgment notes: “Everything was leaking in DoT. There was no secrecy or sanctity… In such a situation, no blame can be cast on any of the accused alone.” However, one is left with a sense that this area has not been conclusively explored.

Some questions remain
A broad question: Is there a way to deliver justice while avoiding the infructuous path of dealing with the several hundred thousand pages of documents over seven years and the opportunity cost so far for all involved in just this case? If so, how do we change course going forward? The charges appear to have conflated the questioning of policy with allegations of improper implementation and culpability. Might separating the questioning of policy from establishing wrongful implementation and culpability be more constructive? Could defining narrower culpable allegations, focused on evidentiary material, obtain conclusions beyond reasonable doubt?

The judgment provides a scathing critique of how no proper evidence was presented on the existence of an FCFS policy. What is the explanation for a weak case by the prosecution?
The charges sought to prove that there was a conspiracy of all the 17 accused, and that the first indication of it was the letter from the DoT to the solicitor general regarding LOIs for pending applications. Could the charges have targeted other events and activities based on likely availability of evidence, and if so, what might they have found? Examples: Bringing forward the deadline for applications from October 1, 2007 to September 25, 2007, or the lack of orderly standard operating procedures adopted in changing the priority of applicants from the date/time of application to LOI compliance.
Regarding wrongful gains, there is no indication if forensic methods were used in tracking transactions and if so, what the methods and findings were.
What explains the rough-and-tumble process that applicants had to go through in complying with LOIs related to the case?

For the New Telecom Policy in 2018, we must hope to learn from and avoid such adverse situations. One way is to facilitate collaborative and transparent implementation.

Delhi District Court judgment: Cbi vs . (1) A. Raja (A1); on 21 December, 2017.pdf https://indiankanoon.org/doc/17920655/
The Trai (Telecom Regulatory Authority of India) recommended auctions in August 2007 for all spectrum except “2G bands”, but not for licensing. Acceptance by the DoT would have made this the policy, but this recommendation was not accepted.
(Ibid) Page 524, Paragraph 753

For more details visit https://cis-india.org/telecom/blog/business-standard-shyam-ponappa-january-3-2018-2g-judgment-of-december-2017

December 2017 Newsletter

praskrishna — 2018-03-17T11:12:26Z

Dear readers,

Previous issues of the newsletters can be accessed here.

Highlights
Shruthi Anand wrote a report that seeks to map the development of Artificial Intelligence both generally and in specific sectors culminating in a stakeholder analysis and contributions to policy making. CIS made a submission to the Department of Industrial Planning and Promotion on December 7, 2017. CIS also offered its assistance on other matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards sustained innovation, manufacture and availability of mobile technologies in India. The Office of the Controller General of Patents, Designs and Trademarks held a meeting with IP stakeholders on December 7, 2017, chaired by the Secretary, DIPP, to take suggestions on improving procedures and functioning of the Office. Anubha Sinha attended the meeting and requested the DIPP to improve compliance of uploading Form 27s by patentees and ensure proper enforcement of related provisions within the Indian Patent Act, 1970. A Kannada Wikipedia orientation workshop was held at the Entrepreneurship Centre, SID, Indian Institute of Science, Bengaluru on 26 November, 2017. The day long event was aimed at adding content to Kannada Wikimedia projects on topics such as ecology, environment, wildlife and sciences of Karnataka. Shyam Ponappa wrote an article on the tragedy of commons in the Business Standard on December 6, 2017. Just like porn is not real life, all news is not real news. It’s time, therefore, to come of age in the 18th year of this century, wrote Nishant Shah in an article in the Indian Express on December 31, 2017.

Highlights

Shruthi Anand wrote a report that seeks to map the development of Artificial Intelligence both generally and in specific sectors culminating in a stakeholder analysis and contributions to policy making.
CIS made a submission to the Department of Industrial Planning and Promotion on December 7, 2017. CIS also offered its assistance on other matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards sustained innovation, manufacture and availability of mobile technologies in India.
The Office of the Controller General of Patents, Designs and Trademarks held a meeting with IP stakeholders on December 7, 2017, chaired by the Secretary, DIPP, to take suggestions on improving procedures and functioning of the Office. Anubha Sinha attended the meeting and requested the DIPP to improve compliance of uploading Form 27s by patentees and ensure proper enforcement of related provisions within the Indian Patent Act, 1970.
A Kannada Wikipedia orientation workshop was held at the Entrepreneurship Centre, SID, Indian Institute of Science, Bengaluru on 26 November, 2017. The day long event was aimed at adding content to Kannada Wikimedia projects on topics such as ecology, environment, wildlife and sciences of Karnataka.
Shyam Ponappa wrote an article on the tragedy of commons in the Business Standard on December 6, 2017.
Just like porn is not real life, all news is not real news. It’s time, therefore, to come of age in the 18th year of this century, wrote Nishant Shah in an article in the Indian Express on December 31, 2017.

CIS wrote the following articles:

New Recommendations to Regulate Online Hate Speech Could Pose More Problems Than Solutions (Amber Sinha; Wire; October 14, 2017). This was published in the month of December on the CIS website.
Breeding misinformation in virtual space (Amber Sinha; Asian Age; December 3, 2017).
India’s Data Protection Regime Must Be Built Through an Inclusive and Truly Co-Regulatory Approach (Amber Sinha; Wire; December 1, 2017).
Digital native: Memory card is full (Nishant Shah; Indian Express; December 3, 2017).
Should Aadhaar be mandatory? (Amber Sinha; Deccan Herald; December 9, 2017).
Digital native: The age of consent (Nishant Shah; Indian Express; December 31, 2017).

CIS in the News:

Aadhaar linking deadline approaches: Here are all the myths and facts (Business Today; December 7, 2017).
Checks and balances needed for mass surveillance of citizens, say experts (Hindu; December 9, 2017).
Masking personal data to protect privacy crucial for India, say experts (Deepti Govind; Livemint; December 11, 2017).
Paranoid about state surveillance? Here’s the FD Guide to living in the age of snoops (Sriram Sharma; Factor Daily; December 12, 2017).
Deadline For Linking Bank Accounts With Aadhaar To Be Extended To 31 March (Komal Gupta and Ramya Nair; Livemint; December 14, 2017).

►Copyright & Patent

Submission

Submission to DIPP at Meeting with IP Stakeholders (Anubha Sinha; December 12, 2017).
CIS' Submission to DIPP and CGPDTM at meeting with IP Stakeholders (Anubha Sinha; December 13, 2017).

►Openness

►Wikipedia

Blog Entries

Christ University Wikipedia Education Program Internship (Manasa Rao; December 11, 2017).
Wikipedia Orientation Program at Rotary Club of Salem (Manasa Rao; December 11, 2017).
Nichole Saad from the Wikimedia Foundation visits Christ University (Manasa Rao; December 17, 2017).
Kannada Wikipedia Orientation Workshop at IISc, Bengaluru (A. Gopalakrishna; December 19, 2017).
Wikimedia Technical Workshop at Savitribai Phule Pune University (Manasa Rao; December 19, 2017).
Marathi Wikipedia workshop for Sandarbh Science magazine writers (Manasa Rao; December 19, 2017).
Marathi Wikipedia - Vishwakosh Workshop for Science writers in IUCAA, Pune (Manasa Rao; December 20, 2017).

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Internet Governance
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►Free Speech & Expression

Blog Entries

It Hurts Them Too (Mir Farhat; December 19, 2017).
Internet Shutdowns: A Modern-day Siege (Ayswarya Murthy; December 19, 2017).
Days to Derail Work of Two Generations? (Mahesh Kumar Shiva; December 19, 2017).
Sorry, Business Closed until Internet is Back On (Nalanda Tambe; December 19, 2017).
Stock Brokers Don't Love an Internet Shutdown (Binita Parikh; December 19, 2017).
Was there an Unofficial Internet Shutdown in BHU & NTPC? (Saurabh Sharma; December 19, 2017).
How Media beat the Shutdown in Darjeeling (Manish Adhikary; December 19, 2017).
Internet and the Police: Tool to Some, Trash to Others (Manoj Kumar; December 19, 2017).
Business Woes from Saharanpur's Internet Ban (Mahesh Kumar Shiva; December 19, 2017).
Amid Unrest in the Valley, Students See a Dark Wall (Aakash Hassan; December 19, 2017).
The Rising Stars in Music Loath Losing their Only Platform (Umar Shah and Mir Farhat; December 19, 2017).
Internet and Banking: A Trust Broken (Roshan Gupta; December 19, 2017).
Online or Offline, Protest Goes On (Junaid Nabi Bazaz; December 19, 2017).
Digital Banking Dreams: Interrupted (Safeena Wani; December 19, 2017).
Will Darjeeling Regain the Trust of Tourists? (Roshan Gupta; December 20, 2017).
Silence on the Dera Front (Sat Singh; December 20, 2017).
ISPs in Kashmir Grappling with Mounting Losses Amid Recurrent Shutdowns (Safina Wani; December 20, 2017).
Taxes in the Time of Internet Shutdown (Avijit Sarkar; December 20, 2017).
Every Town had its Jio Dara (Ayswarya Murthy; December 20, 2017).
Education and Employment Opportunities Tossed out of the Window (Roshan Gupta; December 20, 2017).
Darjeeling’s e-commerce Crumbles after 100 days sans Internet (Avijit Sarkar; December 20, 2017).
E-administration Efforts are Lame Ducks without Internet (Amit Kumar and Sat Singh; December 20, 2017).

►Privacy

Blog Entries

Artificial Intelligence - Literature Review (Shruthi Anand; edited by Amber Sinha and Udbhav Tiwari with research assistance by Sidharth Ray; December 16, 2017).
AI and Healthcare in India: Looking Forward (Shweta Mohandas; edited by Roshni Ranganathan; December 16, 2017).

Participation in Event

FIGI Symposium 2017 (Organized by Telecommunication Standardization Bureau (TSB) of the International Telecommunication Union (ITU), jointly with the Bill & Melinda Gates Foundation, the World Bank and the Committee on Payments and Market Infrastructure (CPMI) and support of the Government of India; November 29 - December 1, 2017; Bangalore). Elonnai Hickok participated in the symposium and spoke in the "Security, Infrastructure, and Trust" working group on big data and privacy in DFS.

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Article

The tragedy of the unused commons (Shyam Ponappa; Business Standard; December 6, 2017).

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About CIS
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For more details visit https://cis-india.org/about/newsletters/december-2017-newsletter

The tragedy of the unused commons

Shyam Ponappa — 2018-01-05T14:50:56Z

Hope for the good sense and guts to handle it.

The article was published by Business Standard on December 6, 2017 and in the Organizing India Blogspot on the same day.

“The tragedy of the commons” as you may recall, refers in economics to the overexploitation of shared resources because of unregulated access. The tragedy results from shared resources being depleted or degraded because users pursue their own interests, contrary to the common good. This leads to unsustainable depletion or degradation. The atmosphere and oceans are examples of such shared resources.

There are also reverse situations, in which resources that are available for the benefit of society are unused, to the detriment of the common good. In such cases, there are opportunity costs from disuse that result in detriments, because the benefits of use are foregone. India’s abundant sunlight is a good example. Given its abundance, a reasonable expectation might be that extensive innovation and market organisation would be focused on harvesting this potential energy. Alas, India is a laggard in innovation relating to solar power.

Another resource that is neither depleted nor degraded by usage but underused is radio frequency spectrum. The opportunity cost for unused spectrum is therefore even greater than for a degradable mineral resource such as coal, resulting in an extreme tragedy of unused commons.

Some Issues Need Resolution

The situation today is that swathes of spectrum are unused because of our inability, perhaps unwillingness, to develop the appropriate regulations and organisation to benefit from them. This is true of all unused and underused radio frequency spectrum, although some of it is the most useful means for broadband connectivity for the majority of our rural and semi-urban population. It would also give more urban users less expensive access. For both sets, judicious use would enhance productivity and improve living conditions.
The entire thrust of the Digital India initiative requires these enabling policies and procedures, that is, the administrative rules and regulations that would enable the use of presently unused and therefore wasted spectrum. There are, of course, many other steps required than merely putting in place the regulations. The market structures and organisation have to be created under government leadership with other stakeholders in industry and civil society that would permit sustainable use of “the commons” — namely, the spectrum, if it were a shared resource instead of being apportioned in silos.

At present, private operators in this sector, except one, have too much debt, very low profitability, and insufficient network coverage. Services can be good in some locations, but countrywide, are spotty and not universally accessible. Yet, operators apparently want auctions, not now but at some time in the future (perhaps next year), for the essential resource that is the prerequisite for building the coverage that they don’t have although sorely needed, as it has been for years. While clearly impractical because of how auctions soak up capital, limiting subsequent investment in networks because of the deprivation of capital, operators reportedly want this in order to reduce competitive threats.

Another baffling aspect of our reality is that the administration and regulator took no effective action to prevent the destruction of existing market structures in the telecom sector when there was a disruptive new entrant. With overwhelming resources from unrelated activities, unsustainable strategies and tactics could be construed as jeopardising India’s current and future productivity. Meanwhile, the administration and the regulator dithered, debating theoretical concepts of what constitutes anticompetitive or predatory activity, and the judiciary remained on the sidelines.

Yet another aspect of puzzling inactivity is that there have been no steps to test certain promising technologies for permitting their use through appropriate policies in India, such as TV White Space or the development of MIMO — Multiple-Input-Multiple-Output — using arrays of antennas, yielding (a) greater throughput (b) over longer distances (c) to more users, thereby improving spectrum capacity for broadband. While initial tests for TV White Space, conducted after a delay of several years, have been promising (disclosure: the author was associated with some), proposals for larger follow-up trials have stalled. Without these, policymakers can’t even consider policies that would enable the development and use of TV White Space devices for extending optical fibre from gram panchayats to hundreds of thousands of village users.

In the press, confusing articles short on facts make policy formulation even more difficult and risky in this already technically and financially complex space. One instance is an article about Maharashtra’s Village Social Transformation initiative avoiding TV White Space because this technology has problems with security clearance, in addition to Foreign Contribution Regulation Act clearance for Microsoft’s sponsorship of the pilot. The fact that the problem in India is in getting permission to use TV White Space for purposes other than for Doordarshan’s broadcasts finds no mention. The security risk in these frequencies is the same as in other frequencies, and transmission in any band can be monitored.

Another article suggests the government is considering allocating a high-speed wireless frequency band of unused spectrum (V band or 60 GHz, which is like short-range wireless optic fibre) on a first come, first served basis “which is a gross violation of the Supreme Court order”. Somewhere down the page is a surmise that since the Broadband India Forum is advocating de-licencing of this band and foreign companies support it, this “means that it should be allocated without auction on first come, first served basis”. The Broadband India Forum in its white paper clearly recommends aligning with an international standard, the Harmonised European Standard.1
According to this, low power equipment within specified emission limits in this band doesn’t need a licence. Wi-Fi is de-licenced spectrum that is open access and not allocated. Other de-licenced spectrum would not need to be allocated either, although in India, bands such as 60 GHz could be restricted to authorised operators.

It needs government intervention to cut the Gordian knot and initiate discussions on pooling spectrum for networks and working out practicable, sustainable options. Here’s hoping good sense and guts will help to make a start.

Shyam (no-space) Ponappa at gmail dot com
1: "V band - 60 GHz: The Key to Affordable Broadband in India"
White Paper by Broadband India Forum, November 9, 2016http://www.broadbandindiaforum.com/img/White%20Paper%20on%20V-BAND%20Revised%20Final.pdf

For more details visit https://cis-india.org/telecom/blog/business-standard-december-6-2017-shyam-ponappa-the-tragedy-of-the-unused-commons

November 2017 Newsletter

praskrishna — 2018-01-10T01:57:29Z

November 2017 Newsletter

Dear readers,

Previous issues of the newsletters can be accessed here.

Highlights
Anubha Sinha took part in the 35th Session of the World Intellectual Property Organization (“WIPO”) Standing Committee on Copyright and Related Rights (“SCCR”) at Geneva from 13 November, 2017 to 18 November, 2017. She posed a question on the agenda 'Other Matters' on behalf of CIS on Day 5, 17 November, 2017. CIS also gave statements on Limitations and Exceptions for Libraries and Archives and GRULAC Proposal for Analysis of Copyright in the Digital Environment. CIS-A2K signed a Memorandum of Understanding with the Telangana Government’s IT, Electronics & Communications Department with to catalyse the development of the Wikimedia movement in Telangana and improve the state of free-licensed digital content in Telugu and Urdu. The Ministry of Electronics & Information Technology, Government of India has published the Guidelines for Indian Government Websites (GIGW). Nirmita Narasimhan on behalf of the Centre for Internet & Society gave comments on GIGW. The government has already set up a Nudge unit; now, it should apply the Nobel laureate's insights on auctions relating to essential infrastructure wrote Shyam Ponappa in an article in the Business Standard on November 1, 2017. DataMeet and CIS have collaborated on identifying and addressing the challenges to open up and integrate data and information in the water sector. CIS commented on the Consultation Paper on Privacy, Security and Ownership of Data in Telecom Sector published by the Telecom Regulatory Authority of India on August 9, 2017. CIS published a report that compares laws and regulations in the United Kingdom and India to see the similarities and disjunctions in cyber security policy between them. CIS sent comments on TRAI consultation paper on promoting local telecom equipment manufacturing. The submission drew on research primarily done in the Pervasive Technologies project.

Highlights

Anubha Sinha took part in the 35th Session of the World Intellectual Property Organization (“WIPO”) Standing Committee on Copyright and Related Rights (“SCCR”) at Geneva from 13 November, 2017 to 18 November, 2017. She posed a question on the agenda 'Other Matters' on behalf of CIS on Day 5, 17 November, 2017. CIS also gave statements on Limitations and Exceptions for Libraries and Archives and GRULAC Proposal for Analysis of Copyright in the Digital Environment.
CIS-A2K signed a Memorandum of Understanding with the Telangana Government’s IT, Electronics & Communications Department with to catalyse the development of the Wikimedia movement in Telangana and improve the state of free-licensed digital content in Telugu and Urdu.
The Ministry of Electronics & Information Technology, Government of India has published the Guidelines for Indian Government Websites (GIGW). Nirmita Narasimhan on behalf of the Centre for Internet & Society gave comments on GIGW.
The government has already set up a Nudge unit; now, it should apply the Nobel laureate's insights on auctions relating to essential infrastructure wrote Shyam Ponappa in an article in the Business Standard on November 1, 2017.
DataMeet and CIS have collaborated on identifying and addressing the challenges to open up and integrate data and information in the water sector.
CIS commented on the Consultation Paper on Privacy, Security and Ownership of Data in Telecom Sector published by the Telecom Regulatory Authority of India on August 9, 2017.
CIS published a report that compares laws and regulations in the United Kingdom and India to see the similarities and disjunctions in cyber security policy between them.
CIS sent comments on TRAI consultation paper on promoting local telecom equipment manufacturing. The submission drew on research primarily done in the Pervasive Technologies project.

CIS in the News:

Big Data for governance (Alekhya Hanumanthu; Telangana Today; November 4, 2017).
How tech is making life easier for differently-abled (Shalini Umachandrani; November 7, 2017).
India Today Conclave Next 2017: Aadhaar was rushed, says MP Rajeev Chandrashekhar (Priya Pathak; India Today; November 8, 2017).
What You Need To Worry About Before Linking Your Mobile Number With Aadhaar (Roopa Raju and Shekhar Rai; Youth Ki Awaaz; November 8, 2017).
OPINION | Data is New Oil and Human Mind the New Battlefield. India Must Wake Up Now (Lt. General (Retd.) D. S. Hooda; News18.com; November 11, 2017).
Aadhaar seeding: benefits and concerns (Shaikh Zoaib Saleem; Livemint; November 14, 2017).
Privacy issues exist even without Aadhaar (Ronald Abraham; November 15, 2017).
Advocating for Openness: Nine Ways Civil Society Groups Have Mobilized to Defend Internet Freedom (Centre for International Media Assistance; November 15, 2017).
Govt working to set up financial CERT to tackle cyber threats (Komal Gupta; Livemint; November 16, 2017).
Financial CERT to combat cyber threats, says MoS home affairs (CISO MAG; November 17, 2017).
UIDAI admits 210 government websites made Aadhaar details public (Financial Express; November 20, 2017).
India’s internet missionaries: The women Google is relying on to spread its Next Billion message (Sunny Sen; Livemint; November 21, 2017).
FCC’s plan to repeal net neutrality may not impact India (Surabhi Agarwal; Economic Times; November 23, 2017).
Indian activists slam FCC decision to ditch net neutrality (Kul Bhushan; Hindustan Times; November 23, 2017).
FCC’s plan to repeal net neutrality may not impact India (Surabhi Agarwal; Economic Times; November 23, 2017).
Why should you keep a close eye on the net neutrality debate in the US (Subhrojit Mallick; Digit; November 24, 2017).
Cyberattacks a significant threat to democracy: Modi (Komal Gupta; Livemint; November 24, 2017).
Aadhaar verification at airports raises need for stricter data privacy regulations (Aman Sethi; Hindustan Times, November 27, 2017).
IDAP Interview Series: Interview with Nirmita Narasimhan (IDIA Law; November 27, 2017).
Govt releases white paper on data protection framework (Komal Gupta; Livemint; November 28, 2017).
Bengalureans to receive Helen Keller award (Deccan Herald; November 30, 2017).

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Accessibility & Inclusion
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India has an estimated 70 million persons with disabilities who don't have access to read printed materials due to some form of physical, sensory, cognitive or other disability. As part of our endeavour to make available accessible content for persons with disabilities, we are developing a text-to-speech software in 15 languages with support from the Hans Foundation. The progress made so far in the project can be accessed here.

Submission

Comments on Guidelines for Indian Government Websites (Nirmita Narasimhan; November 26, 2017).

►Copyright & Patent

35th SCCR: CIS Statement on Limitations and Exceptions for Libraries and Archives (Anubha Sinha; November 15, 2017).
35th SCCR: CIS Statement on Limitations and Exceptions for Libraries and Archives (Anubha Sinha; November 17, 2017).
35th SCCR: CIS' Question to Dr. Rostama on her Study on the Impact of the Digital Environment on Copyright Legislation (Anubha Sinha; November 19, 2017).

►Wikipedia

Blog Entry

CIS-A2K signs MoU with Telangana Government (Manasa Rao; November 8, 2017).

►Openness

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Internet Governance
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►Privacy

Blog Entries

A Comparison of Legal and Regulatory Approaches to Cyber Security in India and the United Kingdom (Divij Joshi; edited by Elonnai Hickok; November 12, 2017).
Counter Comments on TRAI's Consultation Paper on Privacy, Security and Ownership of Data in Telecom Sector (Amber Sinha; November 23, 2017).

Participation in Event

BIS International Seminar on Internet of Things (Organized by BIS; November 15, 2017; India Habitat Centre, New Delhi). Amber Sinha attended the event.
Internet Universality Indicators for a Safe, Secure and Inclusive Cyberspace for Sustainable Development (Organized by UNESCO in collaboration with the Ministry of Electronics and IT, Government of India; UNESCO Conference Room, Chanakyapuri, New Delhi; November 17, 2017). Amber Sinha attended the event.

Roundtable on Data Integrity and Privacy (Organized by Observer Research Foundation; November 18, 2017). The round table discussion was chaired by Shri Baijayant Panda, Hon'ble Member of Parliament.

►Cyber Security

Blog Entry

Breach Notifications: A Step towards Cyber Security for Consumers and Citizens (Amelia Andersdotter; November 14, 2017).

Event Organized

Roundtable on Enhancing Indian Cyber Security through Multi-Stakeholder Cooperation (Indian Islamic Centre; Lodhi Road; New Delhi; November 4, 2017).
Open House on Security Practices in FinTech (Organized by CIS and Has Geek; November 17, 2017).

Participation in Event

Multinational Cyber Security Forum at University of Haifa (Organized by Center for Cyber, Law and Policy and University of Haifa in collaboration with the Hewlett Foundation Cyber Initiative; November 5 - 7, 2017). Sunil Abraham participated in the meeting held in Israel.
Global Commission on the Stability of Cyberspace (GCSC) (Organized by GCSC; November 21, 2017; New Delhi). Pranesh Prakash participated in the event.

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Telecom
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CIS is involved in promoting access and accessibility to telecommunications services and resources, and has provided inputs to ongoing policy discussions and consultation papers published by TRAI. It has prepared reports on unlicensed spectrum and accessibility of mobile phones for persons with disabilities and also works with the USOF to include funding projects for persons with disabilities in its mandate:

Article

Nobel Laureate Richard Thaler's Views On Auctions (Shyam Ponappa; Business Standard; November 1, 2017).

Submission

Comments on TRAI Consultation Paper on Promoting Local Telecom Equipment Manufacturing (Anubha Sinha; November 26, 2017).

Articles

Digital native: Rebellion by Google Doc (Nishant Shah; Indian Express; November 4, 2017)
Digital native: Let there be life (Nishant Shah; Indian Express; November 19, 2017).

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About CIS
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The Centre for Internet and Society (CIS) is a non-profit organisation that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. The areas of focus include digital accessibility for persons with disabilities, access to knowledge, intellectual property rights, openness (including open data, free and open source software, open standards, open access, open educational resources, and open video), internet governance, telecommunication reform, digital privacy, and cyber-security. The academic research at CIS seeks to understand the reconfigurations of social and cultural processes and structures as mediated through the internet and digital media technologies.

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► Support Us

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For more details visit https://cis-india.org/about/newsletters/november-2017-newsletter

CIS Comments on TRAI Consultation Paper on Promoting Local Telecom Equipment Manufacturing

sinha — 2017-11-26T02:56:15Z

The Centre for Internet & Society (CIS) sent comments to the TRAI Consultation Paper on promoting telecom equipment manufacturing. CIS submission drew primarily from the research done in the Pervasive Technologies project.

Read TRAI's Consultation Paper on Promoting Local Telecom Equipment Manufacturing

Preliminary

This submission presents comments by the Centre for Internet and Society, India ("CIS") on the Consultation Paper on Promoting Local Telecom Equipment Manufacturing dated 18.09. 2017, released by the Telecom Regulatory Authority of India (TRAI), under Department of Telecom, Ministry of Communications and Information Technologies (“the TRAI Consultation Paper”).
We commend TRAI for its efforts at seeking inputs from various stakeholders on this important and timely issue and are thankful for the opportunity to put forth our views.
We have addressed questions 3 and 5 of the TRAI Consultation Paper. Question numbers referred to in our submission correspond to those in the TRAI Consultation Paper.
Further, the Department of Industrial Planning and Promotion (DIPP) invited comments on SEPs and their availability on FRAND terms on 01. 03. 2016.[1] CIS submitted a detailed response to the consultation, and our present submission will draw significantly from our earlier response[2], as well as new empirical research concluded in the since the time of the consultation.

About CIS

CIS[3] is a non-profit organisation that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. Our areas of focus include IP rights, openness, internet governance, telecommunication reform, free speech, intermediary liability, digital privacy, cyber-security, and accessibility for persons with diverse abilities.
We strive to maximise public benefit, useful innovation, vibrant competition and consumer welfare. This submission is consistent with our commitment to the domestic goals (as enumerated in Make in India and Digital India), and the protection of India's national interest at the international level.

Submission on the Issues for Resolution

“Q.3 Are the existing patent laws in India sufficient to address the issues of local manufacturers? If No, then suggest the measures to be adopted and amendments that need to be incorporated for supporting the local telecom manufacturing industry.”

We submit that amendments to the Patents Act, 1970 may not be preferred, presently. It may be noted that there have been no judgments concluded by Indian courts on disputes relating to licensing of SEPs, yet. Justice Bakhru’s landmark order in Telefonaktiebolaget LM Ericsson (Publ) v. Competition Commission of India (2016) provided valuable clarity on the issue of conflict between remedies under Patents Act, 1970 and Competition Act, 1970. As various other matters are yet to be conclusively decided, and given the complex legal questions involved around the interpretation of Patents Act, 1970 and Competition Act, 2002, and constitutional issues around the jurisdiction of regulators and the power of judicial review of the courts, we believe that it would be prudent to examine the ruling of the courts on these issues in some detail, before considering amendments.

However, to support the local telecom manufacturing industry the Government of India may adopt and implement the following measures:

Develop Model Guidelines to improve the working of Indian Standard Setting Organisations (SSOs): Given the increasing complexity and time-consuming nature of SEP litigation in India, there is a tangible threat of the abuse of the FRAND process, it might be useful for the government to make suggestions on the working of Indian SSOs. The functioning of Indian SSOs has not been satisfactory and it is suggested that the government develop Model Guidelines that may be adopted by Indian SSOs, taking into account India specific requirements. The India specific requirements include a large and exponentially growing mobile device market which has made it possible for manufacturers, patent owners and implementers alike to achieve financial gains even with a low margin. We believe that this measure will also enable the fulfillment of the objectives of the Make in India and Digital India initiatives.

We recommend that various stakeholders, including IP holders, potential licensees and users of IP, civil society organizations, academics, and, government bodies, including the Indian Patent Office, the Department of Telecommunications, the DIPP, TRAI, and, the CCI be consulted in the creation of these Model Guidelines.

In our opinion, the Model Guidelines may cover (a) the composition of the SSO; (b) the process of admitting members; (c) the process of the determination of a standard or technical specification; (d) the process of declassification of a standard or technical specification; (e) the IPR Policy; (f) resolution of disputes; (g) applicable law.
Initiate the formation of a patent pool of critical mobile technologies and cap royalty payments: In light of the observed inadequacies in the IPR policies of various SSOs in India, as well the spate of ongoing patent infringement lawsuits around mobile technologies, we recommend that the government intervene in the setting of royalties and FRAND terms by setting up a patent pool of critical mobile technologies and apply a compulsory license with a five per cent royalty. Further, patent pools should be required to offer FRAND licenses on the same terms to both members and nonmembers of the pool.

Our motivations for this proposal are manifold. In our opinion, it is nearly impossible for potential licensees to avoid inadvertent patent infringement. As a part of our research on technical standards applicable to mobile phones sold in India, we have found nearly 322 standards so far.[4] It is submitted that carrying out patent searches for all the standards would be extremely expensive for potential licensees. Further, even if such searches were to be carried out, different patent owners, SSOs and potential licensees disagree on valuation, essentiality, enforceability, validity, and coverage of patents. In addition, some patent owners are non-practising entities and may not be members of SSOs. The patents held by them are not likely to be disclosed. More importantly, homegrown manufacturers that have no patents to leverage and may be new entrants in the market would be especially disadvantaged by such a scenario. Budget phone manufacturers, standing to incur losses either as a result of heavy licensing fees, or, potential litigation, may close down. Alternatively, they may pass on their losses to consumers, driving the now affordable phones out of their financial reach. With the objectives of Make in India and Digital India in sight, it is essential that Indian consumers continue to have access to devices within their purchasing power.

Further, how did we arrive at a cap of 5 percent? The rationale for this figure is the royalty cap imposed by India in the early 1990s. As part of regulating foreign technology agreements, the (former) Department of Industrial Development (later merged with DIPP) capped royalty rates in the early 1990s. Payment of royalties was capped at either a lump sum payment of $2 million, or, 5 percent on the royalty rates charged for domestic sale, and, 8 percent for export of goods pertaining to “high priority industries”.[5] Royalties higher than 5 percent or 8 percent, as the case may be, required securing approval from the government. While the early 1990s (specifically, 1991) was too early for the mobile device manufacturing industry to be listed among high priority industries, the public announcement by the government covered computer software, consumer electronics, and electrical and electronic appliances for home use. The cap on royalty rates was lifted by the DIPP in 2009.[6] It is submitted in the case of mobile device technology, we are witnessing a situation similar to that of the 1990s. In this sphere, most of the patent holders are multinational corporations which results in large royalty amounts leaving India. At the same time, litigation over patent infringement in India has limited the manufacture and sale of mobile devices of homegrown brands. While SEP litigation in India is indeed comparable to international SEP litigation on broader issues raised, specifically competition law concerns, but differs crucially where the parties are concerned. International SEP litigation is largely between multinational corporations with substantial patent portfolios, capable of engaging in long drawn out litigations, or engaging in other strategies including setting off against each other’s patent portfolios. Dynamics in the Indian market differ – with a larger SEP holder litigating against smaller manufacturers, many of whom are indigenous, homegrown.

In June, 2013, we had recommended to the erstwhile Hon’ble Minister for Human Resource Development[7] that a patent pool of essential technologies be established, with the compulsory licensing mechanism. Subsequently, in February, 2015, we reiterated this request to the Hon’ble Prime Minister.[8] We propose that the Government of India initiate the formation of a patent pool of critical mobile technologies and mandate a five percent compulsory license.[9] As we have stated in our request to the Hon’ble Prime Minister, we believe that such a pool would “possibly avert patent disputes by ensuring that the owners' rights are not infringed on, that budget manufacturers are not put out of business owing to patent feuds, and that consumers continue to get access to inexpensive mobile devices. Several countries including the United States issue compulsory licenses on patents in the pharmaceutical, medical, defence, software, and engineering domains for reasons of public policy, or to thwart or correct anticompetitive practices.”[10] We believe that such a measure will not be in breach of our international obligations under the TRIPS Agreement.
Increase transparency in the patent system by making patentees comply with the law: The Patents Act, 1970 requires patentees and licensees to submit a statement on commercial working of the invention to the Controller every year.[11] Form 27 under section 146(2) of the Act lists the details necessary to be disclosed for compliance of the requirement of “working”. A jurisprudential analysis reveals the rationale and objective behind this mandatory requirement. Undeniably, the scheme of the Indian patent regime makes it amply clear that “working” is a very important requirement, and the public as well as competitors have a right to access this information in a timely manner, without undue hurdles. Indeed, as the decision[12] in Natco Pharma v. Bayer Corporation[13] reveals, the disclosures in Form 27 were crucial to determining the imposition of a compulsory license on the patentee. Thus, broadly, Form 27 disclosures can critically enable willing licensees to access patent “working” information in a timely manner.

However, there has been little compliance of this requirement by the patentees, despite the Indian Patent Office (IPO) reiterating the importance of compliance through the issuance of multiple public notices[14] (suo motu and in response to a public interest litigation filed in 2011[15]), and, reminding the patentees that noncompliance is punishable with a heavy fine.[16] Findings of research submitted by one of the parties[17] in the writ of the 2011 public interest litigation Shamnad Basheer v. Union of India and others[18] reveal as follows. First, a large number of Form 27s are unavailable for download from the website of the IPO. This possibly indicates that the forms have either not been filed by the patentees with the IPO, or have not been uploaded (yet) by the IPO. Second, a large number of filings in the telecom sector remain incomplete.

In 2015, CIS queried the IPO website for Form 27s of mobile device patents to arrive at a similar conclusion. We obtained 4,916 valid Form 27s, corresponding to 3,126 mobile device patents from public online records. These represented only 20.1% of all Forms 27 that should have been filed and corresponded to only 72.5% of all mobile device patents for which Forms 27 should have been filed. Forms 27 were missing for almost all patentees, and even among Forms 27 that were obtained, almost none contained useful information regarding the working of the subject patents or fully complying with the informational requirements of the Indian Patent Rules.[19]

Further, in our study, we observed that patentees adopted drastically different positions regarding the definition of patent working, some arguing that importation of products into India or licensing of Indian suppliers constituted working, while others even went so far as to argue that the granting of a worldwide license to a non-Indian firm constituted working in India. Several significant patentees claimed that they or their patent portfolios were simply too large to enable the provision of information relating to individual patents, and instead provided gross revenue and product sale figures, together with historical anecdotes about their long histories in India.

The Indian government has made little or no effort to monitor or police compliance with Form 27 filings, undoubtedly leading to significant non-compliance. We also propose the alteration of the Form 27 template[20] to include more disclosures.[21] Presently, patentees are required to declare number of licensees and sub-licensees. We specifically propose that the format of Form 27 filings be modified to include patent pool licenses, with an explicit declaration of the names of the licensees and not just the number.
Require royalty rates to be decided on the basis of the Smallest Saleable Patent Practicing Component: Most modern telecommunication and IT devices are complex with numerous technologies working in tandem. Different studies indicate that the number of patents in the US applicable to smartphones is between 200,000 and 250,000.[22] A comprehensive patent landscape of mobile device technologies conducted by CIS reveals that nearly 4,000 patents are applicable to mobile phones sold in India.[23] It is thus extremely difficult to quantify the exact extent of interaction and interdependence between technologies in any device, in such a way that the exact contribution of the patented technology to the entire device can be determined. Thus, we submit that royalty rates for SEPs should be based on the smallest saleable patent practising component, and not on the net price of the downstream product.

The net cost of the device is almost always several times that of the chipset that implements the patented technology. Armstrong et al[24] have found that the cost of a 4G baseband chip costs up to $20 including royalties in a hypothetical $400 phone sold in the US. One of the litigating parties in the ongoing patent infringement lawsuits in India has stated that one of the reasons for preferring to leverage its patents as downstream as possible in the value chain is that it will earn the company more royalties.[25] In instances where patent exhaustion occurs much earlier in the value chain, such as in the case of the company’s cross-licenses with Qualcomm (another company that owns patents to chip technologies), the company does not try to obtain royalties from the selling prices of devices for the cross-licensed technologies. It is submitted that such market practices could be detrimental to the government’s objectives such as providing a mobile handset to every Indian by 2020 as a part of the Digital India programme.[26] It is also worth noting in this context that the mobile device is the first and only medium of access to the Internet and telecom services for a large number of Indians, and, consequently, the only gateway to access to knowledge, information and critical services, including banking.[27]

“Q.5 Please suggest a dispute resolution mechanism for determination of royalty distribution on FRAND (Fair Reasonable and Non Discriminatory) basis.”

The licensing of SEPs on FRAND terms requires the parties to negotiate “reasonable” royalty rates in good faith, and apply the terms uniformly to all willing licensees. It is our submission that if the parties cannot agree to FRAND terms, they may enter into binding arbitration. Further, if all efforts fail, there exist remedies under the Patents Act and the Competition Act, 2002 to address the issues.

Section 115 of the Patents Act empowers the court to appoint an independent scientific adviser “to assist the court or to inquire and report upon any such question of fact or of opinion (not involving a question of interpretation of law) as it may formulate for the purpose.”[28] Such an independent adviser may inform the court on the technical nuances of the matter.

Further, under the Patents Act, pending the decision of infringement proceedings the Court may provide interim relief, if the plaintiff proves first, a prima facie case of infringement; second, that the balance of convenience tilts in plaintiff’s favour; and, third, that if an injunction is not granted the plaintiff shall suffer irreparable damage. However, it is our suggestion that courts adopt a more cautious stance towards granting injunctions in the field of SEP litigation. First, in our opinion, injunctions may prove to be a deterrent to arrive at a FRAND commitment, in particular, egregiously harming the willing licensee. Second, especially in the Indian scenario, where litigating parties operate in vastly different price segments (thereby targeting consumers with different purchasing power), it is difficult to establish that “irreparable damage” has been caused to the patent owner on account of infringement. Third, we note the approach of the European Court of Justice, which prohibited the patent holder from enforcing an injunction provided a willing licensee makes an offer for the price it wishes to pay to use a patent under the condition that it deposited an amount in the bank as a security for the patent holder.[29] Fourth, we also note the approach of the Federal Trade Commission in the USA, which only authorizes patent holders to seek injunctive relief against potential licensees who have either stated that they will not license a patent on any terms, or refuse to enter into a license agreement on terms that have been set in the final ruling of a court or arbitrator.[30] Further, as Contreras (2015)[31] observes, that the precise boundaries of what constitutes as an unwilling licensee remains to be seen. We observe a similar ambiguity in Indian jurisprudence, and accordingly submit that courts should carefully examine the conduct of the licensee to injunct them from the alleged infringement.

Concluding Remarks

We are thankful to TRAI for the opportunity to make these submissions. It would be our pleasure and privilege to discuss these comments with the TRAI; and, supplement these with further submissions if necessary. We also offer our assistance on other matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards the sustained innovation, manufacture and availability of mobile technologies in India.

[1] Department of Industrial Policy and Promotion Discussion Paper on Standard Essential Patents and their Availability on Frand Terms, available at https://cis-india.org/a2k/blogs/discussion-paper-on-standard-essential-patents-and-their-availability-on-frand-terms (last accessed November 13, 2017)

[2] Anubha Sinha, Nehaa Chaudhari and Rohini Lakshane, “CIS’ Comments on Department of Industrial Policy and Promotion Discussion Paper on Standard Essential Patents and their Availability on Frand Terms” (April 23, 2016); available at https://cis-india.org/a2k/blogs/comments-on-department-of-industrial-policy-and-promotion-discussion-paper-on-standard-essential-patents-and-their-availability-on-frand-terms

[3] www.cis-india.org

[4] Rohini Lakshané, CIS, List of Technical Standards and IP Types (Working document), available at https://drive.google.com/file/d/0B8SgjShAjhbtaml5eW50bS01d2s/view?usp=sharing (last accessed 13 November, 2017).

[5] Kumkum Sen, News on Royalty Payments Brings Cheer in New Year, available at http://www.businessstandard.com/article/economypolicy/newsonroyaltypaymentbringscheerinnewyear11001 0400044_1.html (last accessed 13 November, 2017).

[6] See Sanjana Govil, Putting a Lid on Royalty Outflows How the RBI Can Help Reduce India’s IP Costs , available at http://cisindia.org/a2k/blogs/lidonroyaltyoutflows (last accessed 13 November, 2017) for a discussion on the introduction of royalty caps in the early 1990s, and its success in reducing the flow of money out of India.

[7] Nehaa Chaudhari, Letter for Establishment of Patent Pool for Low cost Access Devices through Compulsory

Licenses, available at http://cisindia.org/a2k/blogs/letterforestablishmentofpatentpoolforlowcostaccessdevices (last accessed 13 November, 2017).

[8] See Rohini Lakshané, Open Letter to PM Modi, available at http://cisindia.org/a2k/blogs/openlettertoprimeministermodi (last accessed 13 November, 2017) for further details of CIS’ proposal.

[9] Rohini Lakshané, FAQ: CIS’ proposal to form a patent pool of critical mobile technology, September 2015, available at http://cisindia.org/a2k/blogs/faqcisproposalforcompulsorylicensingofcriticalmobiletechnologies (last accessed 13 November, 2017).

[10] Id.

[11] Section 146(2) of the Patents Act, 1970.

[12] Sai Vinod, Patent Office Finally Takes Form 27s Seriously, available at http://spicyip.com/2013/02/patentofficefinallytakesform27s.html (last accessed 13 November, 2017).

[13] Order No. 45/2013 (Intellectual Property Appellate Board, Chennai), available at http://www.ipab.tn.nic.in/0452013.htm (last accessed 13 November, 2017).

[14] Intellectual Property India, Public Notice, available at

http://www.ipindia.nic.in/iponew/publicNotice_Form27_12Feb2013.pdf ((last accessed 13 November, 2017) and Intellectual Property India, Public Notice, available at http://ipindia.nic.in/iponew/publicNotice_24December2009.pdf (last accessed 13 November, 2017).

[15] Supra note 11.

[16] Id.

[17] See research findings available at http://spicyip.com/wpcontent/uploads/2015/05/FORM27WP1Rcopy.pdf (last accessed 13 November, 2017).

[18] In the High Court of Delhi, W.P.(C) 5590/2015. This litigation is currently ongoing. See, illustratively, Mathews P. George, Patent Working in India: Delhi HC issues notice in Shamnad Basheer v. Union of India & Ors. – I , available at http://spicyip.com/2015/09/patentworkinginindiadelhihcissuesnoticeinshamnadbasheervunionofindiaorsi.html (last accessed 13 November, 2017).

[19] Contreras, Jorge L. and Lakshané, Rohini and Lewis, Paxton, Patent Working Requirements and Complex Products (October 1, 2017). NYU Journal of Intellectual Property & Entertainment Law, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3004283

[20] Form 27, The Patents Act, available at http://ipindia.nic.in/ipr/patent/manual/HTML%20AND%20PDF/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure%20%20html/Forms/Form27.pdf (last accessed November 13, 10`7).

[21] However, we came across some complaints raised by patentees and industry observers regarding the structure of the Form 27 requirement - namely, patents covering complex, multi-component products that embody dozens of technical standards and thousands of patents are not necessarily amenable to the individual-level data requested by Form 27. See Contreras, Jorge L. and Lakshané, Rohini and Lewis, Paxton, Patent Working Requirements and Complex Products (October 1, 2017). NYU Journal of Intellectual Property & Entertainment Law, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3004283

[22] Mark Lemley and Carl Shapiro, Patent Holdup and Royalty Stacking, 85 Tex. L. Rev. at 2015 ; See also, for e.g.,

RPX Corporation, Amendment No. 3 to Form Sl,11 Apr. 2011, at 59, available at http://www.sec.gov/Archives/edgar/data/1509432/000119312511101007/ds1a.htm (last accessed 22 April, 2016), quoting “Based on our research, we believe there are more than 250,000 active patents relevant to today’s

smartphones…” .; See further Steve Lohr, Apple Samsung Case Shows Smartphone as Legal Magnet, New York Times, 25 Aug. 2012, available at http://www.nytimes.com/2012/08/26/technology/applesamsungcaseshowssmartphoneaslawsuitmagnet.html (last accessed November13, 2017).

[23] Jorge L. Contreras and Rohini Lakshané, Patents and Mobile Devices in India: An Empirical Survey, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2756486 (last accessed 13 November, 2017).

[24] Ann Armstrong, Joseph J. Mueller and Timothy D. Syrett, The SmartphoneRoyalty Stack:Surveying Royalty Demands for the Components Within Modern Smartphones, available at https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/TheSmartphoneRoyaltyStackArmstrongMuellerSyrett.pdf (last accessed 13 November, 2017)

[25] Florian Mueller, Ericsson Explained Publicly why it Collects Patent Royalties from Device (Not Chipset) Makers, available at http://www.fosspatents.com/2014/01/ericssonexplainedpubliclywhyits.Html (last accessed 13 November, 2017).

[26] Romit Guha and Anandita Singh Masinkotia, PM Modi’s Digital India Project:Government to Ensure that Every Indian has a Smartphone by 2019, available at http://articles.economictimes.indiatimes.com/20140825/news/53205445_1_digitalindiaindiatodayfinancialservices (last accessed 13 November, 2017).

[27] Nehaa Chaudhari, Standard Essential Patents on Low Cost Mobile Phones in India: A Case to Strengthen Competition Regulation? available at http://www.manupatra.co.in/newsline/articles/Upload/08483340C1B94BA4B6A9D6B6494391B8.pdf (last accessed 13 November, 2017).

[28] Section 115 of the Patents Act, 1970.

[29] Huawei Technologies Co. Ltd v. ZTE Corp. and ZTE Deutschland , Judgment of the Court (Fifth Chamber) of 16 July 2015 in GmbH C170/13.

[30] Third Party United States Fed. Trade Commission’s Statement on the Public Interest, In re Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, U.S. Int’l Trade Comm’n, Inv. No. 337TA745 (Jun. 6, 2012).

[31] Jorge L. Contreras, A Brief History of FRAND: Analyzing Current Debates in Standard Setting and Antitrust Through a Historical Lens , 80 Antitrust Law Journal 39 (2015), available at h ttp://ssrn.com/abstract=2374983 or http://dx.doi.org/10.2139/ssrn.2374983 (last accessed 13 November, 2017).

For more details visit https://cis-india.org/telecom/blog/cis-comments-on-promoting-local-telecom-equipment-manufacturing

Consultation Paper on Promoting Local Telecom Equipment Manufacturing

Admin — 2018-01-02T15:55:57Z

Rohini Lakshané and Prof. Contreras's Vanderbilt paper was quoted in this TRAI consultation paper.

To read the submission on TRAI website, click here
To read CIS comments on local telecom equipment manufacturing, click here

For more details visit https://cis-india.org/telecom/news/consultation-paper-on-promoting-local-telecom-equipment-manufacturing

Response Submission on TRAI's Consultation Paper on Privacy, Security and Ownership of Data in Telecom Sector

Amber Sinha, Elonnai Hickok and Udbhav Tiwari — 2019-03-13T00:27:30Z

CIS submitted its comments on the consultation paper on privacy, security and ownership of data in telecom sector which was published by the Telecom Regulatory Authority of India on August 9, 2017.

The submission is divided in four parts. The first part introduces the document, the second part gives an overview of CIS and its work, the third part contains general comments on the consultation paper and the fourth part contains specific comments on questions posed in the consultation paper. Click to read the full submission made to the Telecom Regulatory Authority of India on November 6, 2017.

For more details visit https://cis-india.org/telecom/blog/response-submission-on-trais-consultation-paper-on-privacy-security-and-ownership-of-data-in-telecom-sector

Nobel Laureate Richard Thaler's Views On Auctions

Shyam Ponappa — 2018-01-05T14:09:57Z

The government has already set up a Nudge unit; now, it should apply the Nobel laureate's insights on auctions relating to essential infrastructure.

The article by Shyam Ponappa was published in Business Standard on November 1, 2017 and in Organizing India Blogspot on November 2, 2017

You may be surprised to learn that the central government has been applying ideas from this year’s Nobel Prize winner for economics, Richard Thaler, even before the award. According to press reports, a “Nudge” unit was set up last year (2016) by the Niti Aayog in association with the Bill & Melinda Gates Foundation. Its purpose is to apply behavioural insights in policymaking for initiatives such as Swachh Bharat, Jan-Dhan Yojana, and Digital India. There are issues about ethics and motivation in the use of “nudges”, of course, with the best nudges likened to effective GPS devices that make it easier for people to get where they want to go with enabling information, and without covert manipulation.

Recognise, however, that manipulation can cut both ways. It can be beneficial for those being influenced, as when we eat healthier, observe regulations, or manage waste better. It can also be detrimental, as when manipulators entice, persuade, or coerce us to act against our interests, whether it is the private sector, government or vote seekers. Examples are enticements or misleading consumer information, government pressure for compliance without appropriate regulatory bases, or populist measures for votes.

Incidentally, Mr Thaler also advises the $6-billion Undiscovered Managers Behavioral Value Fund, which reportedly does better than 97 per cent of its peers, with average annual returns of 16 percent.

Ironically, one of Mr Thaler’s powerful early insights has been ignored and is awaiting discovery and application especially in India. It is about the “winner’s curse” in auctions, the phenomenon that winners of highly contested auctions tend to overbid. This is because when there is strong contention for a desirable asset, the one who most overvalues the asset tends to bid the highest. Mr Thaler demonstrates that the curse occurs in two ways: Where the winning bid exceeds the value of the winnings, or where the gains are below expectations. Mr Thaler’s 1988 paper demonstrated these effects through examples including oil and gas leases, corporate takeovers, publishing rights for books, and bidding for baseball players.1 This is especially important for India because we need more effective resource management, whether of coal/fuel for power, or of spectrum for communications. We can ill-afford the high opportunity costs of bad policies.

To be fair to policymakers in India, findings by Mr Thaler and others on auctions have been ignored by other governments greedy for immediate revenue. The UK, Europe and the USA went through disastrous 3G auctions that bankrupted their telecommunications industries. The exceptions were the Scandinavian countries and others such as Japan, South Korea, and China, where circumstances were managed so that there were either no auctions, or less contentious auctions. Tomes have been written on the “success” of high bids that resulted in enormous government collections. The consequences for the operating companies, however, were devastating, because of the severe drain on their finances from the heavy up-front investments. This was aggravated by the collapse of the technology bubble in 2000.

All the following auctions had disastrous outcomes for services:2

1994: The first US auction netted huge bids. Soon after, a number of “successful” bidders declared bankruptcy.

In India, the 1994 auction was followed by chaos because of overbidding and default. The sector recovered only after the auction fees were set aside for revenue-sharing in 1999 through the New Telecom Policy (NTP 1999), and lower shares were set in 2003.

1995-1996: US “C”-Block auction — several “successful” bidders declared bankruptcy.

2000 UK and 2001 EU 3G auctions: Netted $35 billion in the UK. In Austria, Germany and Italy, bids netted over $100 billion, 10 times the expectation. Considered a huge success, but winners couldn’t repay their debts, and the markets took a decade to recover.

2010: India’s 3G and broadband wireless auction with over Rs 1 lakh crore bid was considered a great success. Having paid too much for spectrum, operators struggled thereafter and new systems are slow to roll-out.

Meanwhile, auction experts wrote disparagingly of “failures” (low fees) in countries such as the Netherlands, Switzerland, Sweden, and ignored countries such as South Korea, Japan and Finland where there were no auctions (until 2009). However, these “failures” had the best broadband services, according to a 2010 study by the Saïd Business School at Oxford.

After India’s 2015 auction, researchers at ICRIER observed that the anticipated growth dividend from telecom didn’t materialise. Their rhetorical question and answer: “Does this mean the much-needed mobile broadband ecosystem will be further pushed into the future? If so, this would be another case of lost opportunity in telecom.”3 And that’s what it has been so far.

Broadband is an essential aspect of infrastructure. For India to break out of its low-growth trajectory, our policies have to recognise the impediments caused by spectrum fragmentation and high-cost auctions, and create practicable alternatives such as shared networks including spectrum that is paid for only when it is used. Also, more open-access and light-licensed bands in line with global developments will help India reap the benefits of ecosystems of devices as they evolve, e.g., in 60 GHz and TV White Space bands (for which India is ideally positioned). Instead, these technologies are blocked as is the spectrum, which remains unused, creating more barriers for ourselves by having to devise high-cost workarounds. Our ministries – for communications, electronics and information technology, information and broadcasting, defence, and finance – need to address technology applications and policies collectively to induct and align our systems and practices with global developments now and for the future.

Shyam (no space) Ponappa at gmail dot com

1. Richard Thaler, “Anomalies: The Winner’s Curse,” Journal of Economic Perspectives 2, no. 1 (Winter 1988): 191-202

2. There was one successful auction in India in 2001 for a fourth mobile operator in each circle (state), when markets were depressed and competition was subdued. Other auctions in India and abroad hailed as successes because of high-auction bids resulted in constrained networks and services

For more details visit https://cis-india.org/telecom/blog/business-standard-november-1-2017-nobel-laureate-richard-thaler-views-on-auctions

October 2017 Newsletter

praskrishna — 2018-01-10T00:53:03Z

October 2017 Newsletter

Dear readers,

Previous issues of the newsletters can be accessed here.

Highlights
CIS submitted its comments on mobile accessibility guidelines to the Ministry of Electronics & IT, Govt. of India. Between 1 to 16 September, an online discussion took place on the creation of social media guidelines and strategy for Telugu Wikimedia handles online. Manasa Rao captured the developments in a blog post. Padma Venkataraman in a blog entry chronologically mapped CIS’ efforts at enhancing financial transparency and accountability at ICANN, while providing an outline of what remains to be done. Shyam Ponappa's article on NPAs and structural issues was published in the Business Standard on October 5, 2017.

Highlights

CIS submitted its comments on mobile accessibility guidelines to the Ministry of Electronics & IT, Govt. of India.
Between 1 to 16 September, an online discussion took place on the creation of social media guidelines and strategy for Telugu Wikimedia handles online. Manasa Rao captured the developments in a blog post.
Padma Venkataraman in a blog entry chronologically mapped CIS’ efforts at enhancing financial transparency and accountability at ICANN, while providing an outline of what remains to be done.
Shyam Ponappa's article on NPAs and structural issues was published in the Business Standard on October 5, 2017.

CIS in the News:

Attempted data breach of UIDAI, RBI, ISRO and Flipkart is worrisome (DailyO, October 4, 2017).
Sex, drugs and the dark web (Hindu; October 7, 2017).
Ahead of data protection law roll out, experts caution that it shouldn't limit collection and use of data (First Post; October 12, 2017).
#NAMAprivacy: The economics and business models of IoT and other issues (Medianama; October 18, 2017).
#NAMAprivacy: Data standards for IoT and home automation systems (Medianama; October 18, 2017).
Majority of top politicians' Twitter followers fake: audit (Furquan Moharkan; Deccan Herald; October 24, 2017).
Awards for those working on employment opportunities for disabled (Eastern Mirror; October 24, 2017).
Nibbling away into your bank account, salami attackers cart away a fortune (New Indian Express; October 25, 2017).
Nirmita Narasimhan wins the 18th NCPEDP-Mindtree Helen Keller Award 2017! (National Centre for Promotion of Employment for Disabled People; October 31, 2017).

►Wikipedia

Blog Entries

Odia Wikisource Turns 3 (Manasa Rao; October 22, 2017).
Wikimedia Workshop at Ismailsaheb Mulla Law College, Satara (Subodh Kulkarni; October 24, 2017).
Marathi Wikipedia Edit-a-thon at Dalit Mahila Vikas Mandal, Satara (Subodh Kulkarni; October 24, 2017).
Marathi Wikipedia Workshop at MGM Trust's College of Journalism and Mass Communication, Aurangabad (Subodh Kulkarni; October 24, 2017).
Orientation Program at Kannada University, Hampi (A. Gopalakrishna; October 24, 2017).
Marathi Wikipedia Workshop at Solapur University (Subodh Kulkarni; October 24, 2017).
Discussion on Creation of Social Media Guidelines & Strategy for Telugu Wikimedia (Manasa Rao; October 24, 2017).

►Openness

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Internet Governance
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►Freedom of Expression

ICANN’s Problems with Accountability and the .WEB Controversy (Padma Venkataraman; October 24, 2017).
Why Presumption of Renewal is Unsuitable for the Current Registry Market Structure (Padma Venkataraman; October 29, 2017).
CIS’ Efforts Towards Greater Financial Disclosure by ICANN (Padma Venkataraman; October 29, 2017).

►Cyber Security

Participation in Event

CyFy 2017 (Organized by Observer Research Foundation; New Delhi; October 2 - 4, 2017). Sunil Abraham was a speaker.

►Privacy

Blog Entry

GDPR and India: A Comparative Analysis (Aditi Chaturvedi; October 17, 2017).

Participation in Event

Securing The Digital Payments Ecosystem (Organized by NITI Aayog; October 9, 2017).

►Big Data

Blog Entry

Revisiting Per Se vs Rule of Reason in Light of the Intel Conditional Rebate Case (Shruthi Anand; October 4, 2017).

Event Organized

Emerging Issues in the Internet of Things (CIS, Bengaluru; October 23, 2017). Andrew Rens gave a talk.

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Article

NPAs & Structural Issues (Shyam Ponappa; Business Standard; October 4, 2017).

Articles

Digital Native: There is no spoon, There is no privacy (Nishant Shah; October 9, 2017).
Digital Native: Finger on the buzzer (Nishant Shah; October 22, 2017).

-----------------------------------
About CIS
-----------------------------------

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For more details visit https://cis-india.org/about/newsletters/october-2017-newsletter

NPAs & Structural Issues

Shyam Ponappa — 2018-01-05T13:32:32Z

To fix one you need to fix the others.

The article was published in the Business Standard on October 4, 2017 and Organizing India Blogspot on October 5, 2017.

An aspect of financial services often overlooked is that they serve as second-order infrastructure, essential for commerce, industry, and daily living. A disruption in the financial sector slows everything by cutting productivity. Other reasons for decline, such as structural issues in power supply, telecom/broadband, and in farming, are accepted as part of the landscape. That is why devising corrective measures is not so simple. Setting aside political considerations, misattribution does not help in problem-solving. Resolution needs root causes to be identified and addressed.

Consider the example of the guillotine approach to non-performing assets (NPAs). Imagine if an inspection of water and sanitation in your locality were to result in the shutting off of the water supply because conditions are deemed unsanitary. There would be a scramble for sourcing water, while economic activity and productivity would tank. What if it were a metropolis, or the whole country?

This is what happened with the abrupt change in booking NPAs. From around 2.5 per cent between 2006 until 2011, they began to rise in 2012 (see Chart 1).

Public sector banks in particular responded to the government’s accommodative efforts after the 2008 crisis. As growth fell, NPAs rose, especially for long-gestation, regulation-dependent infrastructure loans. In 2015, the Reserve Bank of India (RBI) adopted a hard line as the economy was gaining momentum after slumping in 2014 to 6 per cent. Earlier, the RBI was faulted for allowing the ever-greening of loans. An abrupt change without a gradual coming to terms to manage cash flows resulted in a crisis.

Leaving aside malpractice/fraud, NPAs resulted from factors such as aggressive, unsustainable lending, regulatory delays, the domestic and global slowdown, and commodity price shocks, as when export duties were imposed in Australia and Indonesia on coal. Cash flows drive demand, and a weak economy can make or break a business.

Apart from crippling banking and financial services, the consequences of the NPA shock were enormous, especially for sectors such as iron and steel, construction, power, telecom, transport, and agriculture, with knock-on effects on MSMEs across sectors. Could a phased, more gradual, differentiated approach have yielded better results? Probably, just as when water supply fails, interim arrangements involving pipes, equipment and tankers have to be made to tide over the crisis. For stressed loans, the requirements were for a differentiated approach to the category of wrongdoing, including overreach, and support for stressed sectors undergoing a downturn. The need was and is to prevent disruption in cash flows from a systemic perspective, conserving employment and assets in untainted enterprises with the potential for recovery. This also retains momentum and market sentiment to the extent possible.

Ways Out?

NPAs in the mid-90s were outrageously high. Yet, what followed especially after 2003 was high growth until the global financial crisis of 2008. The NPAs were reduced and ceased to be a problem (see Chart 1). One explanation is that banks did significant NPA provisioning from profits in bond trading, as interest rates on 10-year government bonds fell 8.1 per cent from 1997 to 2003. A booming economy from 2003 did the rest, although there were no changes in the underlying causes that led to the NPAs. Hence, bond trading could be a way out provided interest rates fall, and so could economic growth.
Regarding interest rates, the dilemma is of high rates for domestic savings because people save with banks in India, and for foreign investors in bonds, against low rates for consumer demand and for capital investment. Given our acute need for growth and misaligned real interest rates, this needs rectification (see Chart 2).
There’s a need to insulate banking from political influence, while ensuring rigorous procedures for evaluation and monitoring. Any system can be gamed, however, and to work well, players need competence, integrity, and the freedom to exercise both. Banks are not well suited for funding long-gestation infrastructure because their deposits are more short-term. This is an institutional and market deficiency that needs to be bridged through developing bond markets, and channeling long-duration funding from pensions and insurance.
There are compounding effects from imposing the Aadhaar/UID without the requisite connectivity, processes and safeguards, likewise the hasty imposition of the goods and service tax (GST). There is little doubt of benefits when properly applied, but that needs time and support for thorough implementation; meanwhile, the immediate need is for relief. Rescue measures are needed to lighten the burden of the GST and its reporting requirements on MSMEs (up to a higher ceiling?) over a long period. Interim solutions could be flat rates for a larger set, augmented by support for implementation.
Meanwhile, structural issues resulting in NPAs need to be fixed. Three obvious areas:

Farming, with its large population, small holdings, outmoded practices, low productivity, and the issues around pricing. Pricing is an essential aspect, as are direct benefits, for example, subsidies through cash transfers depending on income. But simply increasing farm prices addresses only one aspect of a multifaceted problem. What’s needed is to change the way production and marketing are organised. Practicable strategies are needed for produce, perhaps like the approach in dairy farming for milk production and marketing. Systems need be designed (worked out) and implemented properly, with design elements to promote and safeguard honest, competent, disciplined behaviour.
Telecom and broadband services need policies based on a complete change of mindset and market structure, such as shared networks and equipment including spectrum, protection from anti-competitive action, and revenue sharing instead of auctions.
Electricity supply: Power generation and distribution are both stressed by low economic activity, while many states continue with lax practices of under-recoveries for electioneering.This cannot be resolved as long as profligacy and indiscipline continue.

For more details visit https://cis-india.org/telecom/blog/business-standard-shyam-ponappa-october-5-2017-npas-and-structural-issues