Centre for Internet and Society

CIS Comments on the Draft National Policy on Electronics

pranesh — 2011-11-01T00:05:32Z

These were the comments submitted by CIS to the request for comments put out by the Department of Information Technology on its draft 'National Policy on Electronics'.

The Department of Information Technology must be commended for taking the initiative to create this policy which aims to reduce India’s dependence on other countries for crucial electronic hardware requirements, and to increase Indian production to such a capacity as to not only serve India’s increasing demand for electronics, but to fulfil foreign demand as well.

We have mainly focused our comments on the implications of the patent regime on this laudable goal.

Technology Transfer

An area that the policy is silent on is technology transfer. In relation to technology, the main bargain embedded in the Trade-Related Intellectual Property Rights (TRIPS) Agreement of the WTO was the increase in the level of protection offered under patent laws of developing countries in exchange for increased transfer of technological know-how from the developed countries. While India has increased patent protection in accordance with the TRIPS Agreement, there has been no commensurate transfer of technology from countries which are currently hubs of electronics know-how.

One important example is China’s policy on transfer of technology along the whole value chain to enable domestic firms to gain technological expertise.

The Association of American Manufacturing notes, “One of the most potent weapons China has used to move up the value chain is forced technology transfer … It is only through the acquisition (rather than internal development) of sophisticated technologies that Chinese companies have been able to rapidly enter and expand in sophisticated industries ….”

This insistence on technology transfer as a national policy has served China well, and their experience should be incorporated into India’s National Policy on Electronics. This is not to say that India should not internally develop our own technological capabilities, but that the Indian government must use the policy space available to it to ensure that acquisition of technological capabilities happens alongside.

Outflow of Foreign Exchange as Royalties Creating Adverse Balance of Payments

The latest data from the World Bank shows that our balance of payments is increasing adversely at an alarming rate, and has now reached over USD 2.38 billion.

Our royalty and licence fee payments have kept on increasing at an astounding rate.

Table: India’s royalty and licence fees payments (current USD)

1991	2006	2007	2008	2009	2010
49,565,208	845,949,436	1,159,824,391	1,528,826,913	1,860,283,808	2,437,500,663

Meanwhile India’s income is gaining slowly and erratically, and in 20100 reached USD 59.6 million.

Table: India’s royalty and licence fees, receipts (current USD)

1991	2006	2007	2008	2009	2010
615,525	13,445,053	30,690,000	27,211,957	38,128,141	59,560,687

This bleeds the Indian economy through a very inefficient outflow of capital. Insisting on transfer of technology is an important component in slowing down this trend.

Linking of Value Chain and Preferential Treatment

One important clarification that is needed in the policy (specifically clause IV.1.3) is that “domestically manufactured electronic products” is intended to mean not those products for which the last part of value has been added in India. This way essentially non-Indian products with Indian branding can be seen to be “domestically manufactured electronic products”. The longer the Indian part of the value chain, the more preference it should be given, and holding by Indian companies of essential patent rights (or the availability of greater number of components of the product under royalty-free, FRAND and RAND licences) could be an important criteria. This will also encourage the transfer of technological know-how to Indian firms.

Preferential Treatment

Some may argue that the provision of preferential treatment to domestic manufacturers contravenes the GATT Agreement, however the GATT Agreement itself provides a usable exception in Article 3(8):

Article III: National Treatment on Internal Taxation and Regulation

8 (a) The provisions of this Article shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale.

(b) The provisions of this Article shall not prevent the payment of subsidies exclusively to domestic producers, including payments to domestic producers derived from the proceeds of internal taxes or charges applied consistently with the provisions of this Article and subsidies effected through governmental purchases of domestic products.

Thus, by crafting any further regulation under this policy to fit within this exception, India would not fall afoul of its obligations under GATT.

Cybersecurity and Source Code

An important aspect of the cybersecurity that is discussed in clause IV.5 is the ability to validate the lack of malicious code in the electronics used in strategically important infrastructure. For this, manufacturers must be required to provide the source code as part of government tenders in strategically important infrastructure.

Distinction between Innovation and Intellectual Property

The Electronic Development Fund must seek to promote innovation, research and development, and commercialization of products, and must be used to strategically acquire patents. Promotion of patents is not an end in itself, unlike promotion of innovation and ensuring that research and development reaches markets through commercialization. Patents are only a means to an end, and may sometimes be strategically useful, and often stand in way of gaining optimal use of technology by markets due to their monopolistic nature. Thus, it is recommended that “promotion of IP” be dropped from this clause, and instead “promotion of strategic acquirement and use of patents” be substituted in its place.

National Electronics Mission

The National Electronics Mission should not only have industry participation but also participation from academia and civil society.

Funding

The issue of funding for the initiatives outlined in this policy must be addressed as well.

For more details visit https://cis-india.org/internet-governance/comments-draft-national-policy-on-electronics

CIS comments on WIPO Treaty

nirmita — 2013-01-28T11:16:44Z

Nirmita Narasimhan of CIS has given her reply comments to the US Copyright Office's call for comments on the proposed WIPO draft proposal to facilitate access to copyrighted works for persons who are blind or have other reading disabilities, in response to the Federal Register Notice of October 13, 2009.

The US Government had called for comments on the proposed WIPO treaty for the visually impaired shortly before the 19th SCCR to which organisations responded from different parts of the world. CIS' comments on the Treaty were also filed with the US Government and are available on their website at http://www.copyright.gov/docs/sccr/comments/2009/reply-2/

SCCR 19: CIS got the status of an accredited civil society in the recent SCCR held at Geneva from 14th-18th of December and had an opportunity to make statements on two of the issues which were being discussed there, namely on the Treaty for the blind, visually impaired and other reading disabled, proposed by Brazil, Ecuador and Paraguay.

Further, for submissions to the DG, WIPO by the visually impaired in India, click on http://www.visionip.org.

For more details visit https://cis-india.org/accessibility/blog/CIS-Comments-on-Treaty

Note on the Authorities under the Working Draft of Persons with Disabilities Act, 2011 (9th February 2011)

praskrishna — 2011-08-24T05:42:13Z

The Ministry of Social Justice and Empowerment (MSJE) released a revised draft of the Rights of Persons with Disabilities Act which is up for comments on the MSJE website. The Centre for Law and Policy Research, Inclusive Planet and the Centre for Internet and Society jointly submitted a note on the section on statutory authorities.

This Note is on the Working Draft of Persons with Disabilities Act, 2011 (Hereinafter "The PWD Act, 2011") which was released on 9th February, 2011[1] to specifically review the authorities established under the PWD Act, 2011, the powers and functions assigned to the authorities and the effect of the establishment of these authorities.

The Disability Rights Authority
Vague provisions

The main functions of the DRA are to formulate rules, regulations, guidelines, schemes and other activities. Under section 29 (I), the DRA also has the power to monitor enforcment of the Act and to protect the rights of persons with disabilities and to suo moto address violations of rights of perosns with disabilities. In this regard, the provisions of the Act are vague. There are no provisions to indicate what penalties the DRA may impose in the event of any violation of the provisions of the PWD Act 2011. Wide powers are given to the DRA with regard to promotion, protection, monitoring and even enforcement of rights under the Act. However it is not clear as to how exactly these functions, especially the monitoring and enforcement of rights should be performed.

Powers of review and advice

Under Section 29J, the DRA has the power to review and advise the government to take measures with regard to laws that discriminate against persons with disability. This power will affect the functioning of the authorities under the other disability legislations such as the Mental Health Act,1987 and the National Trusts Act, 1999 as these legislations will be considered to be discriminatory on the issue of legal capacity. Therefore these other disability legislations need to be amended before the DRA can act on its review and advice powers.

Further, in many of the provisions of the Act, there is a mention of a 'designated authority' to perform certain functions without specifying what the designated authority is or who designates the authority. It is unclear as to whether the 'designated authority' refers to a new authority to be established under the Act or it refers to the DRA.
The Disability Courts

Multiplicity of Fora for grievance redressal

There is no clarity on the intended structure of the courts at different levels. The word “Court” is not defined anywhere under the Act, which is a great lacuna. There are several different for a provided for grievance redressal under the Act – the DRA, the Court of the National Disability Commissioner, the State Disability Courts and the Grievance Redressal Officer in each establishment. It is not clear as to whether these authorities under the Act have concurrent power or whether a person has to approach one authority and seek remedy before going to another. Over and above these courts and fora, the regular civil courts, family courts, High Courts would also have jurisdiction. It is not clear as to whether the jurisdiction of all other courts is ousted by the Act in setting up the special State Disability Courts and the Court of the National Disability Commissioner.

Section 6(7) and (8) empower “a court or the disability court” to make suitable orders on finding the occurrence of discrimination. These Sections merely mention a ‘court’ without specifying which court is referred to as there is no definition of ‘court’ under the Act. There is also no provision under the Act which allows a person to approach any other ordinary court for reliefs under the Act. Therefore it is not clear as to what this Section refers to when it uses the word ‘court’.
The Court of the National Disability Commissioner

Under Section 29S (2), the Act allows a person to directly approach the National Disability Commissioner only if the person is aggrieved of “discrimination” under the Act and not for other cases of violation. On the other hand, under section 29S (1) (c ) the Court of the National Disability Commissioner has the power to suo moto address all infringment of rights. There is a great contradiction therefore in the jurisdiction of the Court of the National Disability Commissioner.

Further, although there is an entire part of the Act which is dedicated to the imposition of penalties and sanctions, there are no provisions for the National Disability Commissioner to impose any penalties and sanctions.

The National Disability Commissioner acts as the appellate authority on the orders of the DRA. But there is no provision to appeal from the orders of the State Disability Court.
The State Disability Courts

The State Disability Courts have a wider jurisdiction that the National Disability Commissioner in that a person can approach the State Disability Courts complaining of violation of any rights under the Act.
Even in case of the State Disability Court there is no specific provision that allows the court to impose penalties and sanctions detailed under the Act.

Conclusion

The PWD Act, 2011 has made some changes from its earlier draft in December 2010. With regard to the authorities established under the Act, there are many inconsistencies which need to be resolved before the Act can come into force. The powers and the functions of all the authorities need to be clearly demarcated. Further, the empowering provisions should be linked to the provisions which prescribe the procedure through which the powers can be exercised. Provisions imposing penalties and sanctions should be linked to the authorities which have the power to impose the same. There are several authorities which all have power to look into violations of the Act, which can confuse a person seeking remedies under the Act. Unless these issues are addressed, the PWD, Act 2011 would cause major practical problems at the stage of implementing the rights recognised under the Act.

[1]See Working Draft of the Rights of Persons with Disabilities Act, 2011, available at http://socialjustice.nic.in/pdf/workdraftdd.pdf (Last visited on 21-02-2011)

For more details visit https://cis-india.org/accessibility/blog/rights-of-persons-with-disabilities

Feedback to the NIA Bill

elonnai — 2012-03-21T10:14:27Z

Malavika Jayaram and Elonnai Hickok introduce the formal submission of CIS to the proposed National Identification Authority of India (NIA) Bill, 2010, which would give every resident a unique identity. The submissions contain the detailed comments on the draft bill and the high level summary of concerns with the NIA Bill submitted to the UIDAI on 13 July, 2010.

The UID draft bill is a proposed legislation that authorizes the creation of a centralized database of unique identification numbers that will be issued to every resident of India. The purpose of such a database is characterized as ensuring that every resident is provided services and benefits. The UID project was first set up and introduced to the public in February 2009 by the planning committee. In June 2010, a draft bill was proposed which attracted public debates and opinions for over two weeks. Currently the bill is being considered by Parliament in the winter session (July-August 2010). If the Parliament of India approves the bill, it may be enacted during Winter 2010.

CIS has closely followed the UID project and reviewed the bill right from the time when it was first issued. and has worked to initiate and contribute to a public debate including attending of workshops in Delhi on 6 May, 2010 and in Bangalore on 16 May, 2010.

We respect the fact that civil society has many voices. That said, in our criticisms, suggestions, and analysis of the UID draft bill, we are asking for a simple, well-defined document, the language and structure of which expressly precludes abuse of a centralized identification database. The document should provide solely for its stated purpose of enabling the provision of benefits to the poor. Along with this mandate we believe the document should give clear rights of choice, control, and privacy to the Aadhaar number holder. Below is a summary of our general comments with citations to specific sections of the draft bill. A detailed section by section critique is attached along with our high level summary of concerns. The compilation and synthesis of detailed critiques was done by Malavika Jayaram.

Summary of High Concerns

Clarity of Definition and Purpose

Most importantly we find that in order to adhere to the stated purpose of the bill there is a need to limit and better define language in the relevant sections of the bill. This includes the powers and purpose of the Authority and the overarching scheme of the bill. We are concerned that the over-breadth and generality of the language will open up the opportunity for more information to be collected than originally stated. Further, definition will act to prevent uncontrolled or unwanted change in the project’s scope, and will clearly limit the usage of the Aadhaar numbers to the facilitation of the delivery of social welfare programs.

For the bill to be in line with its original purpose of reaching out to the poor, we also believe the issue of fees must be addressed. We find that there is an inadequate definition in the bill of what fees shall be applied for authentication of Aadhaar numbers. Also we find that it is incompatible with the bill’s stated purpose to require an individual to pay to be authenticated. The bill should provide that no charges will be levied for authentication by registrars and other service providers for certain categories of Aadhaar number holders (BPL, disabled, etc.), and that charges will be limited/capped in other cases. This will bring the bill in line with the statement in Chapter II 3 (1) “Every resident shall be entitled to obtain an Aadhaar number on providing his demographic information and biometric information to the Authority in such a manner as may be specified by regulations” and Chapter 3 (10 ) “The Authority shall take special measures to issue Aadhaar numbers to women, children, senior citizens, persons with disability, migrant unskilled and unorganized workers, nomadic tribes or such other persons who do not have any permanent dwelling house and such other categories of individuals as may be specified by regulations. If a fee must be permitted, a cap/safeguard should be put in place to ensure that the fee does not become a mechanism of abuse.

Protection of the Citizen

The bill should ensure the protection of citizens’ rights to privacy and freedom of choice. To do this it is important that the bill is voluntary, allows for the protection of anonymity, and is clear on how data will be collected, stored and deleted. Measures should be taken towards ensuring that the Aadhaar number is truly voluntary. Accordingly, a prohibition against the denial of goods, services, entitlements and benefits (private or public) for lack of a UID number – provided that an individual furnishes equivalent ID is necessary. The bill should also spell out the situations in which anonymity will be preserved and/or an Aadhaar number should not be requested such as a person’s sexuality/sexual orientation and marital status/history. Furthermore, the bill should require the Authority, registrars, enrolling agencies and service providers to delete/anonymize/obfuscate transaction data according to defined principles after appropriate periods of time in order to protect the privacy of citizens.

Motivations of the UID Bill

Since the submission of the high level summary, we note that a list of 221 agencies empanelled by the UIDAI has been uploaded onto the website (by a memo dated 15 July, 2010). A swift reading reveals that most of the agencies who are going to help enroll people into the UIDAI system are not NGOs, CSOs or other welfare oriented not-for-profit entities; rather, they are largely IT companies and commercial enterprises. This begs the question as to whether the UID scheme/Aadhaar is truly geared towards delivery of benefits and inclusivity of the poor and marginalized. Already concerns have been voiced that the “ecosystem” of registrars and enrolling agencies contemplated by the scheme, to the extent that it envisages a public-private partnership, could firstly, be “hijacked” or “captured” by commercial motives and result in sharing of data, security breaches, compromised identities, loss of privacy, data mining and customer profiling, and secondly, end up neglecting the very sections of society that the scheme allegedly most wants to help. The list of empanelled companies makes this even more likely and imminent a concern. Without casting aspersions on any of those entities, we would like to highlight that this sort of delegated structure raises several concerns.

Additionally, we find the speed and efficiency with which the UIDAI juggernaut is signing MoUs with states, banks and government agencies on the one hand, and issuing tenders, RFPs, RFQs and otherwise seeking proposals and awarding contracts to private entities – in the absence of any Parliament-sanctioned law (the bill is still a draft, and yet to even be placed before the Parliament) to be alarming. Along with news of the increasing costs of the project and doubts about how foolproof the technology will be, it is staggering to imagine that something that raises so many concerns is being pushed through without a more serious debate. The lack of formal procedures and open debates makes one wonder how democratic the actual process is.

Conclusion

To conclude, CIS believes that the UID bill threatens the rights of citizens in India, and appeals to the citizen to think critically of its implications and consequences.

1. Detailed Summary pdf (159kb)

2. High Level Summary (77kb)

For more details visit https://cis-india.org/internet-governance/blog/cis-feedback-to-nia-bill

Response to TRAI Consultation paper No. 6/2009

radha — 2011-08-24T08:06:46Z

CIS Distinguished Fellow, Shyam Ponappa, provides a detailed response to the Telecom Regulatory Authority of India's Consultation paper No. 6/2009 "Overall Spectrum Management and review of license terms and conditions". Shyam Ponappa is suggesting that, the TRAI approach the telecom policy in a manner which will facilitate greater user access and, more generally, be designed to serve the public interest in the long-term.

Shyam Ponappa November 12, 2009
Distinguished Fellow
Centre for Internet & Society
Bangalore/New Delhi
cis-india.org

shyamponappa@gmail.com

Telecom Regulatory Authority of India
Attn: Sh. Sudhir Gupta, Advisor (MN)
Mahanagar Doorsanchar Bhawan
Jawahar Lal Nehru Marg, New Delhi-110 002
Tel. No.011-23220018 , Fax No.011-23212014

E-mail : advmn@trai.gov.in

TRAI Consultation paper No. 6/2009- October 16, 2009

"Overall Spectrum Management and review of license terms and conditions"

Sir,

It would help to have a logical framework that defines overall objectives, prioritizes issues, and structures and organizes issues and questions. This would facilitate analysis and response, as we have attempted below.

We begin by responding to Question 57 as a preamble to all the questions:

57. What in your opinion is the desired structure for efficient management of spectrum?
[This question addresses only one of two essential criteria, efficiency. The other criterion is effectiveness; both need equal emphasis.]

Please see separate attachment for answers to Questions 1-56.

Status

Currently, communications services in India comprising Internet, voice and SMS have the following attributes:

Low broadband usage, with relatively high prices: eg, direct satellite TV subscriptions at Rs. 200/month, compared with 512 kbps Internet at Rs. 1,000/month.
Fragmented spectrum allocation for exclusive use by each operator in a service area.
Very high intensity of spectrum use by operators compared with international norms because of constrained availability.
Too many operators per service area (11-14 or more [15-16 with all potential operators with GSM and CDMA counted separately], versus the global average of 4-5).

[For details on (2), (3) and (4), please see: 'An assessment of spectrum management policy in India', David Lewin, Val Jervis, Chris Davis, Ken Pearson, Plum Consulting, December 2008
http://www.plumconsulting.co.uk/pdfs/GSMA%20spectrum%20management%20policy%20in%20India.pdf]

Needs

Our needs are:

good services for Internet, voice and SMS,
at reasonable prices, eg, comparable pricing for TV and broadband,
accessible from/to most households across the country.

The need is especially great in rural areas, as broadband can be the medium for delivery of essential services like education (from basic to advanced to vocational training and Continuing Education at all levels, including high-level professional CE), health (again, from basic diagnostics and monitoring at home, to advanced care at adequately equipped centres), and security and law-and-order services at significantly higher levels than is possible without excellent communications infrastructure.

In view of the above, we suggest that the Government of India consider adopting the following policy goals in the public interest ( and therefore, that where appropriate, the TRAI set these objectives/make appropriate recommendations to the GOI).

Suggested Policy Goals/Objectives [based on needs]

Adopt the criteria of long-term net benefits in the public interest for decisions, eschewing short-term cash collections from auctions and fees.
An approach to policies for telecommunications services (not for broadcasting) that limits the number of operators per service area in line with international experience, because of the economics of networks.
[This implies an explicit reversal of prior policies to maximize competition, and requires allowing for consolidation through mergers and acquisitions.]
Access to broadband (to be defined as at least 512 kbps in keeping with international norms) at all feasible locations in the country for all users.
Develop incentives and penalties favouring good rural service provision, with the emphasis on broadband: an Administered Incentive Pricing mechanism.
Explore ways to structure policies to reduce costs/maximize utility through facilities and resource sharing, so that prices can be reduced while maintaining good scope for investment from growth and profits.

This implies two areas of exploration:
a) Shared use of facilities and equipment/networks;
b) Shared use of spectrum.

(i) This is best done by collaborative consultations between experts (from the GOI, private sector and academia), operators, equipment providers, and government. Without the requisite interdisciplinary skills combined with operating expertise and investment capability, the effort is too complex for an iterative, serial consultation process.
(ii) Even within the GOI, this requires interdisciplinary and cross-jurisdictional convergence, both to develop solutions as well as to implement them.
(iii) This also needs GOI initiatives to invite companies like Ericsson, Nokia, Motorola and Qualcomm as well as Google and Intel, possibly cable companies like Liberty Global, and electricity companies that deliver Internet through their networks.
(iv) The GOI also needs to depute experienced representatives from various ministries and departments including the WPC, the Defence Services, and specialist agencies such as the DRDO/NTRO.
[Please see ‘Managing Spectrum’ in the Business Standard November 5, 2009, and related references: http://organizing-india.blogspot.com/2009/11/managing-spectrum.html]
Monitor operations online and intervene actively where revenues (the totality of rates/tariffs) are far above total costs, i.e., profits are unreasonable. This is a necessary adjunct to accepting a monopolistic/oligopolistic market structures.

Suggested Approach

The use of a decision tree as in the ‘Issue Map for Spectrum & Broadband’ below (please see Exhibit) facilitates a logical sequence and prioritization in exploring alternatives. (Please note that this is for broadband, voice and SMS, and not for broadcasting.) A similar exploration process for networks and facilities (sharing versus exclusive use for delivery) could follow. However, stakeholders should be free to use any analytical process to improve on this in the common interest.

Once decisions are taken on these two issues (spectrum and network/ facilities sharing), other issues like pricing and consolidation can be logically addressed based on these decisions, probably within the scope of existing laws and regulations.

New regulations or laws should be considered only after comprehensive analysis on the lines of Project LARGE (Legal Adjustments and Reforms for Globalising the Economy by Sh. Bibek Debroy).

Exhibit: Issue Map on Spectrum & Broadband

Shyam Ponappa
Centre for Internet & Society
cis-india.org

Attachment – Question 1-57

TRAI Consultation paper No. 6/2009 – October 16, 2009

Overall Spectrum Management and review of license terms and conditions

Chapter 1
Spectrum requirement and availability

Do you agree with the subscriber base projections? If not, please provide the reasons for disagreement and your projection estimates along with their basis?
Do not disagree.
Do you agree with the spectrum requirement projected in ¶ 1.7 to ¶1.12? Please give your assessment (service-area wise).
Agree if exclusive bands of spectrum are used by different operators, and the spectrum requirement is linked to subscribers. Disagree if common use of spectrum is adopted. Please see preamble (reply to Question 57) for details of shared/pooled spectrum approach.
How can the spectrum required for Telecommunication purposes and currently available with the Government agencies be re-farmed?
(a) By rationalizing usage, as advocated in the preamble for commercial operators, by pooling spectrum for common use where possible.
(b) By inducting equipment that allows more efficient usage and usage of other bands.
In view of the policy of technology and service neutrality licences, should any restriction be placed on these bands (800,900 and 1800 MHz) for providing a specific service and secondly, after the expiry of present licences, how will the spectrum in the 800/900 MHz band be assigned to the operators?
(a) Please see suggestions on shared/pooled spectrum as above.
(b) In the event that common use of spectrum is infeasible/not accepted by the Government of India, and exclusive bands of spectrum are assigned to operators as is the practice now, work out ways to consolidate fragmented bands (other than through M&A) for operators, to enable operators to hold contiguous bands for greater efficiency, and explore shared use of pooled spectrum.
How and when should spectrum in 700 MHz band be allocated between competitive services?
Preferred method: for common use (can be pooled or shared even if assigned for exclusive use, immediately).
What is the impact of digital dividend on 3G and BWA?
Should extend its reach and access because of lower costs.

Chapter 2
Licensing Issues
Should the spectrum be delinked from the UAS Licence? Please provide the reasons for your response.
If spectrum is treated as a common resource, the logical requirement is for a linkage that is not dependent on ownership, but to access for service delivery, i.e., common access.
In case it is decided not to delink spectrum from UAS license, then should there be a limit on minimum and maximum number of access service providers in a service area? If yes, what should be the number of operators?
Follow global practice: do not exceed five operators in any service area unless there are compelling reasons to do so.
What should be the considerations to determine maximum spectrum per entity?
Minimum contiguous band for effective rollout and efficient delivery, i.e., inexpensive capital outlay for equipment and towers/network while maintaining Quality of Service.
Is there a need to put a limit on the maximum spectrum one licensee can hold? If yes, then what should be the limit? Should operators having more than the maximum limit, if determined, be assigned any more spectrum?
This depends on the overall approach to spectrum management, i.e., common use, or exclusive use. The logic for a limit is effective delivery capability at ‘normal’ cost. There is no logic for assigning more than this. However, if spectrum is for common/shared use, the only criterion is throughput/capacity.
If an existing licensee has more spectrum than the specified limit, then how should this spectrum be treated? Should such spectrum be taken back or should it be subjected to higher charging regime?
As in No. 10. If common/shared spectrum use is adopted, there needs to be a transition worked out, as in the transition to revenue sharing.
In the event fresh licences are to be granted, what should be the Entry fee for the license?
The principles followed should be:
(a) Low license fees to minimize access costs.
(b) Provided licenses are delinked from spectrum and few in number, there need to be strict rollout requirements.
(c) Incentives for broadband and rural coverage in the form of a structured Administrative Incentive Pricing mechanism.
(d) Penalties for failure.
In case it is decided that the spectrum is to be delinked from the license then what should be the entry fee for such a Licence and should there be any roll out condition?
As in No. 12.
Is there a need to do spectrum audit? If it is found in the audit that an operator is not using the spectrum efficiently what is the suggested course of action? Can penalties be imposed?
(a) Operating attributes should be monitored online on a continuous basis.
(b) Spectrum use probably needs to be monitored as an operating attribute.
(c) Penalties and incentives are needed, including forfeiture for continued transgression.
Can spectrum be assigned based on metro, urban and rural areas separately? If yes, what issues do you foresee in this method?
This needs to be considered only if common/pooled usage is decided against. With common use or sufficiently large blocks/bands of spectrum, no problems are likely to arise.
Since the amount of spectrum and the investment required for its utilisation in metro and large cities is higher than in rural areas, can asymmetric pricing of telecom services be a feasible proposition?
Yes.

M&A issues
If the common/shared use approach is adopted, M&A can be under existing laws and regulations.
Whether the existing licence conditions and guidelines related to M&A restrict consolidation in the telecom sector? If yes, what should be the alternative framework for M&A in the telecom sector?
Whether lock-in clause in UASL agreement is a barrier to consolidation in telecom sector? If yes, what modifications may be considered in the clause to facilitate consolidation?
Whether market share in terms of subscriber base/AGR should continue to regulate M&A activity in addition to the restriction on spectrum holding?
Whether there should be a transfer charge on spectrum upon merger and acquisition? If yes, whether such charges should be same in case of M&A/transfer/sharing of spectrum?
Whether the transfer charges should be one-time only for first such M&A or should they be levied each time an M&A takes place?
Whether transfer charges should be levied on the lesser or higher of the 2G spectrum holdings of the merging entities?
Whether the spectrum held consequent upon M&A be subjected to a maximum limit?

Spectrum Trading
Is spectrum trading required to encourage spectrum consolidation and improve spectrum utilization efficiency?

At present, trading is required to allow consolidation. However, if a comprehensive approach is taken to spectrum use, and especially if common use through common access is established, this set of problems will no longer exist after a transition period. Nor will there be any shortage of spectrum.
Who all should be permitted to trade the spectrum ?
As in No. 24.
Should the original allottee who has failed to fulfill “Roll out obligations” be allowed to do spectrum trading?
There should be penalties and forfeiture for failure to meet rollout obligations, and clawbacks as an interim measure during the transition.
Should transfer charges be levied in case of spectrum trading?
What should be the parameters and methodology to determine first time spectrum transfer charges payable to Government for trading of the spectrum? How should these charges be determined year after year?
Should such capping be limited to 2G spectrum only or consider other bands of spectrum also? Give your suggestions with justification.

This question assumes there is a difference in “2G spectrum” and other spectrum, which is incorrect. The difference is in equipment that has evolved in different phases along different bands. Spectrum should be treated as technology-neutral for the purposes of service delivery. Any service should be deliverable on any band, subject to interference limitations.
Should size of minimum tradable block of spectrum be defined or left to the market forces?
Should the cost of spectrum trading be more than the spectrum assignment cost?

Spectrum sharing

These questions are addressed in the preamble in the cover note.
Should Spectrum sharing be allowed? If yes, what should be the regulatory framework for allowing spectrum sharing among the service providers?
What should be criteria to permit spectrum sharing?
Should spectrum sharing charges be regulated? If yes then what parameters should be considered to derive spectrum sharing charges? Should such charges be prescribed per MHz or for total allocated spectrum to the entity in LSA?
Should there be any preconditions that rollout obligation be fulfilled by one or both service provider before allowing the sharing of spectrum?
In case of spectrum sharing, who will have the rollout obligations? Giver or receiver?

Perpetuity of licences
Should there be a time limit on licence or should it be perpetual?
What should be the validity period of assigned spectrum in case it is delinked from the licence? 20 years, as it exists, or any other period
What should be the validity period of spectrum if spectrum is allocated for a different technology under the same license midway during the life of the license?
If the spectrum assignment is for a defined period, then for what period and at what price should the extension of assigned spectrum be done?
If the spectrum assignment is for a defined period, then after the expiry of the period should the same holder/licensee be given the first priority?

Uniform License Fee
What are the advantages and disadvantages of a uniform license fee?
Whether there should be a uniform License Fee across all telecom licenses and service areas including services covered under registrations?
If introduced, what should be the rate of uniform License Fee?

License fees should be treated as part of the overall scheme of Administered Incentive Pricing.

Chapter 3
Spectrum assignment
If the initial spectrum is de-linked from the licence, then what should be the method for subsequent assignment?
Please see comments on common/shared use in the preamble in the cover note.
If the initial spectrum continues to be linked with licence then is there any need to change from SLC based assignment?
The SLC basis for spectrum assignment gives rise to many distortions and is not in line with international practices.
In case a two-tier mechanism is adopted, then what should be the alternate method and the threshold beyond which it will be implemented?
Should the spectrum be assigned in tranches of 1 MHz for GSM technology? What is the optimum tranche for assignment?
In case a market based mechanism (i.e. auction) is decided to be adopted, would there be the issue of level playing field amongst licensees who have different amount of spectrum holding? How should this be addressed?
In case continuation of SLC criteria is considered appropriate then, what should be the subscriber numbers for assignment of additional spectrum?
In your opinion, what should be the method of assigning spectrum in bands other than 800, 900 and 1800 MHz for use other than commercial?

Spectrum pricing
Should the service providers having spectrum above the committed threshold be charged a one time charge for the additional spectrum?
In case it is decided to levy one time charge beyond a certain amount then what in your opinion should be the date from which the charge should be calculated and why?
On what basis, this upfront charge be decided? Should it be benchmarked to the auction price of 3G spectrum or some other benchmark?
Should the annual spectrum charges be uniform irrespective of quantum of spectrum and technology?
Should there be regular review of spectrum charges? If so, at what interval and what should be the methodology?

Structure for spectrum management
What in your opinion is the desired structure for efficient management of spectrum?

Please see the preamble in the cover note.

Shyam Ponappa
Centre for Internet & Society
cis-india.org

November 12, 2009

For more details visit https://cis-india.org/telecom/blog/response-to-trai-consultation-paper

CIS Submission to TRAI Consultation on Free Data

pranesh — 2016-07-01T16:04:27Z

The Telecom Regulatory Authority of India (TRAI) held a consultation on Free Data, for which CIS sent in the following comments.

The Telecom Regulatory Authority of India (TRAI) asked for public comments on free data. Below are the comments that CIS submitted to the four questions that it posed.

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

Is There a Need for Free Data?

No, there is no need for free data, just as there is no need for telephony or Internet. However, making provisions for free data would increase the amount of innovation in the Internet and telecom sector, and there is a good probability that it would lead to faster adoption of the Internet, and thus be beneficial in terms of commerce, freedom of expression, freedom of association, and many other ways.

Thus the question that a telecom regulator should ask is not whether there is a need for TSP agnostic platforms, but whether such platforms are harmful for competition, for consumers, and for innovation. The telecom regulator ought not undertake regulation unless there is evidence to show that harm has been caused or that harm is likely to be caused. In short, TRAI should not follow the precautionary principle, since the telecom and Internet sectors are greatly divergent from environmental protection: the burden of proof for showing that something ought to be prohibited ought to be on those calling for prohibition.

Goal: Regulating Gatekeeping

TRAI wouldn’t need to regulate price discrimination or Net neutrality if ISPs were not “gatekeepers” for last-mile access. “Gatekeeping” occurs when a single entity establishes itself as an exclusive route to reach a large number of people and businesses or, in network terms, nodes. It is not possible for Internet services to reach their end customers without passing through ISPs (generally telecom networks). The situation is very different in the middle-mile and for backhaul. Even though anti-competitive terms may exist in the middle-mile, especially given the opacity of terms in “transit agreements”, a packet is usually able to travel through multiple routes if one route is too expensive (even if that is not the shortest network path, and is thus inefficient in a way). However, this multiplicity of routes is generally not possible in the last mile.¹ This leaves last mile telecom operators (ISPs) in a position to unfairly discriminate between different Internet services or destinations or applications, while harming consumer choice.

However, the aim of regulation by TRAI cannot be to prevent gatekeeping, since that is not possible as long as there are a limited number of ISPs. For instance, even by the very act of charging money for access to the Internet, ISPs are guilty of “gatekeeping” since they are controlling who can and cannot access an Internet service that way. Instead, the aim of regulation by TRAI should be to “regulate gatekeepers to ensure they do not use their gatekeeping power to unjustly discriminate between similarly situated persons, content or traffic”, as we proposed in our submission to TRAI (on OTTs) last year.

Models for Free Data

There are multiple models possible for free data, none of which TRAI should prohibit unless it would enable OTTs to abuse their gatekeeping powers.

Government Incentives For Non-Differentiated Free Data

The government may opt to require all ISPs to provide free Internet to all at a minimum QoS in exchange for exemption from paying part of their USO contributions, or the government may pay ISPs for such access using their USO contributions.

TRAI should recommend to DoT that it set up a committee to study the feasibility of this model.

ISP subsidies

ISP subsidies of Internet access only make economic sense for the ISP under the following ‘Goldilocks’ condition is met: the experience with the subsidised service is ‘good enough’ for the consumers to want to continue to use such services, but ‘bad enough’ for a large number of them to want to move to unsubsidised, paid access.

Providing free Internet to all at a low speed.
1. This naturally discriminates against services and applications such as video streaming, but does not technically bar access to them.
Providing free access to the Internet with other restrictions on quality that aren’t discriminatory with respect to content, services, or applications.

Rewards model

A TSP-agnostic rewards platform will only come within the scope of TRAI regulation if the platform has some form of agreement with the TSPs, even if it is collectively. If the rewards platform doesn’t have any agreement with any TSP, then TRAI does not have the power to regulate it. However, if the rewards platform has an agreement with any TSP, it is unclear whether it would be allowed under the Differential Data Tariff Regulation, since the clause 3(2) read with paragraph 30 of the Explanatory Memorandum might disallow such an agreement.

Assuming for the sake of argument that platforms with such agreements are not disallowed, such platforms can engage in either post-purchase credits or pre-purchase credits, or both. In other words, it could be a situation where a person has to purchase a data pack, engage in some activity relating to the platform (answer surveys, use particular apps, etc.) and thereupon get credit of some form transferred to one’s SIM, or it could be a situation where even without purchasing a data pack, a consumer can earn credits and thereupon use those credits towards data.

The former kind of rewards platform is not as useful when it comes to encouraging people to use the Internet, since only those who already see worth in using in the Internet (and can afford it) will purchase a data pack in the first place. The second form, on the other hand is quite useful, and could be encouraged. However, this second model is not as easily workable, economically, for fixed line connections, since there is a higher initial investment involved.

Recharge API

A recharge API could be fashioned in one of two ways: (1) via the operating system on the phone, allowing a TSP or third parties (whether OTTs or other intermediaries) to transfer credit to the SIM card on the phone which have been bought wholesale. Another model could be that of all TSPs providing a recharge API for the use of third parties. Only the second model is likely to result in a “toll-free” experience since in the first model, like in the case of a rewards platform that requires up-front purchase of data packs, there has to be a investment made first before that amount is recouped. This is likely to hamper the utility of such a model.

Further, in the first case, TRAI would probably not have the powers to regulate such transactions, as there would be no need for any involvement by the TSP. If anti-competitive agreements or abuse of dominant position seems to be taking place, it would be up to the Competition Commission of India to investigate.

However, the second model would have to be overseen by TRAI to ensure that the recharge APIs don’t impose additional costs on OTTs, or unduly harm competition and innovation. For instance, there ought to be an open specification for such an API, which all the TSPs should use in order to reduce the costs on OTTs. Further, there should be no exclusivity, and no preferential treatment provided for the TSPs sister concerns or partners.

“0.example” sites

Other forms of free data, for instance by TSPs choosing not to charge for low-bandwidth traffic should be allowed, as long as it is not discriminatory, nor does it impose increased barriers to entry for OTTs. For instance, if a website self-certifies that it is low-bandwidth and optimized for Internet-enabled feature phones and uses 0.example.tld to signal this (just as wap.* were used in for WAP sites and m.* are used for mobile-optimized versions of many sites), then there is no reason why TSPs should be prohibited from not charging for the data consumed by such websites, as long as the TSP does so uniformly without discrimination. In such cases, the TSP is not harming competition, harming consumers, nor abusing its gatekeeping powers.

OTT-agnostic free data

If a TSP decides not to charge for specific forms of traffic (for example, video, or for locally-peered traffic) regardless of the Internet service from which that traffic emanates, as as long as it does so with the end customer’s consent, then there is no question of the TSP harming competition, harming consumers, nor abusing its gatekeeping powers. There is no reason such schemes should be prohibited by TRAI unless they distort markets and harm innovation.

Unified marketplace

One other way to do what is proposed as the “recharge API” model is to create a highly-regulated market where the gatekeeping powers of the ISP are diminished, and the ISP’s ability to leverage its exclusive access over its customers are curtailed. A comparison may be drawn here to the rules that are often set by standard-setting bodies where patents are involved: given that these patents are essential inputs, access to them must be allowed through fair, reasonable, and non-discriminatory licences. Access to the Internet and common carriers like telecom networks, being even more important (since alternatives exist to particular standards, but not to the Internet itself), must be placed at an even higher pedestal and thus even stricter regulation to ensure fair competition.

A marketplace of this sort would impose some regulatory burdens on TRAI and place burdens on innovations by the ISPs, but a regulated marketplace harms ISP innovation less than not allowing a market at all.

At a minimum, such a marketplace must ensure non-exclusivity, non-discrimination, and transparency. Thus, at a minimum, a telecom provider cannot discriminate between any OTTs who want similar access to zero-rating. Further, a telecom provider cannot prevent any OTT from zero-rating with any other telecom provider. To ensure that telecom providers are actually following this stipulation, transparency is needed, as a minimum.

Transparency can take one of two forms: transparency to the regulator alone and transparency to the public. Transparency to the regulator alone would enable OTTs and ISPs to keep the terms of their commercial transactions secret from their competitors, but enable the regulator, upon request, to ensure that this doesn’t lead to anti-competitive practices. This model would increase the burden on the regulator, but would be more palatable to OTTs and ISPs, and more comparable to the wholesale data market where the terms of such agreements are strictly-guarded commercial secrets. On the other hand, requiring transparency to the public would reduce the burden on the regulator, despite coming at a cost of secrecy of commercial terms, and is far more preferable.

Beyond transparency, a regulation could take the form of insisting on standard rates and terms for all OTT players, with differential usage tiers if need be, to ensure that access is truly non-discriminatory. This is how the market is structured on the retail side.

Since there are transaction costs in individually approaching each telecom provider for such zero-rating, the market would greatly benefit from a single marketplace where OTTs can come and enter into agreements with multiple telecom providers.

Even in this model, telecom networks will be charging based not only on the fact of the number of customers they have, but on the basis of them having exclusive routing to those customers. Further, even under the standard-rates based single-market model, a particular zero-rated site may be accessible for free from one network, but not across all networks: unlike the situation with a toll-free number in which no such distinction exists.

To resolve this, the regulator may propose that if an OTT wishes to engage in paid zero-rating, it will need to do so across all networks, since if it doesn’t there is risk of providing an unfair advantage to one network over another and increasing the gatekeeper effect rather than decreasing it.

Question 2

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

In many cases, TRAI would have no powers over such platforms, so the question of TRAI regulating does not arise. In all other cases, TRAI can allow the market to develop such platforms, and then see if any of them violates the Discriminatory Data Tariffs Regualation. For government-incentivised schemes that are proposed above, TRAI should take proactive measure in getting their feasibility evaluated.

Question 3

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

Spectrum is naturally a scarce resource, though technological advances (as dictated by Cooper’s Law) and more efficient management of spectrum make it less so. However, we have seen that fixed-line broadband has more or less stagnated for the past many years, while mobile access has increased. So the market distortionary power of fixed-line providers is far less than that of mobile providers. However, competition is far less in fixed-line Internet access services, while it is far higher in mobile Internet access. Switching costs in fixed-line Internet access services are also far higher than in mobile services. Given these differences, the regulation with regard to price discrimination might justifiably be different.

All in all, for this particular issue, it is unclear why different rules should apply to mobile users and fixed line users.

Question 4

Any other issue related to the matter of Consultation.

None.

In India’s mobile telecom sector, according to a Nielsen study, an estimated 15% of mobile users are multi-SIM users, meaning the “gatekeeping” effect is significantly reduced in both directions: Internet services can reach them via multiple ISPs, and conversely they can reach Internet services via multiple ISPs. See Nielsen, ‘Telecom Transitions: Tracking the Multi-SIM Phenomena in India’, http://www.nielsen.com/in/en/insights/reports/2015/telecom-transitions-tracking-the-multi-sim-phenomena-in-india.html↩

For more details visit https://cis-india.org/internet-governance/blog/cis-submission-trai-consultation-free-data