Centre for Internet & Society

Unlock = Open, not Choked!

Posted by Shyam Ponappa at Jun 15, 2020 03:04 AM |
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Don't let a virus stall initiatives and weaken the economy.

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After the Lockdown

Posted by Shyam Ponappa at Apr 09, 2020 10:05 AM |

This post was first published in the Business Standard, on April 2, 2020.

 

 
This is a time when, as the authorities deal with a lockdown, there needs to be an equal emphasis on providing for large numbers of people without the money for food and necessities, while the rest of us wait it out. Hard as it is, an MIT scholar writes that after the Spanish flu in 1918, cities that restricted public gatherings sooner and longer had fewer fatalities, and emerged with stronger economic growth.1 It is likely that costs and benefits vary with economic and social capacity, and we may have a harder time with it here. Going forward, government action to help provide relief, rehabilitate people and deal with loss needs to be well planned, including targeting aid to the urban and displaced poor.2
As important now as to ensure the lockdown continues is to plan on how to revive productive activity and the economy, and restore public confidence. A systematic approach will likely yield better results.
A major element of the recovery plan is steps such as liberal credit and amortisation terms, perhaps much more than the three-month extension the Reserve Bank of India (RBI) has announced. A primary purpose is the re-initiation of large-scale activities such as construction, of which there are reportedly about 200,000 large projects around the country. These have to be nursed back to being going concerns. The RBI may need to consider doing more, including lowering rates.
An ominous development that has grown as the economy slowed is financial stress that could swell non-performing assets (NPAs). At the half-year ending September 2019, about half of non-financial large corporations in India, excluding telecom, showed financial stress (see table).
 
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Source: Krishna Kant: "Coronavirus shutdown puts Rs 15-trillion debt at risk, to impact finances", BS, March 30, 2020:

 

These include some of India’s largest companies, producing power, steel, and chemicals. The 201 companies have total debt of nearly Rs 15 trillion, more than half of all borrowings. There is also the debt overhang of the National Highways Authority of India, and of the telecom companies. Ironically, the telecom companies are our lifeline now, despite having nearly collapsed under debt because of ill-advised policies in the past, which have still not changed. Perhaps our obvious dependence telecom services now will spark well conceived, convergent policies for this sector, so that we can function effectively.  
A start with immediate changes in administrative rules for 60GHz, 70-80GHz, and 500-700MHz wireless use, modelled on the US FCC regulations as was done for the 5GHz Wi-Fi in October 2018, could change the game. It will provide the opportunity in India for the innovation of devices, their production, and use, possibly unleashing this sector. This can help offset our reliance on imported technology and equipment. However, such changes in policies and purchasing support have eluded us thus far. Now, the only way our high-technology manufacturers can thrive is to succeed internationally, in order to be able to sell to the domestic market. Imagine how hard that might be, and you begin to get an inkling of why we have few domestic product champions, struggling against odds in areas such as optical switches, networking equipment, and wireless devices. For order-of-magnitude change, however, structural changes need to be worked out in consultation with operators in the organisation of services through shared infrastructure.
 

For the longer term, a fundamental reconsideration for allocating resources is needed through coherent, orchestrated policy planning and support. What the government can do as a primary responsibility, besides ensuring law and order and security, is to develop our inadequate and unreliable infrastructure, including facilities and services that enable efficient production clusters, their integrated functioning, and skilling. For instance, Apple’s recent decision against moving iPhone production from China to India was reportedly because similar large facilities (factories of 250,000) are not feasible here, and second, our logistics are inadequate. Such considerations should be factored into our planning, although Apple may well have to revisit the very sustainability of the concept of outsize facilities that require the sort of repressive conditions prevailing in China. However, we need not aim for building unsustainable mega-factories. Instead, a more practical approach may be to plan for building agglomerations of smaller, sustainable units, that can aggregate their activity and output effectively and efficiently. Such developments could form the basis of numerous viable clusters, and where possible, capitalise on existing incipient clusters of activities. Such infrastructure needs to be extended to the countryside for agriculture and allied activities as well, so that productivity increases with a change from rain-fed, extensive cultivation to intensive practices, with more controlled conditions.

The automotive industry, the largest employer in manufacturing, provides an example for other sectors. It was a success story like telecom until recently, but is now floundering, partly because of inappropriate policies, despite its systematic efforts at incorporating collaborative planning and working with the government. It has achieved the remarkable transformation of moving from BS-IV to BS-VI emission regulations in just three years, upgrading by two levels with an investment of Rs 70,000 crore, whereas European companies have taken five to six years to upgrade by one level. This has meant that there was no time for local sourcing, and therefore heavy reliance on global suppliers, including China. While the collaborative planning model adopted by the industry provides a model for other sectors, the question here is, what now. In a sense, it was not just the radical change in market demand with the advent of ridesharing and e-vehicles, but also the government’s approach to policies and taxation that aggravated its difficulties.

Going forward, policies that are more congruent in terms of societal goals, including employment that support the development of large manufacturing opportunities, need to be thought through from a perspective of aligning and integrating objectives (in this case, transportation). Areas such as automotive and other industries for the manufacture of road and rail transport vehicles need to be considered from the perspective of reconfiguring the purpose, flow, and value-added, to achieve both low-cost, accessible mass transport, and vehicles for private use that complement transportation objectives as also employment and welfare.
Systematic and convergent planning and implementation across sectors could help achieve a better revival.
 
Shyam (no space) Ponappa at gmail dot com

 



India’s ‘Self-Goal’ in Telecom

Posted by Shyam Ponappa at Apr 09, 2020 07:18 AM |

 

This post was first published in the Business Standard, on March 5, 2020.

 

 

 

The government apparently cannot resolve the problems in telecommunications. Why? Because the authorities are trying to balance the Supreme Court order on Adjusted Gross Revenue  (AGR), with keeping the telecom sector healthy, while safeguarding consumer interest. These irreconcilable differences have arisen because both the United Progressive Alliance and the National Democratic Alliance governments prosecuted unreasonable claims for 15 years, despite adverse rulings! This imagined “impossible trinity” is an entirely self-created conflation.
If only the authorities focused on what they can do for India’s real needs instead of tilting at windmills, we’d fare better. Now, we are close to a collapse in communications that would impede many sectors, compound the problem of non-performing assets (NPAs), demoralise bankers, increase unemployment, and reduce investment, adding to our economic and social problems.
Is resolving the telecom crisis central to the public interest? Yes, because people need good infrastructure to use time, money, material, and mindshare effectively and efficiently, with minimal degradation of their environment, whether for productive purposes or for leisure. Systems that deliver water, sanitation, energy, transport and communications support all these activities. Nothing matches the transformation brought about by communications in India from 2004 to 2011 in our complex socio-economic terrain and demography. Its potential is still vast, limited only by our imagination and capacity for convergent action. Yet, the government’s dysfunctional approach to communications is in stark contrast to the constructive approach to make rail operations viable for private operators.
India’s interests are best served if people get the services they need for productivity and wellbeing with ease, at reasonable prices. This is why it is important for government and people to understand and work towards establishing good infrastructure.

What the Government Can Do


An absolute prerequisite is for all branches of government (legislative, executive, and judicial), the press and media, and society, to recognise that all of us must strive together to conceptualise and achieve good infrastructure. It is not “somebody else’s job”, and certainly not just the Department of Telecommunications’ (DoT’s). The latter cannot do it alone, or even take the lead, because the steps required far exceed its ambit.

Act Quickly


These actions are needed immediately:

First, annul the AGR demand using whatever legal means are available. For instance, the operators could file an appeal, and the government could settle out of court, renouncing the suit, accepting the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) ruling of 2015 on AGR.

Second, issue an appropriate ordinance that rescinds all extended claims. Follow up with the requisite legislation, working across political lines for consensus in the national interest.

Third, take action to organise and deliver communications services effectively and efficiently to as many people as possible. The following steps will help build and maintain more extensive networks with good services, reasonable prices, and more government revenues.



Enable Spectrum Usage on Feasible Terms


Wireless regulations

It is infeasible for fibre or cable to reach most people in India, compared with wireless alternatives. Realistically, the extension of connectivity beyond the nearest fibre termination point is through wireless middle-mile connections, and Wi-Fi for most last-mile links. The technology is available, and administrative decisions together with appropriate legislation can enable the use of spectrum immediately in 60GHz, 70-80GHz, and below 700MHz bands to be used by authorised operators for wireless connectivity. The first two bands are useful for high-capacity short and medium distance hops, while the third is for up to 10 km hops. The DoT can follow its own precedent set in October 2018 for 5GHz for Wi-Fi, i.e., use the US Federal Communications Commission regulations as a model.1 The one change needed is an adaptation to our circumstances that restricts their use to authorised operators for the middle-mile instead of open access, because of the spectrum payments made by operators. Policies in the public interest allowing spectrum use without auctions do not contravene Supreme Court orders.

Policies: Revenue sharing for spectrum


A second requirement is for all licensed spectrum to be paid for as a share of revenues based on usage as for licence fees, in lieu of auction payments. Legislation to this effect can ensure that spectrum for communications is either paid through revenue sharing for actual use, or is open access for all Wi-Fi bands. The restricted middle-mile use mentioned above can be charged at minimal administrative costs for management through geo-location databases to avoid interference. In the past, revenue-sharing has earned much more than up-front fees in India, and rejuvenated communications.2 There are two additional reasons for revenue sharing. One is the need to manufacture a significant proportion of equipment with Indian IPR or value-added, to not have to rely as much as we do on imports. This is critical for achieving a better balance-of-payments, and for strategic considerations. The second is to enable local talent to design and develop solutions for devices for local as well as global markets, which is denied because it is virtually impossible for them to access spectrum, no matter what the stated policies might claim.

Policies and Organisation for Infrastructure Sharing

Further, the government needs to actively facilitate shared infrastructure with policies and legislation. One way is through consortiums for network development and management, charging for usage by authorised operators. At least two consortiums that provide access for a fee, with government’s minority participation in both for security and the public interest, can ensure competition for quality and pricing. Authorised service providers could pay according to usage.
Press reports of a consortium approach to 5G where operators pay as before and the government “contributes” spectrum reflect seriously flawed thinking.3 Such extractive payments with no funds left for network development and service provision only support an illusion that genuine efforts are being made to the ill-informed, who simultaneously rejoice in the idea of free services while acclaiming high government charges (the two are obviously not compatible).
Instead of tilting at windmills that do not serve people’s needs while beggaring their prospects, commitment to our collective interests requires implementing what can be done with competence and integrity.

Shyam (no space) Ponappa at gmail dot com
1. https://dot.gov.in/sites/default/files/2018_10_29%20DCC.pdf
2. http://organizing-india.blogspot.in/2016/04/ breakthroughs- needed-for-digital-india.html
3. https://www.business-standard.com/article/economy-policy/govt-considering-spv-with-5g-sweetener-as-solution-to-telecom-crisis-120012300302_1.html

The Telecom Crisis is an NPA Problem

Posted by Shyam Ponappa at Dec 15, 2019 07:26 AM |
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After interim relief for telecom, structural reforms must follow.

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Traffic Rules, Mindset and On-Time Payments

Posted by Shyam Ponappa at Sep 26, 2019 03:05 PM |
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There's no alternative to following the rules and working together with discipline for our common interests.

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Fix Problems Before Complete Failure

Posted by Shyam Ponappa at Jul 31, 2019 02:43 AM |
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We need some real solutions on the ground. Examples - Jet Airways post mortem findings applied as the way forward for difficult NPAs; and a radical change of course a

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Fostering Strategic Convergence in US-India Tech Relations: 5G and Beyond

Posted by Justin Sherman and Arindrajit Basu at Jul 05, 2019 02:19 AM |

The 2019 G-20 summit underscores the importance of fostering strategic convergence in U.S.-India tech relations.

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5G Aspirations and Realities

Posted by Shyam Ponappa at Jun 06, 2019 10:00 PM |
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What the government can do for 5G and Digital India with a Systems Approach.

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The Huawei bogey

Posted by Gurshabad Grover at May 30, 2019 03:00 PM |
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India needs to prove company aids Chinese government, or risk playing into US hands.

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Democracy, Digital India and Networks

Posted by Shyam Ponappa at May 01, 2019 10:00 PM |
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Digitisation and democracy are ruled by the ineluctable dynamics of networks.

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Delayed Cash Flows and NPAs

Posted by Shyam Ponappa at Apr 28, 2019 04:36 AM |
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We need to rid ourselves of a tolerance of delayed payments to avoid their consequences.

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Recapturing the Commons

Posted by Shyam Ponappa at Mar 07, 2019 07:00 PM |
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Regulations that facilitate infrastructure with appropriate public resource use will enhance productivity.

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A great start on Wi-Fi reforms

Posted by Shyam Ponappa at Nov 30, 2018 04:43 PM |
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The 5 GHz regulations are exactly what we needed for a start. But we need a lot more, and not only from the DoT.

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Policies & the Public Interest

Posted by Shyam Ponappa at Oct 04, 2018 03:00 PM |
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The public interest calls for real reforms for equitable growth.

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The Problems That Should Occupy Our Electioneers

Posted by Shyam Ponappa at Jul 06, 2018 12:05 AM |
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The prize in the elections next year could be a winner's curse.

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Comments on the Telecom Commercial Communications Customer Preference Regulations

Posted by Sandeep Kumar, Torsha Sarkar, Swaraj Barooah, Gurshabad Grover at Jun 22, 2018 10:15 AM |

This submission presents comments by the Centre for Internet & Society, India (“CIS”) on the Telecom Commercial Communications Customer Preference Regulations which was released to the public by the Telecom Regulatory Authority of India (TRAI) on 29th May 2018 for comments and views.

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India's Draft Telecom Policy Needs to Bridge the Gap Between Intent and Execution

Posted by Anubha Sinha at May 07, 2018 04:13 PM |
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Earlier this week, India’s department of telecommunications (DoT) released a draft new telecom policy, titled ‘Draft National Digital Communications Policy 2018’.

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The Huawei pointer

Posted by Shyam Ponappa at May 06, 2018 01:04 PM |
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Taking a cue from Huawei. Huawei has an awe-inspiring record of drive, perseverance, fortuitous circumstances, good strategy, execution, and success.

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NPAs & Bad Banks

Posted by Shyam Ponappa at Mar 25, 2018 03:53 AM |
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Correcting misinformed impressions about NPAs, and the Swedish model for setting up a Bad Bank.

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Matching Realities and Aspirations

Posted by Shyam Ponappa at Feb 01, 2018 11:50 AM |
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Leaving aside fixing the 'mountains' such as land acquisition, NPAs etc, here are some thoughts on systemic focus and action.

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