As the United States has been the most innovative nation in fuelling the digital revolution globally, many of the regulations thereon have originated in the US, namely from the Federal Communications Commission (FCC). The FCC recently declared its intent to cease micromanaging net neutrality, suggesting instead a new era of a ‘light-touch regulatory framework’ in contrast to the heavy-handed one so far. This intent was validated by a vote among FCC members on 14 December. India has meanwhile reiterated its earlier policy of supporting net neutrality.

If we apply the analogy of a ‘pipe’ that carries data from any source to the end consumer through telecom service providers (TSPs) or internet service providers (ISPs), the fundamental premise of net neutrality is that the type of data being carried does not matter and the TSPs and ISPs cannot price or speed certain kinds of internet traffic differently to others. The consumer pays for the amount of data consumed irrespective of its nature or source.

The need for net neutrality derives from the potential for anti-competitive and anti-innovative practices on the part of TSPs and ISPs. For example, they may collude with large organisations in different areas of service, which may prevent consumers from accessing a competing TSP/ISP platform or a new start-up service provider.

A simplistic Indian example could be if a customer of Airtel (the leading Indian telecommunications firm) finds it easy to access Airtel Bank but difficult to access M-Pesa, the platform of Airtel’s competitor Vodafone, due to a net neutrality violation on the part of Airtel. Similarly, if Airtel has a tie-up with Netflix, they might speed up downloads from Netflix while slowing down traffic from a competing start-up platform.

It is important to note that net neutrality violation might not be the root cause of the differing competitiveness of the firms in the two examples above. M-Pesa and the start-up video-streaming service might be slow or inaccessible for a variety of internal reasons, such as server capacity, that have nothing to do with Airtel. Complexities like these can make prosecuting claims of net neutrality violations made on the basis of consumer experiences alone difficult, as doing so requires huge institutional investigations to prove systematic violation on the part of the TSP or ISP.

Wider adoption of apps further worsens these complexities. A TSP can offer its own branded phones with pre-installed apps for accessing the internet, with limited choice for the consumer when it comes to installing other apps. This arguably violates net neutrality as the TSP is channelling internet access to certain sites and services through these pre-installed apps. Such practices are a major concern for India as more than 94 percent of India’s broadband internet access is through mobile devices in a total broadband subscriber base of 324 million.

A prominent example of such practices was when India’s newest TSP entrant Reliance Jio ventured into locking consumers up to low-end voice over LTE-enabled phones — particularly with Jio Phone —raising concerns that net neutrality was being violated.

The Telecom Regulatory Authority of India (TRAI), which is the Indian equivalent of the FCC, faces these challenges in interpreting and implementing net neutrality in a fair manner. The word ‘fair’ is critical here, because perfect net neutrality may no longer be possible.

Due to cut-throat competition and India having one of the lowest price points for telecom services, Indian telecoms companies have opposed net neutrality from the beginning. This is understandable. They invest heavily in the capital-intensive infrastructure — the so-called ‘pipe’ — through which the consumer gets the data in their mobile devices. TSPs would naturally demand a share of the revenue being generated because of the ‘pipe’ itself. This is especially the case when low-cost innovations are further reducing the already small revenue these TSPs generate, and when many innovative internet giants like Facebook, Apple, Netflix and Google have hugely profited from the TSP-owned and -operated ‘pipe’.

Balancing market forces, innovation and fair competition is one of the biggest challenges that any regulator like the FCC or TRAI faces today. So despite recent criticism of the FCC’s decision to not micromanage net neutrality and to promote transparency, it may be the reality of the future.

In the case of TRAI, it has largely delivered rhetoric rather than fairness. TRAI needs to be seen as a fair regulator, be it strict or light-touch. TRAI and other Indian government telecom bodies have mismanaged India’s telecom sector for decades with blatant cronyism that often led to the withdrawal of global players from the Indian market. TRAI’s recent decision to favour Reliance Jio’s entry greatly harms existing firms and their investments just to reap the gains of a new entrant. This has resulted in low credibility for TRAI as a fair regulator.

Whatever TRAI’s official policy on strict net neutrality is, the real test of India’s net neutrality will be in its ‘fair’ implementation, even if it is not perfect. In light of TRAI’s recent failures with Jio and historical failures, including losing the government US$35 billion by selling telecom licenses at below market prices, what actually gets implemented in India in the name of net neutrality is anybody’s guess.

Professor Ranjit Goswami is Pro-Vice Chancellor at Sharda University, India.