Within two weeks of the Federal Communications Commission’s (FCC’s) “open internet order”, a consortium of telecom and cable companies challenged it in court. The FCC, the US telecom regulator, had made the open internet order to protect network neutrality. Usually restrained in regulating internet services, it cited the overwhelming public interest from regulation.
On the face of it, India seems to be following a similar trajectory. On Monday, TRAI made the Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016. By preventing telecom companies from charging different prices for accessing different parts of the internet, the regulation protects net neutrality. Now, telecom companies cannot shape consumer behaviour by giving free access to certain websites and then charging the website owner. The internet has been protected — data must be treated equally and user choice prevails.
Telecom companies and some large internet firms had argued against this regulation in TRAI’s consultation process. After losing this bout, it’s reasonable to apprehend that they will challenge the regulations in court. Legal challenges to a regulation made by TRAI in consumer interest are regular. At this point, differences between the TRAI regulation and the FCC’s order can be marked. While clear authority exists under law for TRAI to make the regulations, the FCC made its rules on a shaky statutory foundation.
Though the TRAI statute is close to 15 years old, it provides several express powers to make rules in defined categories. Two of these categories were mentioned by Trai in the recital of its regulation and the explanatory memorandum that contains a detailed background. The first is the power to ensure compliance with the terms and conditions of the licence and the second is to notify rates at which telecommunication services can be offered. The first power comes into play as the telecom licences state that telecom users should have unrestricted access to the internet. The second is at the core of the regulation as it prohibits discriminatory pricing of tariffs.
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Further assurance can be derived from the fact that our courts are usually wary of stepping into the domain of policy formation and defer to expert regulators such as TRAI. TRAI’s explanatory memorandum refers to Secretary, Ministry of Information and Broadcasting vs Cricket Association of Bengal (1995) to state that airwaves and spectrum are a public resource. It further links this to the constitutional guarantee of freedom of speech and expression, stating how network neutrality will maintain the plurality of the internet, necessary for achieving this right. These fundamental precepts of law have been evolved by our courts by interpreting the Constitution. It’s only natural to expect the judiciary to apply them.
It’s easy to blame the telecom industry or make polemical arguments against it. To be clear — it’s no one’s case that telecom operators cannot and should not make a profit. Further, it’s unreasonable to punish them in the mistaken pursuit of anti-corporatism. Private industry has been instrumental in building networks and ushering in connectivity. The internet boom can be credited partly to it. But ultimately, it serves an interest much larger than shareholder profit. As licensees of spectrum, a public resource, the ultimate interest should be of the public.
TRAI has clearly indicated that the public interest is served by its network neutrality regulations. It has even taken a lead by completely prohibiting zero-rated services that the FCC permitted on a case-by-case basis. As appreciation flows in from abroad for Trai becoming a world leader in network neutrality regulations, moderation is important, given the certainty of a legal challenge. It’s hoped that any court determining a challenge weighs the considerations that have shaped this regulation. In doing so, it will provide the necessary confidence to a maturing regulator that’s expected to deal with increasing issues of regulating the internet as communication convergence becomes a reality.