Representational image only. File

The 6th U.S. Circuit Court of Appeals on Thursday (January 2, 2025) ruled against the second attempt of the Federal Communications Commission (FCC) to enforce net neutrality, the concept that all traffic on the internet must be treated equally by telecom companies and internet service providers (ISPs).

The setback highlights India’s divergent path on the issue in the last decade and telecom companies’ more recent attempts to find some room within India’s net neutrality approach to extract payments from big technology platforms.

What is net neutrality and why does it matter?

Net neutrality appears straightforward, but the United States’ and India’s battles started — and were driven — by completely different motivations. U.S. tech companies such as Netflix had chafed at attempts by telcos and ISPs’ to extract payments from them to broaden the bandwidth they made available to their services to catch up with demand. Digital rights advocates aligned with the tech firms on the issue, fearing the broader consequences of internet providers being allowed to establish “fast lanes” and “slow lanes,” an abstraction of the fight that quickly gained momentum and resulted in the Obama administration’s first FCC ruling on the matter.

India’s experience has been different. In 2014, before Reliance Industries Limited’s Jio entered the market and made mobile data cheaper, Bharti Airtel Ltd attempted to impose higher data tariffs on online calls on apps like Viber (WhatsApp had not yet introduced calling), sparking a coordinated, but eventually widespread movement against the practice of discriminatory data pricing. Back then, Facebook entered the debate with a massive marketing budget to defend its Free Basics service, which aimed to provide some online services for users without a data plan. The discriminatory data pricing fight became one about zero rating, the specific practice of exempting certain data from fees.

A telco double dip attempt that threatens Net neutrality

The Net neutrality advocates won. The Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications (DoT) respectively banned discriminatory data pricing in 2016 and made net neutrality a part of the Unified Licence (in 2018) which all telcos and ISPs must comply with. As a result, telcos have not been allowed for a decade to sell tariffs like WhatsApp-only packs, or slow down or speed up certain online services in comparison to others.

“The internet must remain a permissionless platform,” R.S. Sharma, who presided over the net neutrality debate as TRAI chairperson in the late 2010s said in a telephonic interview on Friday. “The basic issue is that there should be complete unbundling, unbundling in the sense that you cannot become a gatekeeper” of online data as a telecom operator or ISP, Dr. Sharma said.

In the U.S., the Obama era rules were rolled back by the FCC under President Trump in his first term, an effort spearheaded by then chairman Ajit Pai. Under the next Biden administration, the rules were reimposed by Mr. Pai’s successor, Jessica Rosenworcel.

The return of the Net neutrality debate in India

In the last two years, Indian telcos have advanced a demand that was not relevant in 2014 — when mobile internet traffic was negligible — but has always been front and centre in the U.S.: forcing large internet companies to pay up for the volume of traffic they occupy on internet providers’ networks. Telcos term this as the network usage fee, a demand that has alarmed net neutrality advocates.

Dr. Sharma argued that this was a “useless” debate. “Ultimately, they (telcos and ISPs) are selling bandwidth, and charging for the bandwidth. If they want, they can increase the price of the bandwidth, but they cannot increase the price of the bandwidth only for certain companies,” he said.

The Union government has not appeared so far to entertain the demand seriously, and a senior DoT official said that “no such proposal” was under consideration last May, months into the telcos’ campaign over the issue. On the other hand, the net neutrality advocates’ victories have not fructified completely. In the years after the concept was cemented into telecom licences in 2018, TRAI recommended the creation of a multi-stakeholder body to advise on the issue. In 2022, the Department of Telecommunications rejected the proposal, citing COVID-19 austerity measures.

In recent weeks, the telecom industry loudly demanded a ‘network usage fee’ from Big Tech platforms whose traffic constitutes a major part of the data flowing through the Indian internet. Internet rights groups have pushed back on these demands, saying that they are a violation of net neutrality, the principle that all data online should be treated equally. These demands come following years of setbacks to the telecom industry’s efforts to get more revenue for data services. 

Meanwhile, Telecom Regulatory Authority of India (TRAI), India’s telecom regulator, has sought public comments on this subject, and on whether messaging apps should be regulated. The regulator is asking whether it is possible for telecom operators to work with messaging apps, and social media platforms to block access to their services instead of imposing an internet shutdown. These two issues need some perspective to assess them.

In 2015, TRAI launched a consultation paper on a regulatory framework for ‘OTT services’. Netflix had not yet launched in India, and OTT, which stands for over-the-top, had not yet become strongly associated with streaming services in India. OTT services ride ‘over the top’ of internet networks, and don’t own the infrastructure of telecom networks through which their services ultimately reach people. 

The consultation included a section on ‘Network Neutrality’. Bharti Airtel Ltd had, in the previous year, announced that it would start charging users more for data that they used for placing online calls, such as on apps like Viber. The announcement sparked a pushback, and TRAI said it would consider the public’s views on the subject. Airtel dropped its announced tariff while the issue was being considered. 

Overwhelming public support for net neutrality

The public responded overwhelmingly in support of Net Neutrality, aided by advocacy tools and ready-to-send emails drafted by the Save the Internet coalition, which would later become the Internet Freedom Foundation. Facebook, which sensed an existential threat to its Internet.org offering that offered some parts of the internet on participating telcos’ networks for free, entered the fray with its own public outreach and advocacy. 

TRAI ended up spinning Net Neutrality off into a separate consultation, asking the public if ‘differential pricing’ of data should be allowed. That is, should telecom operators be allowed to charge people different amounts for accessing different services online? Internet rights groups — along with groups of start-ups — said no. In 2016, TRAI prohibited telecom companies from charging what it now called ‘discriminatory tariffs’. The Net Neutrality proponents had scored a victory.

Net neutrality includes different pricing for apps and platforms

However, Net Neutrality is about more than just what the consumer pays for access. It’s also about speeds, and whether telecom operators can selectively slow down traffic on their networks. Another issue is whether telecom operators can demand payments from the owners of websites and apps from which they receive a lot of traffic, and restrict data from them if the latter refuse. The net neutrality debate in the US since 2014 has centred around this issue.  

Telecom companies are all licensed by the Union Government’s Department of Telecommunications (DoT), and wireless telecom operators often obtain a Unified Licence, which sets out the exhaustive legal framework that telcos have to comply with. In October 2018, the Unified Licence was amended to hard-code Net Neutrality in the licence telcos obtain to operate. 

TRAI seeks consultation on contours of net neutrality rules

From 2017 onwards, TRAI consulted the public on how Net Neutrality rules must be understood, and what kinds of ‘traffic management practices’ should be allowed. The regulator recommended that a multi-stakeholder body be set up with participation from telecom operators, civil society and academia. 

Due to the COVID-19 pandemic and the government’s austerity measures in 2020, the DoT decided against forming this committee, even though TRAI argued that the public exchequer would not have to bear the brunt of the associated expenses. 

All this while, telecom operators have constantly argued that services like WhatsApp should be regulated, and that the ‘same service’ (voice calling and messaging) should be treated by regulators with the ‘same rules’. Telecom operators have not made much headway in realising these demands thus far. 

The European Commission began exploratory consultations this February on whether telcos can seek revenue sharing from online platforms. This renewed Indian telcos’ own demands. Telcos have argued from both national security and business grounds: that there is no mandated surveillance on messaging apps, and that they are only asking for a small share of the most successful companies’ profits. 

Government considering alternatives to internet shutdowns

In all these years, the Government imposed several internet shutdowns all across India. In Jammu and Kashmir, the longest shutdown in India was imposed following the abrogation of Article 370 of the Constitution. In Manipur, the internet has remained shut down for months, and after briefly lifting the ban, the government reimposed it. 

The Government is considering more targeted responses, as communications shutdowns lead to massive disruptions across sectors. Licensing these services is one suggestion, even though TRAI recommended against regulating OTT apps in September 2020. 

Meta, which owns WhatsApp, has not directly participated in these consultations this time, and its views are likely expressed through filings by various industry associations, which it is a part of. The ITI Council and the Asia Internet Coalition, two such associations, told TRAI that such moves would be counterproductive, and advised against it. 

Telecom industry more receptive to net neutrality now

On Net Neutrality at least, the telecom industry seems optimistic. The Cellular Operators Association of India (COAI)’s Director General S.P. Kocchar said in a media briefing in September that the Government was being more receptive to their demands than before. Minister of State for Electronics and Information Technology Rajeev Chandrasekhar also said on X, formerly Twitter, that Net Neutrality was important to defend. (Mr. Chandrasekhar’s work allocation in the Ministry does not include telecommunications.) 

Ultimately, telecom companies and advocacy groups have dug their heels in, finding themselves in a consultative process on Net Neutrality as well as regulating OTT services, the same situation they were in eight years ago.