For a Level Play­ing Field in 4G Telecom

Pol­icy must not priv­i­lege any op­er­a­tor

The Economic Times - - The Edit Page -

Pol­icy and reg­u­la­tion in In­dian telecom have evolved in re­sponse to com­pe­ti­tion in the busi­ness and its ar­tic­u­la­tion in the equally com­pet­i­tive polity. The reg­u­la­tory frame­work needs to evolve fur­ther, at this junc­ture, on the eve of the launch of fast mo­bile broad­band, dubbed fourth-gen­er­a­tion com­mu­ni­ca­tions, or 4G. The big dis­rup­tion in In­dian telecom is ex­pected to come from Re­liance Jio, pro­moted by Mukesh Am­bani, who first democra­tised mo­bile telecom in the coun­try with a 500-per-month of­fer a decade and a half ago. This of­fer forced all other ser­vice providers also to adopt the self­same low-mar­gin, high-vol­ume busi­ness model, driv­ing tar­iffs down fur­ther. We hope Jio will work another trans­for­ma­tive change in data speeds and costs.

How­ever, Jio must work its magic with­out any spe­cial priv­i­leges. One re­lates to the spec­trum us­age charge (USC). Jio orig­i­nally got spec­trum as a broad­band provider and so has to pay1% of rev­enue as USC. That con­tin­ues even af­ter se­cur­ing the right to of­fer call­ing ser­vices. Call­ing ser­vice providers pay 5-7% of their rev­enue as USC. High rev­enue shares made sense when spec­trum was bun­dled along with the li­cence, with­out any spe­cific up­front pay­ment for it. Now that most spec­trum in use is the kind that com­pa­nies buy in com­pet­i­tive auc­tions and pay for up­front, there is no case for high USC. It should be brought down to 1% for all ser­vice providers.

Another source of dis­com­fort is the telecom reg­u­la­tor’s re­luc­tance to de­fine an in­tranet, ex­empt from net neu­tral­ity rules that ap­ply to the pub­lic in­ter­net. Many worry that some op­er­a­tor might cir­cum­vent net neu­tral­ity rules by treat­ing con­nec­tions to its servers through which sub­scribers ac­cess ser­vices hosted on them with­out go­ing through the pub­lic in­ter­net as an in­tranet. A sim­ple so­lu­tion is to de­fine a com­pany’s in­tranet as the closed user group of those who re­ceive pay­ments from the com­pany for the ser­vices they ren­der it. Sub­scribers, for whom ser­vices flow from the com­pany and pay­ments to­wards it, will nec­es­sar­ily fig­ure out­side an in­tranet.

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