Avni Sharma & Anurag Mohan Bhatnagar, both 2nd year law students of National Law University, Odisha discusses the concept of net neutrality in India.
Lockdown in the 21st Century has led to a hefty increase in the usage of the internet. Social distancing has urged the global population to go online. All the market giants, including Netflix, Amazon Prime, Hulu, and HBO Max, have gained massive popularity and have become a major source of entertainment. At this juncture, net neutrality plays a major role as this opportunity might be used by market powers to benefit their sales.
Network neutrality or net neutrality is a concept that promotes equality of all data on the internet regardless of the platform, usage, content, or device. The Over The Top (OTT) Platforms require strict regulation during these times. There is a wide scope for abuse of dominant position related to the usage of data on the cloud platforms. The concept was floated in 2002, as a response to the Federal Communication Commission’s (FCC) efforts in providing infrastructure to competing firms who are sharing data usage. These guidelines also restricted the service providers like Comcast and AT&T to speeding or slowing the traffic to specific websites or portals without a justifiable reason. However, it can be noticed that prime competitors have introduced measures to abuse their dominant power, which was acquired as a result of a significant merger. This article examines the effect of abuse of dominant power by way of breaching network neutrality
FCC’s Guidelines to Prevent Abuse of Dominant Power, 2015:
In 2015, the Federal Communication Commission (FCC) passed a ruling in favor of net neutrality by sorting out broadband as a regular carrier as under Title II of the Communications Act, 1934 and Section 706 of the Telecommunications Act, 1996.
From its inception, the FCC guidelines have been controversial. FCC has variegated broadband connections as a telecommunication service of Title II. This would, in turn, mean that the broadband providers and the telephone networks would follow the same set of regulations. Comcast and AT&T appealed that Title II enables the FCC to foist high rates, which will restrict them from enhancing their network. The order from the FCC derives three key rules which the market powers were concerned about:
- Prohibits Blocking – Broadband services would be banned from blocking legal applications, services, or non-harmful devices.
- Prohibits Suppression – Initially, FCC permitted the system of throttling, which proscribed broadband providers from hampering certain applications or services. However, the guidelines did not permit the use of throttling.
- Outlawed Paid Prioritization – Broadband providers could not charge a fee for treating some content as preferred content. The order prohibited internet fast lanes.
Competitive Unilateral Effect of Acquisition of Time Warner by AT&T:
In 2016, AT&T announced its intention to acquire Time Warner. However, the authorities were skeptical about this transaction as it could compromise the competition in the market. The authorities were also concerned about the potential power to raise the price of the content taken by its competitors in the market. However, the Appeals Court’s final decision affirmed that this is a ‘vertical merger,’ which is unlikely to have an effect on antitrust grounds. However, this merger, as stated earlier, has started to have competitive repercussions as it has introduced data caps for customers who use its’ rival companies’ services.
It is observed that vertical mergers must also be scrutinized for violating antitrust structures of the market. Even senators like Ed Markey, Ron Wyden, and Richard Blumenthal have criticized the action taken by AT&T. This also comes after the company’s statement, which affirms with net neutrality concepts. It also marks a crucial time to enforce the net neutrality principles because of the hour’s urgent requirement.
AT&T has zero-rated the data on HBO Max, which means, on the one hand, it might sound beneficial, but it harms the competition in the market. Where AT&T will not be charged for using the services of HBO max, Netflix and Amazon Prime will be charged. Since it has a great competitive advantage, it will be considered as unfair. Hence, the authorities must take consideration of vertical mergers, as it was because of the huge acquisition in 2018, that AT&T was able to make such arrangements and take unfair advantage of its dominant power.
Net Neutrality in India and its Effect on Competition Law:
Competition Commission of India (CCI) determines the appreciable adverse effect by factors mentioned under Section 19(3) of the Competition Act, 2002 (‘The Act’). According to these factors, breach of net neutrality is also considered abuse of a dominant position. The presence of private players in India’s market calls for independent regulation for net neutrality in India.
India began its journey for net neutrality in the year 2015. In 2015, Airtel was dictated to withdraw a plan which demanded additional amount for internet accessed calls and discontinued a platform called ‘Airtel Zero,’ which authorized the customers to access certain applications free of cost”.. This is known as “zero-rating”. The Telecom Regulatory Authority of India (TRAI) published a paper on net neutrality in March 2015 which was not welcomed by the Indian market and even set up websites such as “savetheinternet(dot)in”.
In 2016, TRAI released the Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016 to prevent the abuse by service providers in India. Such an abuse of power in India would result in heavy losses to many mediocre players in the market. Therefore, it is of utmost importance that our authorities learn from the American jurisdiction and enforce a specific set of regulations for net neutrality in India to prevent any abuse.
India has been adaptive to changing models, and now is the time to make our laws accustomed to the network-neutral era. We suggest that the authorities formulate immediate regulations for net neutrality and the protection of the competitive market in India while keeping the vertical mergers into consideration. The competition law regime in India has also evolved with the changing times. The regime now needs to focus on the idea of vertical mergers affecting the competitive market. The authors suggest that since the internet has become an integral part of our lives, the laws must be formulated according to the needs of a net neutral world.
Avni Sharma & Anurag Mohan Bhatnagar are 2nd year law students from National Law University, Odisha
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Telecommunications Act, § 706 (1996).
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