In its hurry, TRAI ignores crucial aspects

 

On 8th February 2015, the Telecom Regulatory Authority of India (TRAI) released a regulatory notification which many have hailed as the document which saved the internet in India. The Regulation mandates that “No service provider shall offer or charge discriminatory tariffs for data services on the basis of content,” [Section 3.(1)] and that no service provider shall enter into an arrangement “that has the effect of discriminatory tariffs for data services being offered or charged to the consumer on the basis of content” [Section 3.(2)].

The term “service provider” thankfully includes the Government and other licensees under the Indian Telegraph Act, 1885, which broadly means all ISPs. The Regulation comes in wake of the controversy over Facebook Free Basics and in effect, bans it and other zero-rated services. This spells a win for what is broadly the anti-Free Basics camp, which argued on the reasoning that “allowing service providers to define the nature of access would be the equivalent of letting TSPs shape the users' internet experience. This can prove to be risky in the medium to long term as the knowledge and outlook of those users would be shaped only by the information made available through those select offerings,’ as cited by TRAI in its explanatory memorandum.

TRAI endorses this reasoning to the Regulation [see para 19, page 10] which is all well and good. In this sense, TRAI did “save the internet.” But did it “save” all the interests of the people using the internet and potential internet users? And did it “save” the citizens’ right to the freedom of expression? That’s a trickier question to answer.

 

Other judgements hold lessons…

The law in India has in the past encountered the questions which have come up in this net neutrality/Free Basics debate, albeit in a different form. Funnily enough, we tend to ignore that experience. The years from the 1960s to the 1980s saw a series of newspaper cases being brought before the Supreme Court, notably Sakal Newspapers v. Union of India (1962) and Bennett Coleman v. Union of India (1972), which brought up the same complex questions of pricing, infrastructure, revenue generation, distribution, access, and diversity in the arena of newspapers, which the net neutrality debate has raked up today with respect to the internet.

Ironically, TRAI even cites one of these cases - Indian Express Newspapers v. Union of India (1985) - in its Explanatory Memorandum[para 24.3, page 12], in support of its Regulation, while forgetting that if the rationale of that judgment were to be followed, TRAI’s saviour Regulation would be unconstitutional. Here is how…

The Indian Express case, much like its predecessors in the newspaper cases series, was concerned with the question of the constitutionality of an executive regulation which resulted in an increase of import duty on the import of newsprint. Such import, the petitioner newspapers contended, made up the bulk of their expenditure. The argument was that the increase in import duty will compel newspapers to increase their prices. Since the newspaper market was extremely price-sensitive, such an increase would result in fewer people buying newspapers, reducing the circulation of the petitioner newspapers.

This, the newspapers argued, would have the direct effect of crippling their freedom of speech and expression guaranteed by the Constitution under Article 19(1)(a). The regulation in question, it was further argued, would result in decreased access to newspapers for the Indian population, hampering the public’s right to be informed under Article 19(1)(a).

The petitioners’ arguments, however, took the extreme approach that the imposition of all taxes on the newspaper industry was unconstitutional. The defendant Government on the other hand argued that the regulation was constitutional as it sought to regulate the business of the petitioners and not harm their freedom of expression under Article 19(1)(a).

 

Factoring in the role of the media in a democracy

The Court in its judgment took a more thoughtful stance. It held that an adequate correlation between the rise in newsprint import duty and a fall in newspaper circulation had not been established in the case:

“The question in the present cases is whether the tax has been shown to be so burdensome as to warrant its being struck down? The petitioners have succeeded in showing a fall in circulation but whether it is a direct consequence of the customs levy and the increase in price has not been duly established […]Except the synchronizing of time, there is nothing to indicate that the slight fall in circulation is directly due to the levy of customs duty.” [sic]

In making this judgment, the Court rejected the arguments of both the newspapers and the Government:

“On the material now available to us, while it is not possible to come to the conclusion that the effect of the levy is indeed so burdensome as to affect freedom of the press, we are also not able to come to the conclusion that it will not be burdensome. This is a matter which touches the freedom of the press which is, as we said, the very soul of democracy. This is certainly not a question which should be decided on the mere question of burden of proof. There are factors indicating that the present levy is heavy and is perhaps heavy enough to affect circulation. On such a vital issue, we cannot merely say that the petitioners have not placed sufficient material to establish the drop in circulation is directly linked to increase of the levy when, on the side of the Government the entire exercise is thought to be irrelevant. Hence there appears to be a good ground to direct the Central Government to reconsider the matter afresh in the light of what has been said here.”

There are three important takeaways from this: First, though the Court did not strike down the executive regulation in question, it did consider empirical evidence to be important enough to have a bearing on its decision, and refused to give a decision in favour of either the newspapers or the Government in the absence of that.

Second, the Court did reason that if the import duty levy was burdensome enough to affect the circulation of newspapers, the regulation would be in violation of Article 19(1)(a).

And third, it relied on the Bennett Coleman judgment to hold that “it is the duty of the State to encourage education of the masses through the medium of the press under Article 41 of the Constitution,” and that the circulation of newspapers was an important part of this endeavour.

 

So what? The internet is different from newspapers

An argument may be made that zero-rated platforms like Facebook Free Basics are, like newspapers, about the circulation of a particular kind of content. And therefore, in light of the Indian Express and Bennett Coleman judgments, a complete ban on these platforms - which is what the TRAI regulation does - would be a violation of their right to freedom of speech and expression under Article 19(1)(a).

Such a ban could additionally be argued to be in contravention of the state duty under Article 41 of the Constitution to educate people, and against Article 19(1)(a) again, by preventing their access to certain kinds of information services, which do not qualify for a ban under Article 19(2).

In response to this though, one may say that the internet is so different from newspapers that making an analogy of this kind is quite ridiculous and the newspaper cases can in fact be distinguished from the case of the TRAI regulation on differential pricing on the internet.

TRAI itself articulates some of these differences in its Explanatory Memorandum when it talks about the unique architecture of the internet in the form of the end-to-end principle and universal network protocols [see para 15, page 9].

But notwithstanding that TRAI’s understanding of internet architecture is idealistic theory and lacks correspondence with the practical workings of everyday internet architecture (a point which has been elaborated here), one can still argue that these differences are irrelevant for the application of the rationale of the newspaper cases to the TRAI Regulation.
First, as far as Article 19(1)(a) is concerned, the Court needs to only consider the question whether the Regulation hinders the circulation of content of zero-rated/differentially priced platforms, which is the same question as the one occurring in the newspaper cases.

Second, the reason for which the circulation was affected in the newspaper cases is the difference in prices, which is the same reason as in the case of these internet apps.

Third, the revenue model of such platforms, one presumes, is either advertising or philanthropy and advertising was declared a legitimately protected form of expression in all the newspaper cases. Because of these reasons, there are enough similarities, relevant in law, between the newspaper cases and the TRAI Regulation on differentially priced internet apps to warrant that the classification which TRAI makes to ban certain apps is in fact, in violation of Article 19(1)(a).

 

Favouring some public interest principles at the expense of others

I make the argument that the TRAI regulation is potentially unconstitutional under Article 19(1)(a) here merely to illustrate that TRAI’s rationale in making this regulation is only reactive to big industry pressures and does not really take into account the intricate ecology of the internet which, like newspapers, touches upon a myriad concerns like media access, diversity, access to knowledge, innovation in both internet content and ISP industries, competition law, different forms of equality and fairness, and invisible censorship by both the state and the market.

All of these are issues of public interest and they all equally underpin various fundamental rights under the Constitution. Even the judgments in the newspaper cases did not account for all these concerns together where newspapers were concerned. And if TRAI had actually made an effort to wrap its head around the nuances of this internet ecology, it would have found itself unable to deliver any regulatory policy within the space of a month, or even a year, because the ways these different issues interact are intricate enough to leave one wondering what public interest in the internet context might really mean.

However, business pressures - from both foreign giants like Facebook, Indian ISPs and from an agglomeration of Indian startups in the internet content space - have resulted in a hurried Regulation which fails to base itself in the paradigm of inclusive public interest and is instead left suspended between the warring camps of pro- and anti- differential marketers. Consequently, this Regulation comes off as a missed opportunity and sadly unambitious as far as any regulatory design based on a comprehensive evaluation of citizen’s rights in this country is concerned.

 

Smarika Kumar  is a legal researcher who was until recently with  the Alternative Law Forum, Bangalore