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After Star, Sony India comes down hard on moves to curb net neutrality

by S Nambrath

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SONY

After Star TV, Sony Pictures Networks India — which runs several popular TV channels — has raised a red flag against any move to splinter the Internet into free and paid.

“Differential pricing leads to restriction of access to information. It enables TSPs to play the role of gate-keepers to the internet where they are in a position to differentiate between data packets,” Sony India said in its submission to the TRAI.

“While they may be portrayed as means of subsidizing costs of accessing the internet, it needs to be understood that such subsidization is also a way of differentiation which can distort the equilibrium of the internet as it is enjoyed today, where everybody has unrestricted access and also has equal opportunities.”

It was responding to the TRAI’s consultation on how to take the Internet to the masses. At present, India has only around 400 mln Internet users and only around the same number of computers and smartphones.

TRAI and the government are keen to take the number higher, and the regulator asked if telecom companies should be allowed to give certain websites free after taking money from the owners of the websites.

Sony, Star, Sun TV and Zee TV are the biggest content companies in India and account for the majority of video content produced in the country. The last two are yet to respond to the authority. Another media firm, the Times of India group, has already sent its response.

All content companies who have sent responses to TRAI, including Star, have vehemently opposed any move to allow telelcom companies to charge them for carrying their content.

They argue that telecom companies are using the pretext of giving Internet to poor people to charge content makers to be on the Internet. At present, any content maker — whether an individual or a company — can share content — whether videos, pictures or text — with others by paying one telecom company for an Internet connection.

However, telecom companies want to create their own Internets using public spectrum with new rules decided by them. In the new model, not only will you have to pay the telecom company who gives you your connection, but you will most likely also have to pay all the telecom networks which have been used by anyone to view or download your content.

This is different from the current model in which the downloading charges for a video rests on the person who downloads it, not on the person who originally created it.

The telecom companies’ proposals has been opposed by content companies and rights activists on the grounds that spectrum is a public property and cannot be used as and how telecom companies like.

They also point out that making content companies to pay for users’ downloads will be harmful to the emergence of new companies as they won’t be able to afford the costs.

“While we strongly believe that there is an urgent need to connect a billion unconnected people and narrow the digital divide, we certainly believe that there are other transparent and more effective ways of achieving that goal,” Sony said.

“Allowing TSPs (telecom service providers) to charge differently for different uses of data essentially would essentially create a tariff regime where TSPs would have the right to create different classes of subscribers based on the kind of content they want to access and determine different prices for different websites, applications and platforms.

“Such differential pricing would thus allow TSPs to fundamentally alter the nature of competition between these websites, applications and platforms in a manner not linked to the quality of the services they deliver to consumers, but on the business arrangement between the TSPs and the websites, applications, platforms etc. This would also end up distorting and altering the primary role of TSPs.”

“The possibility of competition between different companies could be subverted if competitors could collude with TSPs. Such collusion would invariably result in financially able entities paying carriers to ensure that a competitor’s website loads slowly, or is inaccessible altogether, or the use to it is more cost intensive…

“It is submitted that such activities in addition to being anti-competitive and unfair, would also give rise to increasing market entry costs for non-participating entities, using dominance in the market to abuse the same through service tie ups and predatory pricing. It is therefore submitted that any such differential pricing arrangement for data services between the TSPs and websites/applications/service/content providers etc. would be violative of the provisions of the Competition Act, 2002.

“In recent times, it has been seen that a prominent telecom service provider in the country is providing access to one of the foremost social media networking sites on a zero rating plan. It is submitted that such an arrangement would have an appreciable and adverse effect on competition which does not form a part of such an arrangement. Such service tie ups and predatory pricing would ensure that there is an increase of market entry costs for non-participating entities, which incidentally did not exist when the said social media networking site itself was a start-up. It is also submitted that TRAI should also seek the opinion of the Competition Commission of India to understand the anti-competitive effects of the differential price regime,” Sony said.

The company also drew the regulator’s attention to the scenario in cable services, and warned that telecom players are trying to replicate such a model on the Internet.

“Such a differential pricing regime would also create a system which replicates the harmful effects of arrangements between carriage and content playing out in the cable and satellite space wherein MSOs instead of consumers have been prioritizing the content to be carried on their cable platforms. The basis of such prioritization being the carriage and placement fees being paid by content owners. This anticompetitive behavior by MSOs has led to small content providers being hit the most as carriage and placement fees act as entry barriers for new content providers.”

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