The growing concern of Net Neutrality

Greenvissage explains, What is Net Neutrality and why is it a growing concern?

Imagine a library where the librarian can decide which books you can and can’t read. They can also charge you extra to read certain books or slow your access to them. This is what the internet would be like without net neutrality. Net neutrality is the principle that all internet traffic should be treated equally. This means your internet service provider (ISP) can’t block or slow down access to certain websites or services, or charge you extra for using them. Whether you’re streaming videos, browsing websites, or sending cute cat GIFs to your friends, your data should flow freely and without any discrimination. If net neutrality weren’t a thing it would create a digital divide, where some content and websites load lightning-fast, while others are stuck in the slow lane. However, net neutrality is becoming a growing concern because internet service providers (ISPs) want to charge different prices for different types of internet traffic or to block or slow down access to certain websites or services. ISPs argue that this would allow them to invest more in their networks and provide better service to their customers. However, this would give ISPs too much power over the internet and would stifle innovation and competition.

Imagine that a new streaming service comes out that offers competitive prices and a wide selection of movies and TV shows. This streaming service could pose a threat to established streaming services like Netflix and Amazon Prime. To prevent this, an ISP could decide to block or slow down access to the new streaming service, or to charge its customers extra to use it. This would make it difficult for the new streaming service to compete and would reduce consumer choice. It may also prioritize or throttle internet speeds for certain services or websites unless they pay additional fees. This creates an uneven playing field, where larger corporations can afford faster and more reliable access, disadvantaging smaller businesses and startups. Another example is zero rating, which is when ISPs allow customers to access certain websites or services without using their data allowance. ISPs often use zero-rating to promote their services, or to partner with popular websites and services. However, zero-rating can also be used to discriminate against competing websites and services. For example, an ISP could offer zero-rating for its video streaming service, but not for competing video streaming services. This would give the ISP’s video streaming service an unfair advantage.

Without net neutrality, ISPs can easily analyze and manipulate data traffic, potentially discriminating against certain types of content or services based on their interests or partnerships. This could hinder access to specific content or platforms. It would also pose a risk that ISPs could manipulate access to information, potentially favouring certain political or ideological views, thereby undermining the democratic and open nature of the internet. Besides, ISPs can potentially gather and monetize consumer data in a way that compromises user privacy, as they have more control over what data is being transmitted and to whom.

India’s net neutrality rules were introduced in 2016 and were some of the most stringent in the world. The rules prohibited internet service providers (ISPs) from blocking or throttling access to any website or service, and from charging users extra for accessing certain websites or services. However, the rules were also challenged by ISPs and therefore, in 2018, the Telecom Regulatory Authority of India (TRAI) issued a new set of net neutrality regulations that were more lenient than the previous regulations and allowed ISPs to offer zero-rating plans that exempt certain websites and services from data usage caps. Thus, the current net neutrality regulations in India are a compromise between the interests of ISPs and net neutrality advocates.

Greenvissage Explains, How will the PM-WANI scheme revolutionise public Wi-Fi in India?

Imagine a world where everyone has access to the internet, regardless of their location or income. A world where everyone can connect to the global community, learn new things, and pursue their dreams. This is the vision of PM-WANI, a groundbreaking initiative by the Government of India to revolutionize public Wi-Fi access in the country. PM-WANI, or Prime Minister Wi-Fi Access Network Interface, is a framework that enables anyone to set up a public Wi-Fi hotspot and provide internet service to customers. This means that shopkeepers, tea stall owners, and even individuals can now become Wi-Fi providers, without the need for any license, registration, or fees. The scheme is a game-changer for India’s digital public infrastructure. It has the potential to expand Internet access to rural and remote areas, provide an affordable and convenient option for Internet access, and stimulate innovation and competition in the Internet market.

The PM-WANI ecosystem comprises four essential elements. Firstly, the Public Data Office (PDO) which are responsible for establishing, maintaining, and operating Wi-Fi hotspots and providing last-mile connectivity to users by procuring internet bandwidth from telecom or internet service providers. Secondly, the Public Data Office Aggregator (PDOA) provide aggregation services like authorization and accounting to PDOs, facilitating them in offering services to end-users. Then there are App Providers who develop applications to register users, discover and display PM-WANI-compliant Wi-Fi hotspots, and authenticate potential users. Finally, there is a Central Registry that maintains details of App Providers, PDOAs, and PDOs, currently managed by the Centre for Development of Telematics (C-DoT). As of November 2022, the PM-WANI central registry reported the existence of 188 PDO aggregators, 109 app providers, and a remarkable 11,50,394 public WiFi hotspots.

PM-WANI is an integral part of India’s Digital Public Infrastructure (DPI), which aims to empower citizens and improve lives by enabling digital inclusion. DPI comprises three critical layers: market, governance, and technology standards. The initiative offers several benefits, including expanding internet access in remote areas, providing an affordable option for internet access, and stimulating innovation and competition in the market. However, it also presents challenges related to ensuring Wi-Fi quality, security threats, potential revenue loss for mobile telecom companies, and operational challenges in low-demand, high-cost areas. India has already made significant strides in developing foundational DPIs, including Aadhaar, Unified Payment Interface (UPI), and CoWin. These initiatives, built on the Data Empowerment Protection Architecture (DEPA), form the foundation for an effective DPI ecosystem. The approach of DPI has resulted in reduced development costs, diverse applications, and a democratic, non-monopolistic system with scalability.

Greenvissage explains, Why is RBI discontinuing the Incremental Cash Reserve Ratio?

The Reserve Bank of India (RBI) has made a significant announcement regarding the discontinuation of the Incremental Cash Reserve Ratio (I-CRR) in a phased manner. This move is strategically designed to manage liquidity within the banking system smoothly and avoid sudden shocks to the financial system. The plan to discontinue the I-CRR will be executed in stages, releasing 25% of the impounded funds in the first and second stages, and the remaining 50% in the third stage. This gradual approach ensures that banks maintain ample liquidity to meet the anticipated surge in credit demand during the upcoming festival season.

The introduction of I-CRR was an essential step taken by the RBI following the monetary policy announcement and the demonetization of INR 2000 notes. This policy required banks to maintain a 10% I-CRR on the increase in their Net Demand and Time Liabilities (NDTL). The NDTL is the difference between the sum of demand and time liabilities (deposits) of a bank and the deposits held by other banks. The introduction of I-CRR was a response to the excess liquidity in the banking system resulting from various factors, including demonetization, surplus transfers to the government by RBI, increased government spending, and capital inflows. This surplus liquidity had the potential to disrupt price and financial stability, necessitating effective liquidity management. The I-CRR measure was projected to absorb over INR 1 lakh crore of excess liquidity from the banking system, which temporarily caused a liquidity deficit in the banking system.

In understanding the significance of I-CRR, it’s essential to grasp the concept of Cash Reserve Ratio (CRR). CRR is the percentage of cash that banks are required to maintain in reserves with the RBI against their total deposits. It ensures the security of a part of the bank’s deposits and helps control inflation by regulating the flow of money in the economy. During unique circumstances such as demonetization, the RBI chooses to implement I-CRR as a tool to manage sudden influxes of liquidity effectively. I-CRR allows the RBI to address the issue swiftly without disrupting other aspects of monetary policy. It can be introduced and phased out relatively quickly, making it a suitable temporary measure for absorbing excess liquidity during unique events.

Apart from I-CRR, the RBI employs various monetary policy instruments, both qualitative and quantitative, to manage the economy. Qualitative tools like moral suasion and direct credit controls influence banks’ lending behaviour and credit flow to specific sectors. Quantitative tools like CRR, repo rate, reverse repo rate, bank rate, open market operations (OMOs), liquidity adjustment facility (LAF), marginal standing facility (MSF), and statutory liquidity ratio (SLR) provide a more direct influence on liquidity and interest rates, aiding in effective monetary policy implementation. Each of these instruments serves a specific purpose in managing liquidity, credit flow, and ultimately, the overall health of the economy.