With the 5G rollout already happening, serious policy consideration of allied regulatory issues is no longer an ‘if’ but a ‘when’. Although countries like the US and South Korea have successfully implemented 5G rollouts on smaller scales, issues specific to the Indian subcontinent will be unique and need special consideration.
On one hand, we have issues surrounding the standard setting process. India has adopted the TSDSI RIT standards as opposed to the globally adopted 3rd Generation Partnership Project (3GPP) standards. While TSDSI seems more suitable for the Indian scenario given India’s huge rural community, its adoption also means that comparative studies of the 5G regulation will be more difficult. On the other hand, we have issues surrounding the pricing and allocation of spectra. While the telecom giants like Airtel and Jio have been protesting (see here and here) against the high spectrum fee, it is yet to be seen who bears the high setup cost of 5G infrastructure in India. In this post, however, we shall be discussing neither of these issues. Instead, we shall focus on the access issues that are about to arise once 5G has been rolled out.
The
euphoria called 5G
The whole of the telecom industry
is euphoric about the 5G rollout and the futuristic opportunities it might
bring with it. In anticipation, telecom giants are already entering into
strategic alliances to reap the benefits of the 5G rollout. Bharti Airtel and Tech Mahindra, for example, have come together in a
partnership where Airtel demonstrates and tests 5G and Tech Mahindra builds
5G applications and platforms. Jio is already in talks with
Samsung for a technology partnership over 5G. Vodafone Idea has already announced a 5G
partnership with Ciena, a US-based company.
The euphoria of these
telecom giants is well-justified. 5G brings with it a number of enhanced
capabilities that promise to widen the possibilities of the 5G network as a
platform. 5G promises enhanced
mobile broadband (eMBB), ultra-reliability and low latency (uRLL), massive
machine-type comms (mMTC), and network slicing inter alia which opens up
numerous possibilities for VR, AR, and IoE/IoT applications. While the previous
networks like 3G and 4G primarily involved B2C transactions, 5G opens up
possibilities for multiple B2B transactions.
Ensuring access: Antitrust vis-a-vis Net Neutrality
Amid all these B2B
opportunities, there exist certain issues that will be needing regulatory
intervention every once in a while. One of such issues is ‘access to the
network’. With 5G networks undertaking critical functions such as healthcare
and agri-assist, access to the network will be a necessary prerequisite for a
free and fair marketplace. Also, such access will become even more
indispensable once 5G networks start supporting smart cities. Once 5G becomes
ubiquitous, regulating ‘access’ to the network will become a key consideration
in deciding how the cost of staying
connected gets allocated.
Fortunately, we, in
India, happen to have at least two regulatory mechanisms that can intervene to
ensure such access - two otherwise distant regulatory regimes that happen to
share uncanny similarities when taken a closer look. For one, we have the
Competition Commission of India (CCI) which is entrusted with promoting fair
trade by regulating instances of market power and abuse thereof, inter alia. On
the other hand, we have the Telecom Regulatory Authority of India (TRAI) which
has the subject matter jurisdiction to regulate the telecom industry in India. In
July 2018, the Department of Telecommunications made rules favoring Net
Neutrality (which were claimed by BBC to be the world’s strongest!) which can be a keystone in ensuring access to networks. And
so are the Competition Act of 2002 and allied rules.
Prima facie, it may
be difficult to grasp the common grounds between antitrust law and net
neutrality principles. However, looking at the historical background against
which the net neutrality principles were developed, it is easy to draw the
connections. Starting from the Common Carrier principle in 2003 when net
neutrality was summarised as “a structural requirement that would prevent
broadband operators from bundling broadband service with Internet access from
in-house Internet service providers” (source), net
neutrality has always been focused on preventing abuse of market power. Net
neutrality revolves around the notion of ‘indiscriminate routing
of network traffic irrespective of the data type’, and
this has helped keep the internet an ‘equal platform’ that protects innovations
and preserves openness. It is this openness that has made the internet flourish.
The two foundational
principles of net neutrality, namely ‘transparency’ and ‘no discriminatory
blocking/unreasonable restrictions’, can be directly mapped onto corresponding
antitrust provisions. Antitrust also requires transparency and disclosure to
avoid information asymmetry and is
very alert to flag discriminatory restrictions that may create market entry
barriers. With the advent of 5G networks and allied access issues, it is
pertinent to note that the responsibility to ensure equitable access will be both
on the CCI as well as the TRAI. Is that good news? Or bad news?
Over-regulation vs. Under-regulation
In most worldly affairs, the more the merrier. However, that is not the case with
regulation. Nor with jurisdiction.
When we have more
than one regulator for any given set of problems, it often results in either
over-regulation or under-regulation. Over-regulation kills the competitive
spirit in the market. Also, it may lead to too much interference with the
market forces which can lead us to a market failure. Under-regulation, on the
other hand, leaves the market forces to themselves, which often leads to the accumulation of market power and abuse thereof. Under-regulation, just like
over-regulation, runs the risk of an inevitable market failure.
In the recent past,
we have seen multiple instances of under-regulation where the subject matter
concerned multiple regulators. The most pertinent example would be the case of
consumer privacy on digital platforms/spaces. On the face of it, it was for the
privacy officials to be concerned therewith. However, as multiple competition
authorities have admitted lately, it was also a competition concern that needed
regulation by the competition authorities. The consequential under-regulation
that involved competition authorities shifting the
responsibility to privacy officials (see In Re Vinod Kumar Gupta
and WhatsApp) and vice versa is a classic example of how ‘the more is not
the merrier’ when it comes to regulation.
Instances of
over-regulation and resultant disputes are rampant, too. CCI has had a long
history of conflicts with other sectoral regulators including the TRAI and RBI.
The Supreme Court judgment in Competition Commission of India v. Bharti Airtel doesn’t
seem too clear, either, to put these conflicts to rest.
Regulatory
Convergence: The way forward?
Multiplicity of regulators is not a
new challenge by any count. The Financial Sector
Legislative Reforms Commission’s Report pointed this out way back in 2013.
However, this old challenge will have to have a new, or at least innovative,
solution. With the IT and Telecom sectors booming at an unprecedented rate,
it’ll be disastrous to leave them under-regulated.
The regulatory tussle that we might
witness is not going to be unique to India. For example, the United Kingdom’s concurrency model might look good in theory but has very little evidence to speak for itself. Other countries across the
globe are either already facing such a challenge, or are bound to face it soon.
Amid all this regulatory chaos, maybe it is time for a new regulatory theory -
one that attempts at regulatory convergence.