Accelerating Growth of Internet and Broadband Penetration
Review of a Govt of India Consultation Paper | A Media Policy Project by Sadia Tabassum
Background and History of TRAI
Telecommunications Regulatory Authority of India authority has been established under Section 3 of the
Telecom Regulatory Authority of India Act, 1997. It has a fivefold function i.e. (a) promotion of efficiency
and competition (b) regulation of service providers (c) tariff fixation (d) laying down of standards for quality
of service and (e) establishing and implementing universal service obligations. While originally the above
functions were to be discharged with regard to the telecom sector alone its reach has now been widened
to discharge the above said functions with regard to both broadcasting and cable services
Telecom Regulatory Authority of India, TRAl’s mission is to create and nurture conditions for the growth of
telecommunication including broadcasting and cable services in the country in a manner and at a pace
which will enable India to play a leading role in the emerging global information society. The goals and
objectives of TRAI are focused towards providing a regulatory regime that facilitates achievement of the
objectives of the Telecom Policy of Govt. of India.
Before going in the context and details of the paper I would like to draw your attention towards the
contradictions and ambiguities which our TRAI Act, 1997 clearly shows. According to the Act, TRAI can
recommend certain actions and play an adjudicating role regarding certain others. For eg:
- Though it’s been given certain functions such as “ensuring technical compatibility and effective
interconnection between providers” and “regulating arrangements among service providers of
sharing their revenue derived from providing telecommunications services” BUT how precisely it
has to discharge these functions is not clear.
- Similarly it can call for any information from any service provider “relating to its affairs as the
Authority may require but what exactly it can do if the service provider refuses to furnish such
information is not made clear. This is a glaring omission, since one of the service providers is
DOT, an arm of the government itself. TRAI can not revoke any license of an operator if the
operator fails to conform to some standards of service; it can only make a recommendation to the
government. If the defaulting service provider is the DOT itself, such a recommendation makes
- Licensing is also not within the purview of TRAI, although it was to, as one of its functions,
recommend the terms and conditions of licenses to a service provider. It tried to issue directives
DOT regarding the terms and conditions of licenses for private service providers, but even this
was challenged by DOT on the Delhi High Court. Arguing that licensing is a sovereign prerogative
of the government, DOT won the case. Thus TRAI can not play any role in defining the terms
under which DOT can issue licenses to its own competitors.
- The Act laid down that TRAI could notify in the Official Gazette the domestic and international
tariffs, but when it did so, involving substantial reductions in the long distance charges but
increases in the rentals and local call charges, including those from villages, there was a furore in
the parliament, many Members of Parliament argued that tariffs setting is an issue of public policy
and hence within the domain of the government. Eventually, the government rolled back the
increases, retaining the reductions.
- The Act also contains a provision30 that the government can issue to the Authority “such
directions as it may think necessary in the interest of sovereignty and integrity of India, the
security of the State, friendly relations with foreign States, public order, decency or morality”. In
fact it goes further in Clause 25(2) wherein it is laid down that “without prejudice to the foregoing
provisions, the Authority shall, in exercise of its powers or the performance of its functions, be
bound by such directions on questions of policy as the Government may give in writing from time
to time”. Thus it is not the regulator who can issue directions to the operator, but the other way
Context for the Paper Under Review
Early 2000 was the time when there was an IT boom in the whole world and India has seen rapid growth
in the business process outsourcing (BPO) model. Main focus of the the country was to establish itself as
a knowledge-based society. After the successful penetration of telecommunication and cable TV in India
broadband and internet access were widely recognized as catalysts for economic development of a
country in the long run.
It is clearly evident that adoption of Internet can accelerate business productivity, thereby generating
income, jobs and government revenues in emerging economies, like ours but how much more time will it
take in doing so is still a BIG question because we can not deny the fact that currently India has the
largest illiterate population in the world.
Literacy in India is increasing at a sluggish rate of 1.5 per cent per year, says a report of the National
Sample Survey Organisation (NSSO)-2008. India's average literacy rate is pegged at 65.38 per cent.
What I am trying to say here is that nobody can deny the fact that the internet penetration is essential to
the country to grow in several dimensions as stated in the paper but for that first we need to work on
several other factors also especially in rural India.
Paper describes the condition of internet in 2003 and further appraises the past work in this space and
the recommendations from that effort. Next, the paper discusses the major policy, and fiscal and other
incentives employed by a couple of other countries to successfully spur growth. Also examined are
lessons from domestic successes. The paper also looks at various methods, including technologies,
which were prevalent in the market and discusses the various options that India could adopt in order to
get the better results.
When the government announced the ISP policy in November 1998 to facilitate and encourage entry of
private sector operators and others as Internet Service Providers and applied various techniques like cost
reduction, introduction of innovative packages and increase in PC penetration etc the subscriber base
grew at rates near 200%, but it remained almost stagnant since then and during 2003 growth rates have
gone from 55% to negative levels, which was a matter of concern.
This paper clearly states “Infrastructure for Access”, “Access Device”, and “Content” as the main and only
drivers of internet penetration which I doubt is not completely true. In a developing country like India
several other factors are walking along at the same pace.
Paper defines what qualifies as broadband, its importance in bringing out the revolutionary change in
economic and social sector. It also emphasized on deciding goals regarding internet penetration for at
least five years like china did.
Policy makers tried to cite the examples of the successful penetration of telephony and cable TV services
in the country as a good example of how internet usage can also penetrate but the point which is to be
noted here is that cable, telephone and internet are not the same things. Internet is different in the kind of
operational skills it demands and the kind of needs it caters.
It is ironical that India, the world's fastest growing telecommunications industry with a second largest
population of 1.1 Bn has just 7% of Indians connected via the internet. USA is ranked 28th in the world in
connection speeds with a speed of 5 .1 Mbps while India is still struggling with 256 kbps as broadband.
As it’s been seven years since the policy was introduced we do not have the kinds of results that the
paper expected. I feel that they assumed a lot and neglected the core problems which are still the hurdles
to the growth of internet in our country like illiteracy, limited access in rural areas, basic knowledge of how
to operate the system etc. Paper discussed content as one of the hurdles to the growth of internet, which
still is if we see the government websites. They are still not very well formed and do not have much
Other Papers on the Internet
- TRAI Consultation Paper on Introduction of Internet Telephony-23 Nov 2001
- Consultation Paper on QOS of dialup Access Network for Internet- 8 Oct 2001
- Broadband policy 2004
- After 2004 also TRAI has released a number of papers on Internet and Broadband issues
which we can access at its website.
- Consultation Paper on Accelerating Growth of Internet and Broadband Penetration
- The Telecom Regulatory Authority of India Act, 1997