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From Google to Modi

In an interview with Forbes India earlier this year, Rajan Anandan (Head of Google India) highlighted four internet policy issues that, in his opinion, the new government needed to urgently address. His prescriptions deserve some context and elaboration for the sake of clarity and emphasis.

Broadband Connectivity

Rajan Anandan identifies two main problems—TRAI recognises internet speeds of 512 Kbps (until recently, even 256 kbps) as ‘broadband’; secondly, most Indian subscribers are on narrowband networks. For a country aspiring towards digital supremacy, this is shameful.

TRAI counts both, ‘dial-up’ and ‘broadband’ users to arrive at the total number of internet users in India (251 million as of March, 2014). Unfortunately, this obfuscates the actual effort required to reach the targets outlined in the National Telecom Policy.

According to recent estimates, the average broadband speed in India is 2 Mbps. Whether this figure is accurate is not, it is certainly a reasonable expectation to have given current international trends. A comparison of India’s average speed with other countries in Asia highlights just how much it lags behind.

Broadband Speed - Asia

(Source: AKAMAI: The State of the Internet Report, 2014)

It also seems like the government will be unable to meet its revised deadline for completion of the National Optical Fibre Network (NOFN) project, which seeks to connect 2,50,000 villages through 100 Mbps connections. Emissaries of the ‘Digital India’ campaign really have their work cut out for them.

IT Act and Innovation

From the perspective of innovation and entrepreneurship, Rajan Anandan’s advice is not radical. For a long time, a lack of clarity on the scope of safe harbour protections afforded under the IT Act has been a source of concern for entrepreneurs in India. The MySpace decision served a crushing blow when, in 2011, it held that websites would not be protected if its users posted content infringing copyright, even if website owners take down the unlawful content expeditiously. With such unreasonableness in regulation, it seems like a good time to completely rethink intermediary liability in India.

This anomaly was hastily plugged by amending the Indian Copyright Act to include an exception for ‘transient or incidental storage’ under Section 51(1) (b) and (c). What’s unfortunate is that the government has made a habit of issuing ‘clarifications’ to correct its mistakes (for example, on the applicability of the Privacy Rules, or the content removal process under the Intermediary Guidelines).

With such uncertainties, Rajan Anandan is right to point out that Indian start-ups will end up with “all lawyers, no product”. Piecemeal law-making is detrimental to the aim of making India a hub for technological innovation and it might be wise for the new government to consult stakeholders and experts to draft sensible law and policy the first time round.

Google-Modi

FDI in e-commerce

E-commerce in India has received a lot of attention recently. Online retail companies have received huge investments (Flipkart raised $1 billion, Snapdeal received an undisclosed sum from Ratan Tata) and the future looks bright for online travel, entertainment and healthcare.

But there are some significant legal issues at hand. Under current regulations, a company engaged in the activity of single-brand retail trading is not permitted to have foreign direct investments (FDI) (see the applicable regulation). Such companies are permitted to engage in business-to-business (B2B) e-commerce only, i.e. they cannot sell to customers directly. Presently, Indian e-commerce entities have gotten round this restriction by employing the ‘marketplace’ model through complicated structures, even as the Enforcement Directorate investigates possible violations of the Foreign Exchange Management Act (FEMA). The current FDI restrictions might eventually play spoilsport for Alibaba, Amazon and other successful companies looking to make strategic investments into India.

Liberalising FDI norms, as Rajan Anandan suggests, will certainly help Indian e-commerce. But a lot will depend on the government’s take on the larger issues at play. Will e-commerce kill brick-and-mortar shops? Can it spread to rural areas and increase consumer choice? Should some proportion of goods be locally procured? These are questions that the Modi government will have to deliberate upon and decide soon, even as international internet companies lobby for a more permissive regime.

Internet Governance

Rajan Anandan’s final recommendation speaks to how internet policy should be crafted, rather than what it should be. He advocates for a multistakeholder model of internet governance, which is to say that all stakeholders (government, businesses and civil society) should be given a seat at the table and an equal voice in the decision making process.

This is different from a multilateral approach, where governments have a supervisory role. In the past, the Indian government has supported the establishment of a U.N. Committee on Internet-Related Policies (UNCIRP) in order to democratise internet governance, which many believe is dictated by US government and private interests.

In recent times, the Indian government appears to have diluted its stand on government-led policy formulation and encouraged participation from the private sector and civil society. In a note to the Prime Minister’s office, the Department of Electronics and Information Technology (DeitY) argued in favour of a multistakeholder model ‘to leverage India’s strength in industry and human resources’. While this is encouraging, there are equally strong arguments in favour of a multilateral approach. If it is true that the US government has pressured stakeholders in India, including the IT industry and civil society to influence internet policy decisions, the Indian government must be careful in how it solicits feedback from such stakeholders.

The DeitY recently constituted a ‘Multistakeholder Advisory Group’ to acts as a recommendatory body on Indian internet governance issues and to help build consensus amongst stakeholders. While this is also encouraging, the worry is that the exercise will end up favouring form over substance. At a time where issues such as mass surveillance, net neutrality and free speech have captured the world’s attention, there is nothing more disappointing than structure that does not contribute to function.

About Amlan Mohanty

Amlan is a lawyer based in India. He has been writing about technology and intellectual property for the last five years.