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“Convergence of Internet and Television – A Legal Perspective”

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  1. 1. 1 A Dissertation on“Convergence of Internet and Television – A Legal Perspective” By Shashikant Bhagat Nalsar Pro ID No. MLH39_09 A Project Paper Submitted in Partial fulfillment of P.G. Diploma in Media Laws for Module – III (Convergence & New Media) January 2010 Nalsar University of Law (Nalsar Pro), Hyderabad
  2. 2. 1 Table of ContentsSr. Heading PageNo. No.01. Introduction: 4-6 Telecommunication and ‘New’ IT02 IT in India: A History 6-703. New Computer Policy-1984 8-904. On Demand: The Future of Indian Broadcasting 10-1205. Future of Indian Television Broadcasting 13-1406. Internet Telephony and Related Issues 15-2407. Communication Convergence Bill’ 2001 25-3208. Conclusions 33-3309. Bibliography 34-34
  3. 3. 1INTRODUCTIONTelecommunication and ‘New’ Information Technologies
  4. 4. 1From Stand-Alone Technologies to ‘Convergence’The concluding decades of the 20th century witnessed revolutionarydevelopments in the mass media, telecommunications and informationtechnologies. The old mass media technologies were stand – alone isolatedtechnologies: radio, television, cinema, the press and book publishing werelooked upon and used as distinct and discrete technologies.Telecommunications (primarily the telegraph and the telephone) developed ontheir own, and were never considered as ‘mass media’. A computer was just acomputer, a telephone was just a telephone and a television set just a box in thecorner for watching broadcast programmes. This separate and stand – aloneidentity was reinforced in government administration, where the ‘mass media’.Telecommunications and computer technologies were under three differentministries: Information and Broadcasting, Department of Telecommunications(DoT), and the department of Electronics. This was further reinforced in theIndian university system where departments of communication and journalismremained isolated from developments in telecommunications and computerscience, which of course had their own separate departments.Besides, ownership of such technologies too was generally restricted to one ortwo of the media. In Europe and the developing countries, radio and televisionwere government –owned and government-run, though the press and bookpublishing remained the responsibility of the private sector. Film-making was inboth the public and private sector: the feature film industry was in private hands,while newsreels, documentaries, short films and animation films were theresponsibility of the public sector.Few attempts were made to combine the different print and electronic media;cinema films were shown on the small screen with the help of a ‘telecine chain’(an electronic device which can transfer film material to standard TV format), butone could not read the newspapers on television, or listen to the radio ontelevision. The ‘two-in-one’ combined the radio and the audio-recording andplayback technologies. The video-recorder was an add-on to television and tobeginning of the asynchronous element in the new media. No longer were
  5. 5. 1listeners and viewers tied down to the exposure of radio and TV programmes atthe same time as others; this greater control of the electronic media wasgradually leading to the ‘de-massification’ of the media. The audio and cassetterecorders, the walkman, and later the personal computer were further examplesof greater audience control over content, as well as over the time and place ofmedia exposure. The earlier concept of a ‘mass audience’ was giving way to anewer concept which took into account factors like flexibility and asynchornicity.Further, in telecommunications, the telephone and the telegraph remainedisolated from the mass media, except as ‘carriers’ of information. Audio andcassette recording and playback technologies extended radio and television,giving them the facility of ‘delayed’ or flexibility exposure. Simultaneity oflistening and viewing gave way to media access at one’s convenience.Communication satellites, cable, optical fiber, wireless technologies andcomputers changed the very nature of mass media and telecommunications.When the computer appeared on the scene in the 1970s and 1980s, it was astand – alone desktop technology; interactive, but discrete. Computers could not‘talk’ to each other; compatibility was a critical stumbling block. Apple-Macs,Apricots, Tangerines, Amstrads and IBMs were often incompatible, and couldnot read or understand one another. Magnetic tapes and later floppy disks hadto be used to transfer or copy data or graphics from one computer or another.The ‘modem’ (an abbreviation of ‘Modulation’ and ‘Demodulation’) revolutionizedthe entire stand-alone approach. It is an electronic device, which changesanalogue to digital signals and vice versa. It brought together the media, thecomputer and telecommunication technologies so that computers in differentparts of the world could start ‘talking’ to each other using the internationaltelephone networks and the supporting satellite and cable hardware. Electronicmail (or e-mail) and the Internet with its world wide web were developed in quicksuccession. Convergence of the various media, computer andtelecommunication technologies now became possible, reaching its acme in themulti-media systems so common today for the transfer and exchange ofinformation, data, graphics and sound. One could now watch films and video onthe computer screen, or surf the internet on the television screen. One couldalso use the computer for sending and receiving fax messages, electronic mail,for surfing the internet, and even using the Net Phone for phoning and tele-and
  6. 6. 1Video conferences. Cable telephony Digitization was the key here, aided byminiaturization, wireless telephony, digital compression, and comparatively low-costs and user-friendliness.Information Technology in India: A HistoryIndia did not lag behind in the introduction of the new technologies though theprogress was tardy, and largely restricted to the elites in urban areas, and toteachers and researchers in national science and research institutes. The firstcomputers to be installed science and research institutes. The first computers tobe installed in India were imported in the 1960s and 70s. Most were second andthird generation IBM mainframes using transistors. The major importers weregovernment departments and large corporations. By 1978, India had 800mainframes maintained by the public sector company, Computer MaintenanceCorporation (CMC), after the withdrawal of IBM. The decade also saw theemergence of a few Indian producers: ECIL, ICIM, Bull-PSI, and others.Developments in micro computing, the convergence of computer controls withtelecommunications, communication satellites, fiber optics and digital switches,as well as liberalization in import policies, let to the rapid growth of the computerindustry in India. Though all the while it remained ‘an assembly-orientedindustry’. The mushrooming of computer training institutes and university degreecourses in computer science provided the much-needed personnel needed forcreating the software and maintaining the hardware in the growing industry.
  7. 7. 1New Computer Policy – 1984The Rajiv Gandhi government initiated the ‘information revolution’, opening upthe Indian market to foreign investors; gradual privatization and deregulation offirst telecommunications and later other industries, reducing import and exciseduties on electronic goods, computer hardware and software, and providingother incentives to the development of the information industries. The man RajivGandhi chose to lead the revolution in telecommunication was Sam Pitroda, anon-resident Indian technocrat who had made good in the United States, andwho passionately believed that India could leapfrog into the age of information, ifonly it embraced the new information technologies.He was appointed Chairman of the Telecommunication Commission, and latertelecommunication adviser to the Prime Minister. He established the Centre forthe Development of Telematics (C-DOT) which would design and fabricatedigital automatic switching equipment for rural (RAX) and urban (MAX)telephony. Pitroda lived up to his reputation of getting things done, but in theprocess he trod on many bureaucrats’ toes. One section of the media wowedhim; the other lambasted him for the hype he created about the potential of tele-communications for the nation’s development. Pitroda shared Rajiv Gandhi’svision of a modern India competing with advanced industrialized nations in thenew age of information, the post-industrial age. However, while urban India wasswamped by multinational brands of consumer goods, the latest hardware andsoftware, value-added services like cellular telephony, paging, and a plethora ofcable and satellite channels, the rural areas and the urban poor were untouchedby such happenings. Liberalization and re-structuring of the economy in theearly 1990s both under the Congress and the United Front regimes, so as topromote foreign investment and private business, re-enforced this urbanapproach. Leftist economists dubbed this approach an instance of ‘selling out tothe multinationals’. On Demand++
  8. 8. 1 The Future of Indian BroadcastingNew technologies in broadcasting are revolutionizing the viewing experience.Increasingly viewers are becoming empowered to define what entertainmentcontent is delivered to their TV screens at what time. Broadcasting schedulesare becoming meaningless by the day.Personal Video Recorders (PVRs) are making their way into the Indian market.Take Tata Sky’s recently launched Digital Video Recorder (DVR) service – TataSky Plus. The DVR allows a viewer to watch one channel, while simultaneouslyrecording a program running on another channel. The DVR also has a host ofother features – like recording any program while you’re asleep or at work oreven recording the entire series of your favorite show.So no more waiting up till 2 am to watch that movie you’ve been waiting to see.No more having to miss your favorite show because you get late at work. Andbest of all, no need to fight over the remote. The DVR even lets you pause, re-wind, forward, and re-play live TV.According to Mr. Vikram Kaushik, Managing Director and CEO of Tata Sky Ltd“The introduction of PVR technology will revolutionize the TV viewing experiencein India. The PVR’s recording and playback features will allow our subscribers totime-shift their TV viewing, and thanks to the pause and rewind features,viewers can be sure that they won’t miss any of their favorite shows any more,and that they can catch all the action in live TV broadcasts.” While the DVRgives Direct-to-home (DTH) provider TATA Sky a momentary edge over thecompetition, it isn’t long before they catch up with their own DVRs. In fact,leading multi-system operator in the digital cable segment – DigitalEntertainment Network (DEN) Ltd. – planning to introduce a DVR service nextyear. “On demand is the future,” said Mr. Anuj Gandhi, CEO, DEN.A whole new level of interactivity is being introduced with digitization of TVnetworks. While the TATA Sky Plus DVR makes its way into homes across thenation, video-on-demand is a feature that is prevalent across all distributionplatforms i.e. DTH, digital cable and Internet Protocol Television (IPTV). Video-on-demand lets viewers order particular movies available on their serviceprovider’s library. The movie can be downloaded for a small fee and thenviewed. Video-on-demand as a segment is expected to experience significant
  9. 9. 1growth in India within the next five years. On demand services providing accessto games and music are also proving to be a popular feature of distributionplatforms.The concept of ‘Pay-per-view’ is popular in the West and has immensepotential in India. The country’s pay-per-view sector is expected to grow at anannual rate of 16 percent to cash in US$ 11.3 billion worth of revenues by 2012.Many TV service providers are focusing on their pay-per-view channels and thebouquets of movies offered in order to attract customers.With a burgeoning Indian film industry, producing 1000 movies a year, video-on-demand and pay-per-view are turning out to be lucrative business opportunitiesfor distribution networks.-----------------------------------------------------------++ This article has been picked up from website and written by Mr. Vipul Mehra on dated 28th December’ 2009 and the link is:
  10. 10. 1 Going Digital** India’s Cable TV industry set for DigitizationWith the revolutionary transformations taking place in the television contentdistribution market, soon viewers all over India will be able to enjoy the benefitsof watching movies and TV shows, surfing the Internet and making telephonecalls without leaving the comfort of their sofas and television screens.The Telecom Regulatory Authority of India (TRAI) recently issued a set ofrecommendations to the Ministry of Information & Broadcasting mandating everycable network operator to transmit digitized quality video to every home by 2012,thus making possible the delivery of a host of services including Internet accessand telephony via Cable TV.Transition Phase: Analog to DigitalCable TV penetration by the end of 2007, had reached 78 million out of 130million homes in India. The cable TV sector has experienced phenomenalgrowth over the last few years and still has massive growth potential.Currently, cable TV transmission in India is predominantly analog and is limitedto providing only TV channels. Analog doesn’t lend itself well to technologicalupgradation either. With stiff competition from advanced distributiontechnologies such as direct-to-home (DTH), headend-in-the-sky (HITS), andInternet Protocol TV (IPTV) offering TV channels, broadband and telephoneServices, the local cable TV operator is going to find it difficult to sustain hisbusiness with analog transmission.The TRAI recommendations include a provision for existing registered cableoperators to digitize their transmission over the next five years, and over threeyears for new entrants.Digitized networks have the capacity to offer a two-way path allowing broadbandand thus, ‘triple-play’, which includes services such as cable telephony, video-
  11. 11. 1on-demand and Internet surfing facilities, thus allowing cable operators theopportunity to compete with the likes of DTH and IPTV.Major Trends: Competition and ConsolidationHuge investments in technology are required for upgrading to digitaltransmission and last mile cable operators all over the country are beingincreasingly compelled to tie up with triple play service providers or Multi-ServiceOperators (MSOs) to enable digital two-way interactivity.Five major MSOs have emerged in this segment acquiring a national presencethrough mergers with and acquisitions of last-mile operators or by turning theminto franchisees. These are the Raheja group’s Hathway Cable & Datacom, theEssel Groups Wire & Wireless India (WWIL), the Hinduja Groups IndusIndMedia, DEN Digital Entertainment Network (set up by GBN founder SameerManchanda and Network18 chief Raghav Bahl) and Digicable Network India (setup by Jagjit Singh Kohli). These five collectively access over 20 million homesi.e. a quarter of the country’s cable TV subscribers.Hathway has bought 51 per cent stakes in Bhaskar Multinet, the cable wing ofthe Dainik Bhaskar Group, and Gujarat Telelinks, and acquired MarathwadaCable Network in Aurangabad. Digicable has recently acquired a 51 per centstake in the Kolkata-based CableComm to expand in the eastern region of India.WWIL, which already has a presence in 43 cities, is the only player in the marketcurrently to offer HITS (Headend-in-the-Sky) having acquired a license for ityears ago. HITS is a technology that enables delivery of multi-channel televisionsignals to cable operators who can downlink these from a HITS satellite andpush them to their subscribers via a set top box. This is a more cost-effectivemethod of achieving digitization since it doesn’t require too much investmentfrom the cable operator who merely has to equip homes with the set top box andbecome a franchisee.Competition in the cable TV segment is intensifying as the battle over acquiringthe last mile cable operators continues. New players like Asia Net and YouTelecom are also entering the fray. You Telecom is said to have committed Rs.120 (US$ 24 million) crore towards its digital cable business expansion.
  12. 12. 1Rising InvestmentThe fragmented and unorganized cable TV sector has attracted little investmentin the past, even though it is a profitable sector generating annual revenues ofover Rs.10, 000 crore (US$ 2 billion). This is primarily due to massive under-reporting of subscriber numbers having an adverse impact on the broadcastersrevenue. Consolidation in the industry is attracting the attention of private equityplayers, as the scattered cable TV operators come together to form meaningfulcorporate entities.The cable TV sector will come under a proper licensing mechanism where city,state or national licenses can be bought. The TRAI recommendations are a bigstep forward in ensuring effective licensing compliance, digitization of networksand attracting investment. Collectively, the industry is said to be investing closeto Rs 500 crore (US$ 103 million) on digitization.The Way ForwardThe cable sector is emerging as a very attractive space owing to the TRAIrecommendations and the clear edge of digital cable over its competition likeDTH and IPTV in offering a larger number of channels, greater reliability even inadverse weather conditions and easier access to cheaper after-sales andcustomer services.According to reports of Informa Telecoms and Media Group and Media PartnersAsia (MPA), India will overtake Japan, Australia, Hong Kong and South Korea tobecome the second largest digital cable TV home market in the Asia PacificregionHowever these growth plans largely depend on factors like having a more liberalFDI policy for cable operators, a focused plan for digitization, greater clarity onHITS guidelines and a licensing framework for last mile cable operators.--------------------------------------------** This article has been picked up from website by Mr. Bunny Sidhu on dated 28th December, 2009 and the link is:
  13. 13. 1Future of Indian Television Broadcasting+*It definitely appears bright; the potential is immense. The number of TV owninghomes has a long way to go; only 70 million TV households have been accountedfor so far; an equal number have to own TVs as yet. Ad spending on the medium isa pittance compared to the amount spent in smaller TV markets globally. Theamount of TV being watched is also not enough; Indians have to watch almosttwice the amount of TV they are watching currently to match US viewing habits.The major issue about Indian television: one does not know which it way it will go.Will the net be the medium of delivery of television? Or will television be deliveredas it has been over the past few years via terrestrial, satellite or wirelesstransmission to be watched on traditional television sets? Or will it be watched onhandheld devices? A lot of hype has been created around broadband Internetdelivery of television to Indian TV or computer homes. (Technology convergence istaking place globally; the latest takeover of Time Warner by an Internet companyAOL is an indicator of that transition. AOL will in all likelihood exploit all theproperties that Time Warner has on the Net and other modes of broadbanddelivery.)The current cable TV infrastructure in India is far-too- rickety with MSOs having littlecontrol over the state of the fibre as it gets into consumer homes. The coax fibrehas not been laid keeping in mind two way connectivity and it also is not consistentall over the cable ops service area. For every cable TV home receiving a goodsignal there are at least another twenty homes receiving a bad signal. There is noaddressability, no transparency of operations as cable ops are averse to payinggovernment levies, and no real communication between cable TV ops andsubscribers. But there is no doubt that the cable operators have done a good job bybuilding up a cable and satellite penetration of 25 million homes all over India. Andthey have managed this in the past six to seven years as against the the telecombusiness which has been around for close to a 100 years with less than 20 millionconsumers. The telecom infrastructure also cannot support broadband delivery wellenough. Yes DSL and leased lines are an option but they are a rich mans choice.
  14. 14. 1Satellite delivery of broadband signals is one mode that can support broadbandInternet delivered television. Richard Lis Pacific Century Convergence Corp islooking at it closely and the footprint of its service will cover India. Direct PC has asimilar mandate for the Indian market. Pricing, however, will be a major issue hereas set top boxes will have to be purchased by consumers which they may not beopen to doing if price is too high.The penetration of computers is extremely low with about 3-4 million PCs being theinstalled base in Indian homes though computer sales have been rising rapidlythanks to lower prices. But it is unlikely to increase so fast so as to come evenanywhere close to the 70 million TV homes believes that television will be delivered the same way as ithas been so far through traditional modes. Its likely that the television populationwill cross 100 million homes in the next 10 years. The computer population will beabout 15-20 million in the next 10 years. However, some companies, televisionchannels and television producers will attempt video streaming or delivery of videothrough other compression technologies on the Internet. But it will only be anotheroption for consumers who will log on to watch a shaky picture at least for the nexthalf decade. Cyber kiosks will have sprouted all over India in small towns and itspossible that some consumers will log on to the Net to watch some shows whenthey want as payment gateways will have been set up.Most viewers will, however, be watching their TV mainly via cable, terrestrial anddirect to home television delivered via satellite. Cable TV infrastructure will haveimproved. Addressability also will have made its mark and consumers will besurfing their television sets for emails and for information. Free-to-air television will,however, continue to rule the roost but tiring will have made its mark and people willbe buying their pay per view programmes and choosing the channels they wantwatch unlike today when everything is thrown at them with a shovel.-------------------------------------------------------+* Article has been exactly picked up from on 28th December’ 2009 and the link is:
  15. 15. 1 Internet telephony and related Issues****The focus of the article is to examine the impact of the proposed CommunicationsConvergence Bill on e-commerce. The ambit of the paper is restricted to internettelephony as the novel and cheap method of communication and of conductingbusiness over the net. Internet telephony is of particular interest to organizationsengaged in business process outsourcing as it significantly cuts the costs ofcommunication. In the course of this paper the author would also analyse theguidelines and license issued by the DoT for providing Internet telephony servicesand discusses some of the emerging legal issues that are spawned by thisliberalization.INTRODUCTIONAfter several months of debate, on April 1, 2002, the Government of India finallypermitted Internet Service Providers (ISPs) to offer Internet telephony services.Earlier, the legal and regulatory framework in India did not permit ISPs to offerInternet telephony. Under terms of the ISP licence, telephony on the Internet wasbanned and if any ISP offered these services, the ISP licence could have beenterminated. After the opening up of this sector, the Department ofTelecommunications (DoT) has granted approvals and licences to severaltelecommunication companies to commence these services. Though the quality ofInternet telephony services may not be as high as the normal international longdistance services, their low cost will definitely attract more consumers. Further, withthe rapid advancement in technology, it is only a matter of time that the gapbetween the two forms of voice communication is bridged.-------------------------------------------------------------------**** This article, case and communication convergence bills has been taken from the website-, written by Mr. Dhruv Madan and link is:
  16. 16. 1WHAT IS INTERNET TELEPHONY?INTERNET TELEPHONY: THE CONCEPT(a) MeaningInternet Telephony is a form of Internet Protocol (IP) Telephony. IP Telephony isused as a generic term for the many different ways of transmitting voice, fax andrelated services over packet-switched IP-based networks. The basic steps involvedin originating an Internet telephone call are conversion of the analog voice signal todigital format (binary data) and compression/translation of the data into IP packetsfor transmission over the Internet; the process is reversed at the receiving end. Thisprocess is called modulation-demodulation, giving the term modem. Thecommunication usually takes place real time. Thus, the main difference betweenInternet Telephony and normal telephony is that whereas in normal telephony,circuit switching technology is used, Internet Telephony is based on packetswitching technology.(b) Difference between Internet Telephony and Voice-Over-IP:IP Telephony can be subdivided into two major groups: Internet Telephony andVoice-over-IP (VoIP), the difference being the type of the underlying IP network i.e.the medium of transmission. Internet telephony primarily involves the usage of theInternet rather than the Public Switched Telephone Network (PSTN) to transmitreal-time audio from one personal computer (PC) to another (or in some instancesto another telephone itself). However, in the case of VoIP, it is generally an IPtechnology suite (i. e. a private network) that is used rather than the public Internet.Another important distinction between Internet Telephony and VoIP is the quality ofthe transmission. Since VoIP is usually a closed / private network, the technicalhurdles are less daunting, which results in greater reliability in the transmission ofvoice packets than in Internet Telephony where the voice packets are transmittedon the Internet. Therefore, the chances of having a live or real-time conversationare better in VoIP than in Internet Telephony.(c) Methods of Internet TelephonyFollowing are the popular methods of Internet Telephony as recognized by theInternational Telecommunications Union (ITU)(i) PC to PC
  17. 17. 1Under this method, calls are transferred from one PC to another PC. No gatewaywith a PSTN is required, because calls are not switched by a PSTN. Rather, theprincipal medium of transmission is always the Internet.(ii) PC to Phone / FaxUnder the PC to Phone / Fax method, the conversion of speech into packets takesplace on the originating users PC. The process is reversed at an InternetTelephone Service Providers (ITSP) gateway server, which then dials the calledparty’s telephone number and, when a connection is made, starts sending thecallers speech and transmitting the called party’s speech in the other direction. ThePC to Phone / Fax category includes PC to Phone Voice and PC to Call Centreservices.(iii) Phone to PhonePhone to Phone method of Internet Telephony is closely associated with thetraditional telephone experience. ITSPs are required to install their own gatewaysand enter into termination agreements all over the world, both with independentISPs as well as established PTOs. In Phone to Phone Internet Telephony, thecustomer, using an ordinary telephone, dials an access code and then thetelephone number; the access code then routes the call to a special computergateway (the IP network). Local computer gateways for companies offering thistype of service must be optimally placed in strategic geographic areas. Forinstance, if a customer using phone-to-phone Internet Telephony plans to callLondon (England) from Mumbai (India), then local gateways must be located inboth London and Mumbai. The gateways convert audio into data for transmissionacross the IP network and then convert incoming data back into analog signals.3. LICENCING INTERNET TELEPHONY SERVICES IN INDIAPursuant to the New Telecom Policy, 1999, the DoT has announced guidelinespermitting ISPs to process and carry voice signals (Guidelines). ISPs can only offerthese services within the service areas for which they have a licence. Pursuant tothe Guidelines, the DoT has revised the License Agreement for ISPs to include theprovision of Internet telephony services (Revised License). The Revised Licensehas been issued under the authority granted to the DoT under the Indian TelegraphAct, 1855, the Indian Wireless Telegraphy Act, 1933 and the TRAI Act, 1997.
  18. 18. 1All ISPs desirous of providing Internet telephony services also have to make anapplication to the DoT for signing an Amendment to their existing ISP license. Theold ISP license agreement, which banned Internet telephony services read asfollows:1.12.3 Telephony on the Internet: Telephony on the Internet is not permitted. Thelicense will be liable for termination for any violation of this clause of the LicenseAgreement. The licensee shall also take measures on his own and as and whendirected by the Government at his own cost to bar carriage of Telephone traffic overInternet.However, the Revised License does not contain the above clause, and allows ISPsto provide Internet access / content services including, Internet telephony services.(a) Provision of Internet Telephony ServicesAs per the Revised License, Internet Telephony is an application service, whichcustomers of ISPs can avail of from their PCs or other IP based CustomerPremises Equipment (CPE).The Revised License restricts the manner in whichISPs can provide Internet Telephony services to only three types:(i) From a PC in India to a PC inside and outside India(ii) From a PC in India to a telephone outside India(iii) From an IP-based H.323/SIP Terminal in India to similar terminals in India andabroad provided they employ the IP addressing scheme of the Internet AssignedNumbers Authority ISPs are not allowed to provide any Internet telephony serviceswhich fall outside the purview of the above three modes.It can be seen that the scope of Internet telephony in the second mode to onlytelephones outside India. So if an Internet telephony service provider allows a PCuser in India to call a telephone in India, the same would violate the RevisedLicence and the ISP could be penalized for the same. It seems that the DoT hasstipulated this condition so that national long distance operators do not lose out ontheir customer and revenue bases.(b) Services that fall outside the purview of Internet TelephonyThe Revised License also states that ISPs are prohibited from offering the followingtypes of services as they fall outside the purview of Internet telephony:(i) Voice communication from anywhere to anywhere by means of dialing atelephone number (PSTN/ISDN/PLMN) as defined in National Numbering Plan;
  19. 19. 1(ii) Originating the voice communication service from a telephone in India;(iii) Terminating the voice communication to telephone within India;(iv) Establishing connection to any public switched network in India;(v) Dial up lines with outward dialing facility from nodes; and(vi) Interconnectivity between ISPs who are permitted to offer Internet telephonyservices and the ISPs who are not permitted to offer Internet telephony services.(c) Quality of Service (QOS) TermsThe DoT has not provided any parameters for the QOS14 for Internet telephony inthe Revised License. The Guidelines and Revised License state that the TelecomRegulatory Authority of India (TRAI) shall prescribe the QOS from time to time.The role of the TRAI is to create an environment conducive to the growth of telecomsector, and safeguard a customers interest and ensure that he gets the QoS thathe has contracted for. As regards QOS, the TRAI has the substantive role in layingdown standards, assessment of QOS, and action for improvements. It has,therefore, the following main functions to perform in this regard:(i) Setting Quality of Service Standards(ii) Monitoring(iii) EnforcementAs of now, the TRAI has not framed any QOS for Internet telephony. Once theTRAI imposes certain basic QOS parameters, ISPs will be obligated to meet theminimum QOS criteria while providing Internet telephony services to theircustomers.In order that the customers can effectively utilize Internet telephony services, theTRAI should formulate the QOS terms as soon as possible.(d) Tariff / Fees
  20. 20. 1The Guidelines state that the TRAI has not levied any tariffs on ISPs for the Internettelephony services that will be provided over the public Internet. However, there is asaving provision that states that the TRAI may levy a tariff at any time and it shallbe binding on the ISP to pay such tariff. This provision has also been incorporatedin the Revised Licence. Moreover, the ISPs do not have to pay any license fee andUSO levies for Internet telephony services. Nevertheless, the DoT reserves theright to impose a license fee on the ISP at any time during the license period.Hitherto also, ISPs do not have to pay any license fee for providing Internetservices. The DoT has continued to impose this license fee-free regime for ISPs inorder to promote the proliferation of Internet usage and now, Internet telephonyservices. However, since Internet telephony services are in direct competition withbasic telephony services, in the event there is unfair competition, the DoT couldimpose a license fee to create a level-playing field.(e) Security MonitoringAs per the Guidelines and Revised License, ISPs who provide Internet telephonyservices through their own Internet gateways would have to provide suitablemonitoring facilities for the security agencies at their own cost. The ISPs also haveto provide periodic reports to the DoT regarding the flow of Internet telephony trafficthrough its network.(f) Inter-ConnectionThe Revised Licence permits only ISPs who have obtained the requisite license tooffer Internet telephony services. It prohibits any interconnection between an ISPthat is allowed to offer Internet telephony and an ISP that is not allowed to offerInternet telephony.4. EMERGING LEGAL ISSUES(a) Ambiguity in DefinitionWhile the Guidelines and Revised Licence discuss what services would amount toInternet Telephony for the Indian context, they have failed to define the termInternet telephony per se. The meaning given to the Internet telephony is arestrictive in nature, as it states what services would fall within and outside thepurview of Internet telephony for the Indian ISPs. In fact, many of the services,which are prohibited under the revised license, amount to Internet telephony in theinternational context. For example, originating or terminating a voice communication service from / to a telephone in India would amount to Internet telephony in theinternational context, if the public Internet is used as the medium of communication.
  21. 21. 1The Guidelines and License do not lay down any clear parameters that need to besatisfied by any telecommunication service to be classified as Internet telephony.While this problem exists world over, and even at the ITU level, this ambiguity couldlead to problems in the future when new forms of technology and modes ofcommunication emerge.At the earliest, as TRAI has suggested, there is a need to distinguish betweenInternet Telephony and VOIP. The Governments of different countries need tocome together and resolve this issue at the earliest.(b) Meaning of PC and TelephoneThe Revised License states that PC to PC Internet telephony is permitted in India.However, the Revised License does not clearly define a PC. Under the InformationTechnology Act, 2000 (ITA), a computer is defined as follows:Computer means any electronic magnetic, optical or other high-speed dataprocessing device or system which performs logical, arithmetic or memory functionsby manipulations of electronic, magnetic or optical impulses, and includes all input,output, processing, storage, computer software, or communication facilities whichare connected or related to the computer in a computer system or computernetwork. Thus, the definition of a computer is extremely wide and is not merelyrestricted to a normal computer, which is used at home or in offices.Moreover, while the Revised License states that the telephone call cannot beoriginated from or terminated on a telephone in India, it does not define the wordtelephone. Even the telecommunications laws in India have no clear definition ofthe term telephone. With the emergence of new technologies and products, themeaning of PC and telephone could be extended to also include personal digitalassistants (PDA) (eg. palm pilots) and even mobile phones with computing power(like the Nokia 9110). Moreover, there is also a convergence between PDAs andtelephones (like the TREO). If a call is made from such devices, it is uncertainwhether the same would be legally permissible.Another emerging legal issue is concerning IP phones. There exists someambiguity as to whether IP phones can be freely used to provide Internet telephonyservices. While it is technically possible to originate calls from IP-based networks, itis uncommon to terminate calls from other networks onto an IP-based network(except in the case of IP PABX system). Since a call from to a number on thenational numbering plan is prohibited, a call from an E.164 universal numbering plan may also not be allowed. However, the International TelecommunicationsUnion is studying an option of assigning an E.164 numbering resource to an IP
  22. 22. 1phone using the ENUM protocol. The ENUM protocol converts the E.164 number toan IP address, and a telephone user can call an IP phone by dialing the E.164number. The perturbing question is whether this would be allowed under Indianlaws as they stand right now.Therefore, it would be necessary to determine and clarify the legitimacy of the typeof instruments and the system being used while making an Internet telephone callin order to stay out of any legal problems.(c) Quality of ServicesOne of the major difficulties in Internet telephony is in achieving a similar standardof QOS for Internet telephony services as for normal telephony services. Thedifficulty could arise due nature of the IP network. The IP network uses packetmode of data transmission that can degrade the quality of the voice communicationas the packets could get lost in transmission on the public Internet, there could be adelay in transmission, there could be a variation in the packet arrival or there couldbe an echo effect due to the delay between the transmission of a signal and itsreceipt.Therefore, while determining what amounts to real time in the context of Internettelephony, it is necessary that the TRAI keeps in mind the recommendations of theITU on Real Time. The ITU in its recommendation no. G.114 (2.96 revision)recommended certain limits for one-way transmission time for conditions with echoadequately controlled. According to Recommendation G.131 (Stability and Echo): 0to 150 ms: Acceptable for most user applications .150 to 400 ms: Acceptableprovided that Administrations are aware of the transmission time impact on thetransmission quality of user applications above 400 ms: Unacceptable for generalnetwork planning purposes; however, it is recognized that in some exceptionalcases this limit will be exceeded.Another practical difficulty that ISPs are facing is the lack of adequate co-operationfrom basic telephone operators. Unless the basic operators give better QOS in theiragreements with ISPs, ISPs will not be able to provide better QOS to theirsubscribers. While last year, the TRAI released its recommendations for QOS forISPs offering Internet Services, ISPs are unable to meet these QOS terms becauseof the lack of co-operation from basic operators. Therefore, the TRAI must keep inmind the existing competition and economic scenario while framing QOS forInternet telephony services.(d) Liability of the ISP
  23. 23. 1The ITA contains provisions dealing with the liability of Network Service Providers(NSPs). A NSP has been defined under the Act to mean "an intermediary". An"intermediary", with respect to any particular electronic message, means anyperson who on behalf of another person, receives stores or transmits that messageor provides any service with respect to that message. Thus an ISP would be anNSP as it receives stores or transmits electronic messages over the Internet onbehalf of its subscribers. The ITA stipulates that every NSP is given generalimmunity as regards any offence under or contravention of the Act or the provisionsmade there under, if such NSP proves that(i) such offence or contravention was committed without its knowledge or(ii) that it had exercised all due diligence to prevent the commission of such offenceor contravention. Under the ITA, publication or transmission or causing publicationof any obscene information is an offence.Therefore, if while using Internet telephony services, if the subscribers transmit anyobscene information, the ISP could be held liable for such transmission. However, ifthe ISP can prove that it was not aware of such contravention or if it had takenreasonable steps to prevent such contravention, it may be immune from anypenalty or liability. Therefore, ISPs must be careful to include appropriate terms intheir subscriber agreements to preclude such liability.(e) Validity of Messenger ServicesOff late, there has been some debate regarding voice chat facility which instantmessenger services have been offering. There are various issues that arise in thiscontext which need to be addressed in order to determine whether such a voicechat facility is legal.The first issue that arises is whether such services amount to Internet telephony.Under normal circumstances, they would amount to Internet telephony as theinstant messengers use the public Internet as a means of transmitting voicebetween two or more users.The second and more important issue is whether these messenger services arepermitted to offer these services in India. As discussed above, in order to offerInternet telephony services, the service provider requires a license. Currently onlyISPs and basic service operators (i.e.BSOs, NLDOs and ILDOs) are allowed toprovide such services as per the provisions of their license. Moreover, nointerconnection is allowed between an ISP who has the Internet telephony licenseand an ISP that does not. Therefore, in order to offer the voice chat facility using thepublic Internet, the messenger would have to obtain an ISP license. Otherwise, themessenger may have to enter into an appropriate arrangement with the ISPwherein the voice chat facility is offered to the messenger users. However, the
  24. 24. 1validity of such an arrangement is also unclear under the law (especially as ISPsare not allowed to assign or sublicense their services). The issue is furthercomplicated if the ISP with whom the messenger has an arrangement does notpossess the Revised ISP license. It is essential that ISPs and the messengerservices settle this problem at the earliest.(f) Blocking of Internet Telephony WebsitesThe ISP licence does not require that an ISP must provide Internet telephonyservices only to its Internet subscribers, nor does it mandate that Internet telephonyand Internet services have to be provided together. However, news reports indicatethat after April 1, 2002, some ISPs have started blocking access to websites ofother rival ITSPs (including foreign ITSPs). If so, do they have the authority to blockthe sites? Further, many ITSPs have tied up with international ITSPs to leveragetheir customer base. The viability of this option remains to be seen, as foreignITSPs can set up 100% subsidiaries in India without the help of Indian ISPs. In fact,it may be economically advantageous for them to do so as they would already havetheir servers and networks established in foreign countries. COMMUNICATIONS CONVERGENCE BILL, 2001
  25. 25. 1The Communications Convergence Bill, 2001 (Convergence Bill) aims at promoting,facilitating and developing the carriage and content of communications includingbroadcasting, telecommunication and multimedia in an orderly manner. Itrecognizes the coming together of voice, video and data, aims to set up a singlesuper-regulator for the telecom, Internet and broadcasting sectors, to be called theCommunications Commission of India (CCI). The Convergence Bill will replace theIndian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, theTelegraph Wires (Unlawful Possession) Act, 1950, the Cable Television Networks(Regulation) Act, 1995 and the TRAI Act, 1997.In the present scenario different services like basic telecom, cellular, Internet andsatellite television have different licenses and are regulated by different agencies.The present situation does not allow bundling of services, like your cable operatorcannot offer you telecommunication services; your ISP cannot carry voice etc. Thelicensing regime that exists as of today service operator has to apply for licensesseparately and are permitted based on the regulations governing service. Thiswould change with the adoption of the Communication Convergence Bill,2000.Recommendations of the Bill: The Convergence Bill proposes to have a singleauthority Communications Commission of India responsible for issuance of licensesand regulating the communications sector including the infrastructure and thecontent delivered through the infrastructure. The bill also proposes setting upCommunications Appellate Tribunal. Any person aggrieved by any decision or orderor penalty of the commission could appeal to the tribunal for speedy decision on theappeal. The commission and the appellate tribunal have been given powerequivalent of a civil court. Responsibilities of the Commission. The commissionwould be responsible for providing licenses under four categories namely:1. Network Infrastructure facilities (Infrastructure Service Provider)2. Network Services (Network Service Providers)3. Application Services (Application Service Providers)4. Content application services (Content ASP)The classification is technology neutral and service sector neutral. Thesegmentation of the market into the four different segments would be based on theservices provided. Each layer is dependent on one or more of the earlier layers forthe provision of services. The Act, it is hoped, shall usher in the era of convergenthandling of communication medium in place, i.e. the Communication Commissionof India shall be responsible of handling basic telephony, cellular service, cable,satellite channel and Internet service operators. The bill shall segment the market
  26. 26. 1on the basis of the layers as illustrated above. This would enable operators toobtain licenses for the specific layer rather than for the service. For e.g. an operatorcould take license for offering only infrastructure facility with the services beingoffered by some other operator. Hughes, the private basic serviceoperator for Maharashtra would be able to offer services like telephony, Internet (itoffers these even today), interactive content or any other service over the cablecoming into your home.The Convergent View "Convergence" refers to the fact that different kinds ofcommunication services, whether in the form of voice, text or video, can beprovided using the same basic infrastructural facility, and similarly, different kinds ofinfrastructural facilities can be utilized to provide the same service. For instance,share prices can be accessed via the Internet on a PC or through the wirelessmedium on a mobile phone. Perhaps the most significant aspect of the Bill lies inthe name itself. It recognizes the "blurring of borders between telecommunications,computing and media”. Further, it also acknowledges that "The continuousdevelopment of new technologies results in an inability to predict the futureevolution of convergence viz. the development of new services like web-casting,Internet Telephony etc. resulting in the need for regulations which does (sic) notaim to predict the future, but aspires to be flexible enough to accommodate andpropagate any permutation and combination of technologies and services." The Bill,smartly enough, has steered clear of burdening itself with technological details.The three key aspects in any communication are: The infrastructure facilities used,such as earth stations, satellites, cables, etc. The kind of service provided such astelephony, broadcast of cricket matches, etc. The technology used to provide theservice The Convergence Bill does not concern itself with the third aspect above. Itonly seeks to regulate the communication sector based on the nature ofinfrastructural facility and the nature of service provided. The basic objectiveIrrespective of the infrastructure or technology used, long distance communicationis based on electromagnetic waves, of varying frequency.In order to ensure hassle-free communication, a proper allocation of frequencybands to various service providers is crucial. For this purpose, the Bill proposes thesetting up of a Spectrum Management Committee, which will earmark distinctfrequency bands for use in strategic and commercial purposes.The Bill also envisages the setting up of the Communications Commission of India,which will be the regulatory agency on the communications sector. TheCommission will be responsible for assigning the various frequencies (earmarkedby the Spectrum Management Committee for commercial purposes) among the
  27. 27. 1various users, and giving out licenses to service providers. The objectives of theCommission, as listed in the draft Bill, are as follows: "The CommunicationsCommission of India, while exercising its functions shall be guided by the followingprinciples:(i) that the communication sector is developed in a competitive environment andthat market dominance in a converged environment is suitably regulated;(ii) that communication services are made available at affordable cost to alluncovered areas including the rural, remote, hilly and tribal areas;(iii) that there is increasing access to information for greater empowerment ofcitizens and towards economic development;(iv) that quality, plurality, diversity and choice of services are promoted;(v) that a modern and effective communication infrastructure is established takinginto account the convergence of information technology, media, telecom andconsumer electronics;(vi) that defence and security interests of the country are fully protected;(vii) that introduction of new technologies, investment in services and infrastructure,and maximization of communications facilities and services (including telephonedensity) are encouraged;(viii) that equitable, non-discriminatory interconnection across various networks arepromoted;(ix) that licensing criteria are transparent and made known to the public;(x) that an open licensing policy allowing any number of new entrants (except inspecific cases constrained by limited resources such as the spectrum) is promoted;and(xi) that the principle of a level playing field for all operators serving consumerinterest, including existing operators on the date of commencement of the Act, ispromoted."EffectsWith the bill adopted, service operators would be able to offer multiple services overthe same network. This shall reduce the cost and other overheads for the operator.The bill defines the physical network, network services and the content deliveredover them independently thus enabling the use of the same network to carry
  28. 28. 1multitude of services. This shall help solve the anomaly of having a separatelicense and network for say offering Internet, telephony and cable services. The billshall increase the value of companies in the communications business specially thebusinesses owning the last mile access like MTNL, Hughes, and BSNLetc. The cable operator in your colony would have the best of the world with hisnetwork. He could now also start bundling telephone services, Internet and othervalue added services than just the plain old un-interactive cable television.Licensing Regime under the Bill. The Convergence Bill also provides for a newlicensing regime, with a limited number of five licenses, which include networkinfrastructure facilities, networking services, network application services, contentapplication services and value-added network application services. While grantinglicences, the CCI may grant them either singly or jointly, depending upon the natureof services to be offered. Therefore, while providing Internet telephony services, theservice provider would have to obtain the network application services licence andprobably the value-added network application services licence under theConvergence Bill.CLASSIFICATION OF INTERNET TELEPHONY UNDER THE WTO:The General Agreement of Trade in Services (GATS) under the World TradeOrganization (WTO) envisages the progressive liberalization of trade intelecommunications services. Though, India has made no specific commitments forInternet telephony, it has made certain commitments for other telecommunicationservices. Going forward, it would be important for the Indian Government tounderstand how Internet telephony services could be classified under the GATSframework while making any commitments.Under GATS, telephony falls within the purview of telecommunications services asper the Central Product Classification System (CPC) . Telecommunicationsservices are further classified as basic telecommunications and value-addedtelecommunications. It would be useful to see what commitments India has made inthis sector and analyse how Internet telephony can be classified for the purposes ofGATS.(a) Basic Telecommunications Services Vis--vis Internet Telephony Basictelecommunications services are further classified as:(i) Voice telephone;(ii) Packet- switched data transmission;(iii) Circuit- switched data transmission;
  29. 29. 1(iv) Telex;(v) Telegraph;(vi) Facsimile;(vii) Private leased circuit;(viii) Other - including mobile communications, and various others, (e.g. satelliteservices, paging, trunked radio) depending upon the country. For the purpose ofInternet telephony services, voice telephone, packet-switched data transmissionand other services would be relevant. Of these three, India has made commitmentswith respect to voice telephone and other services.(i) Voice TelephoneVoice Telephony Services have not been defined or explained under the GATS.View of the European Union:It would be helpful to look at the definition of voice telephony according to Article 1of the Directive of European Union, which defines Voice Telephony as thecommercial provision for the public of the direct transport and switching of speechin real time between Public Switched Network termination points, enabling any userto communicate with another termination point. Further as per the said Directive,Internet telephony is defined as Voice Telephony if it meets the following criteria:the communications are subject of a commercial offer; the service is provided forthe public; the service is provided to and from public switched network terminationpoints on fixed telephony network; and, it involves direct transport of speech in real-time.As per this definition, it can be understood that the first two forms of InternetTelephony (i.e. PC to PC and PC to Phone) would not be characterized as VoiceTelephony under this Directive, simply because the service would not be providedsolely "to and from PSTN points".View of the United States: However, the US meaning of voice telephony is broader.As per Federal Communications Commission (FCC) of USA, IP telephony servicesenable real-time voice transmission using Internet Protocols.Voice Telephony as Public Telephone Services: Under the CPC, voice telephonyservices are classified as Public Telephone Services. Public Telephone Servicesare further classified as Public local telephone services Public long distancetelephone services.
  30. 30. 1Mobile Telephone ServicesWith respect to voice telephone service, Indian commitments are limited tolocal/long distance, for public use over a public telecommunication transportnetwork and wire based (i.e. for fixed network of subscribers) services. The Internetis a public network of computers and can be used for transport oftelecommunications, such as voice and data. Thus, it could be interpreted as apublic telecommunication transport network in case of Internet telephony.As mentioned earlier, the main difference between Internet telephony and normaltelephony is that whereas in normal telephony, circuit switching is used, InternetTelephony is based on packet switching technology. In packet switching, electronictransmissions are chopped into packets of varying numbers of bytes. Each packetis given a header or address label, and sent from one network node towardsanother. The packets are (theoretically) bounced along from one router to another,armed at each hop with only enough information to get them safely to anotherrouter, where the process is repeated. By contrast, on circuit-switched networksoperating under a protocol such as Signalling System 7 (SS7) a call is routedthrough a hierarchy of local, inter-urban and international switches to establish acircuit between caller and called party.Though Internet Telephony could amount to voice telephony, it is suggested that itshould fall under a separate new category as it involves a different form oftechnology from traditional voice telephone services. This proposition can besupported by the fact that a separate classification was resorted to with respect tomobile telephone services based upon the technological difference between mobiletelephony and normal telephony.Further, India has not made any specific commitments under voice telephone forMode 1(cross-border supply) and Mode 2 (consumption abroad) of supply underthe GATS. Therefore, even if Internet telephony is treated as voice telephony, byopening up Internet telephony, India is already a step ahead since it has not madeany specific commitments in this respect.(ii) Other ServicesThis is a broad group that includes various services such as mobilecommunications, satellite services and radio paging services. As discussed above,due to the technological differences, India could argue that Internet Telephonyshould fall under this category. As of now, India has only committed that ForeignService providers can set up operations to provide these services provided theyobtain the licence from the DoT. However, there are no commitments with respectto these services under Mode 1 and 2.
  31. 31. 1Value-added Telecommunications ServicesValue-added Telecommunications Services are classified as:(i) Electronic-mail,(ii) Voice mail,iii) On- line information and data base retrieval,(iv) Electronic data interchange,(v) Enhanced/ value- added facsimile services, including store and forward, storeand retrieve,(vi) Code and protocol conversion,(vii) On- line information and/ or data processing (inc. transaction processing).Indiahas made some commitments with respect to services (i), (ii), (iii) and (v).As per the CPC, these services have been qualified as Data and messagetransmission services. Data and Message Transmission Services are further sub-divided into:(i) Data Network Services (75231): Network services necessary to transmit databetween equipment using the same or different protocols. This service can beprovided via a public or dedicated data network (i.e. via a network dedicated to thecustomers use);(ii) Electronic Message and Information Services (75232): Network and relatedservices (hardware and software) necessary to send and receive electronicmessages (telegraph and telex/TWX services) and/or to access and manipulateinformation in databases (so-called value-added network services).However, Internet telephony may not fall under these categories, as it is not anetwork service. Further, India has no commitments with respect to Electronic datainterchange, Code and protocol conversion and On- line information and/ or dataprocessing (inc. transaction processing). From the above analysis, it can beconcluded that Internet Telephony services could fall within the meaning of VoiceTelephony services. However, due to the technological difference between Internettelephony and traditional voice telephony, it would be suitable to formulate aseparate category for classification of Internet telephony. Depending upon thereciprocal commitments India receives from other countries, it could use these as anegotiating tool at the WTO.
  32. 32. 1 CONCLUSIONWith increased competition in the telecommunications sector, relatively high tariffsand low tele-density, India is an attractive market for Internet telephony and VoIP.In fact, experts have indicated that India will be the fourth largest market for Internettelephony in the Asia Pacific region, after China, Japan and South Korea. After theopening up of this sector, several foreign companies have also joined the race tooffer Internet telephony services in India. For example, US-based Net2Phone and
  33. 33. 1India based CalTiger have joined hands to deliver VoIP services to the UnitedStates at as low as Rs 3 per minute. Further,World Phone Internet Services Pvt. Limited, a joint venture between US-based WPIgroup and Delhi-based IT-enabled service company Speed Holdings hasalready ventured into Internet telephony in the country. Several market playershave also begun plans to commence and offer video-conferencing facilities.While the growth of Internet telephony will certainly increase the competition withbasic service operators, on the whole the consumer will stand to gain. However,regulations that artificially restrict the usage and growth of Internet telephony willonly make the viability of this service more complex and ambiguous. The DoTneeds to try to resolve all forms of ambiguity in the licence terms to avoid futuremisunderstandings. At the same time, service providers must ensure that theirInternet telephony services fall within the parameters of the existing regulatoryframework. This will assist in minimizing legal liability. Bibliography 1.
  34. 34. 12. www.Exchange4media.com3. www.mib.nic.in4. www.etnow.com6. www.economictimes.indiatimes.com7. Mass Communication in India by Dr. Keval J. Kumar8. India on Television by Nalin Mehta9. ‘Impact’ Magazine10. ‘Business Standard’ Daily Newspaper11. ‘Public Relations Voice’ Magazine.12. ‘The Indian Express’ Daily Newspaper.