The net neutrality debate has resurfaced in the country as telecom operators, including Reliance Jio and Vodafone Idea, are backing a proposal to regulate content delivery networks, which are used by global big tech companies to host data locally .

Telecom operators like Jio say that content delivery networks, which were kept out of the Telecom Regulatory Authority of India’s 2017 recommendations on net neutrality, need regulatory re-examination as internet companies start to tie up with specific ISPs to deliver higher quality services to certain groups of customers.

On the other hand, industry bodies such as the National Association of Software and Services Companies (NASSCOM) and US India Business Council (USIBC) counter stating that the CDN market is currently growing and regulator should adopt a cautious approach.

What are content delivery networks

A content delivery network (CDN) refers to a geographically distributed group of servers that work together to provide fast delivery of Internet content. Thus, internet companies will employ CDN services to deliver services faster. In turn, CDN service providers have deals with telecom operators and internet service providers to host servers in their networks. CDNs are used by all types of Internet companies including search engines (such as Google) OTT content providers (Netflix, Hotstar, Amazon Prime) , e-commerce companies, banking and financial companies, among others. Page loading time has a direct impact on advertising and e-commerce revenues for any web-based service, which is why there is a vibrant market for the CDN services.

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Reliance Jio has taken a view that the market for interconnection of ISPs and CDN needs to be regulated while it is at an nascent stage. “Dominant players can dictate terms for interconnection with smaller ISPs refusing them direct peering. Further large ISP players, who are also in CDN space, can create exclusive tie-ups with large content providers like OTT platforms companies, excluding other players from direct access on equal terms. There is a need to see that the market is not misused to create dominance, hurting the business of smaller players by way of arbitrary demands. Such a market may require regulatory interventions.” said Jio in a letter to TRAI.  

“We submit that if the access to CDNs is not on equal terms, the issue of net neutrality may arise whereby customers of preferred players may be provided with better quality CDN services” Jio said, which is why it asks for the examination of contractual agreements between ISPs and CDNs and the TRAI should conceptualise a regulatory framework to avoid possibility of any anti-competitive practices and violation of net neutrality principles. 

Vodafone Idea has also told TRAI that the absence of a regulatory framework for CDNs is affecting the growth of CDN in India and also, creating a non-level playing field between CDN players and telecom service providers. 

Industry body NASSCOM countered saying, that at present CDNs represent a constantly evolving, competitive and growing market in India is evident both from the diversity of established players (such as Akamai, which listed in 1999) and new players (such as Fastly, which listed in 2019; alongside other content-first companies such as Netflix and Google) active in the market. This is as a result of the low entry barrier in the market, which has also driven down prices offered to content providers.

USIBC also chimed in stating that in absence of any market failures, TRAI should consider a cautious approach so as to not stifle CDNs growth in India.

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