Centre for Internet and Society

The Telecom Crisis is an NPA Problem

Shyam Ponappa — 2019-12-15T07:26:50Z

After interim relief for telecom, structural reforms must follow.

The article originally published in Business Standard on November 7, 2019 was also mirrored on Organizing India Blogspot

The Committee of Secretaries to mitigate financial stress in telecom must act quickly on interim measures for the sector to survive. But is its mere survival sufficient for India’s development and growth? Is it possible to fix telecom in isolation?Our communications needs are very poorly served, although at rock-bottom prices. Is it even possible for our hapless citizens and enterprises to get past shoddy services and productivity foregone, to trade with other countries on a more even footing?

Yes, if we succeed at major structural changes, starting with telecom. But to transform telecom, the government and all of us have to come to the stark realisation that just as finance drives the economy, digitisation and communications have to be at the heart of production and delivery. Telecom and digitisation are strategic enablers for all infrastructure and in all sectors. Leading countries are so far ahead and functioning so effectively that it is difficult for us to imagine. We must want that path, plan for it, and put in the requisite effort.

Simply tweaking overdue payments, tinkering to reduce charges, and plugging along as before isn’t going to get us there. In this sense, the Committee’s charter is too limited. All it can do is assuage the pain, whereas our need is for a revitalised industry to serve our purposes.If the Committee’s scope were broader, could we actually adopt digitisation as our core strategy for development and growth? A study on China, “Telecommunications reforms in China”, about the transformation in policies to make digitisation its development priority, is instructive.1

Their approach to reforms was to balance the government’s aims of universal coverage, governance and control, and efficiency; industry’s profit-seeking; and the people and enterprises’ needs for freer, more rapid communications. This is what we need to do, in a way that works for us.Also, the government, the judiciary, the press and users need to understand and accept that the telecom crisis is part of the larger non-performing assets (NPAs) problem. It has systemic links to NPAs and banking, which links to real estate and construction, electricity and roads, and stable and predictable taxes. Government payment delays and tax terrorism must stop. Business as usual will not resolve NPAs soon to enable growth. These two articles explain why and deserve attention.2

Essentially, entities that take deposits need Reserve Bank of India (RBI) regulation. In a crisis, people with domain expertise and capacity must be appointed to take immediate steps to protect assets and operations, as with Satyam or IL&FS, because seizing/freezing assets often hurts depositors and creditors. A bureaucratic process as with the Punjab & Maharashtra Co-operative bank is likely to result in yet another zombie bank, burning depositors’ money just to stay alive.The Committee’s focus should be on cash flows, modelling cash flows and their timing, not just the present value of discounted flows, or other extraneous emotional, political, or judicial/administrative reasons.

Employment is a legitimate consideration, but has to be sustainable, with timely cash generation. Else, other sources of timely cash support must be arranged, because without sustained cash flows, no gambit or subsidy can succeed (and maintaining unproductive employment will not be possible). Some fixes need major legislative changes to policies.

BSNL & MTNL

On BSNL and MTNL, a recent article sets the context and explains why the revival plan is unrealistic.3 In short, these poorly supported and much-abused enterprises have so much debt that earnings before interest, taxation, depreciation and amortisation would have to be at least 35 per cent. Governments have used them as market spoilers as with Air India, precipitating unsustainable price wars that gutted the industry.An alternative is to downsize, re-skill as needed, and retain the public sector entities (as one or both) in the role of security-and-public-interest-anchors in infrastructure consortiums. These must be run by the private sector (and in strategic areas, by defence). This will facilitate policies such as assigning spectrum for payment on usage without auctions, and extending Wi-Fi to 60 GHz and 6 GHz (details at: https://organizing-india .blogspot.com/2019/10/extend-tax-cut-logic-to-infrastructure .html, and https://organizing-india.blogspot.com/2018/11/a-great-start-on-wi-fi-reforms.html).

Weak Financial Systems

The Committee needs to apprehend and convey the need to strengthen financial institutions. Financial systems provide second-order infrastructure for productive activity and wellbeing. They need an adequate underlay of first-order, basic infrastructure, comprising communications, energy, water, waste, sewerage, and transport, leaving aside housing and the basics of security, and law and order. While most of us take these for granted, there should be no doubt about how critical these attributes are, and that they are being eroded and increasingly at risk because of social disorder and economic inadequacies. In addition, basic health care and education are essential adjuncts for the supply of trainable people to operate these sectors.

Until some years ago, despite weak infrastructure, financial systems were among India’s real strengths, although eroded periodically by disruptions resulting in NPAs. However, there was strength in the professional capacity of this sector that held up in spite of the pressures. Over time, these institutions have been severely degraded, through laxity, complicity, pressures for evergreening, the abrupt imposition of credit quality and NPAs, the extent of frauds because of lax or complicit supervision and the reputational damage, the buffeting from demonetisation and pressures to cross-sell products such as insurance. Governments need to understand this and support building professionalism, avoiding melas and waivers.

The scope of the Committee could be expanded to set the objectives of telecom and digitisation in the interests of governance, industry, and users, and to outline next steps. They could consider the experience of China and others such as Sweden for this vast effort, while addressing linkages and NPA issues. Perhaps, they could be exemplars by setting the tone for a national approach that is not departmental and becomes bipartisan, and helps to move away from our abrasive, confrontational politics that leads to deadlocks.

Becky P.Y. Loo, October 2004: https://www.researchgate.net/publication/227426547_Telecommunications_reforms_in_China_Towards_an_analytical_framework
Debashis Basu, October 27, 2019: https://www.business-standard.com/article/opinion/how-to-fix-the-pmc-bank-crisis-119101400006_1.html October 13, 2019: https://www.business-standard.com/article/opinion/lessons-from-pmc-why-govt-is-responsible-for-co-operative-bank-crises-119102700620_1.html
Rahul Khullar, October 31, 2019: https://www.business-standard.com/article/opinion/don-t-bet-on-bsnl-mtnl-s-revival-119103100040_1.html

For more details visit http://editors.cis-india.org/telecom/blog/shyam-ponappa-business-standard-and-organizing-india-blogspot-november-7-2019-telecom-crisis-is-an-npa-problem

The Supreme Court Delivers

Shyam Ponappa — 2012-12-21T09:57:57Z

Now, the spectrum and licence issues need resolution. On September 27, 2012, the Supreme Court of India delivered the opinion of a bench comprising five Judges on the Presidential Reference regarding the auction of 2G spectrum.

Published in Organizing India Blogspot on October 11, 2012 and in Business Standard on October 4, 2012.

The Supreme Court’s opinion on the Presidential reference[*]dismissed two preposterous claims. One is that it is beyond the ambit of Parliament and the government to formulate economic policies. The second is that the government must allocate resources only through auctions. It’s like the end of a self-destructive nightmare. True, our heedless kleptocracy as a society of rogue politicians, bureaucrats, defence personnel, and complicit citizens, led to this pass. Even so, the anarchic “destructionism” of these claims is as reprehensible as the kleptocracy they seek to tear down. Fortunately, the Supreme Court opinion rose above the populist clamour.

There’s still a mess to clear. The big picture is that the Supreme Court left its decision on spectrum auctions unaddressed. In matters of detail, some points need resolution based on facts. These are discussed below to dispel prevalent myths.

Myth 1: Auctions maximise govt revenues

"Auctions may be the best way of maximising revenue…": paragraph 116 of the opinion. This contravenes the evidence after the National Telecom Policy -99, that revenue-sharing maximises government revenues as well as public benefits. It also ignores the many auction failures.

Consider the evidence: auction revenues foregone were estimated at under Rs 20,000 crore for 1999-2007, because the sector was mired in losses and was unable to provide services effectively or pay those dues. By comparison, actual collections from revenue-sharing by March 2007 were more than double, at Rs 40,000 crore. Collections by March 2010 were Rs 80,000 crore. Current annual contributions to government revenues may be about Rs 18,000 crore on Adjusted Gross Revenues estimated at Rs 1,40,000 crore, plus taxes, amounting to perhaps Rs 36,000 crore.

Re public benefits, access to telephony grew from a few million users in 1999 to about 700 million today (excluding around 250 million shadow subscriptions).

An ameliorating caveat in paragraph 12 states: "…if the State arrives at the conclusion … that maximum revenue would be earned by auction of the natural resource in question, then that alone would be the process", and this is expanded in paragraph 119:

"Where revenue maximisation is not the object of a policy of distribution, the question of auction would not arise. Revenue considerations may assume secondary consideration to developmental considerations."

This has not prevented erroneous conclusions in the press that auctions are the only valid process, notwithstanding that the conditions stipulated in the order, eg, that government’s actions be “fair, reasonable, non-discriminatory”, were always operative, if not adhered to in instances of abuse, as in the 2G scam.

Myth 2: Maximum govt collections are in the public interest

Government collections as the public interest criterion may work for colonial powers extorting revenues from subject states, or possibly for utopias whose political economy is so balanced that such cross-subsidisation works. Developing economies like India presumably can and should seek the welfare of their people. The same populists crusading for maximum government collections accuse governments of corruption and waste. This doesn’t provide a coherent approach to infrastructure, where each capital-intensive sector is configured to deliver a specific service. For instance, the energy sector has to deliver power, while telecommunications must deliver communications services. Neither can be expected to deliver toilets or water. Yet, many well-intentioned people seem to nurture such irrational expectations.

The spectrum and broadband link

The first prerequisite for broadband is high-speed connectivity. The second is reasonably priced services. Our objectives are, therefore: (a) a broadband network, (b) available anywhere (c) at reasonable prices. Our networks are deficient, however, particularly in rural and semi-urban areas. A host of factors are responsible, ranging from limited public sector network rollout, combined with a private sector focus on the most lucrative urban centres, with incentives skewed to voice telephony. Applications need connectivity based on networks that require spectrum.

Problems and solutions

Consider an application like distance education. The need is for networks and services of high quality (followed by the additional requirement of content). What is apparent is that such applications cannot be effective without the connectivity. So we’re back to the need for networks, of fibre where feasible, and wireless elsewhere. This brings us back to the need for spectrum.

Reviewing facts

As regards the facts relating to the 2G judgment deserving review:
The solution the Supreme Court has not considered is that operators need only to use spectrum, for which they can be charged a fee. The evidence of widely available Wi-fi shows that innovation and usage thrive if spectrum is available. The Supreme Court, the government, and the public need to recognise that allocating spectrum to operators is only one way to use spectrum.

There need be no alienation of spectrum at all, if policies allow open access and charge fees. Then, spectrum could be used like any infrastructure network, eg, airports, highways, or rail, on payment of usage charges. The sharing could be in at least two ways. Operators could pool spectrum for collective use. For this, (i) regulations must allow pooling/active facilities sharing, and (ii) operators must agree on terms and procedures. Another way is for mandatory spectrum sharing using the database-driven systems being implemented in the US by Spectrum Bridge and Telcordia. Similar deployments are planned in the UK, the European Union, and in Singapore. The TV white space is shared because this range is available for sharing, and not because other bands cannot be shared.

There are immense societal costs of duplication in capital investments in multiple networks, including the last-mile spectrum access, of operators using dedicated networks with limited passive facilities sharing (such as towers), compared with the benefits of open-access to common networks, if policies changed. These would employ active facilities sharing (equipment, and not just construction) to reduce capital equipment, construction costs, energy for towers, carbon emissions from a more limited physical network, possibly reduced radiation from a rationalised network with small cells with lower-powered equipment, and the multiplier effect on the finite available spectrum.

Enormous productivity benefits could accrue through ICT applications in infrastructure such as smart grids for energy, transportation, education, healthcare, and government services, as well as many commercial applications.

The Supreme Court could also uphold contractual obligations, by discriminating against actual transgressors in the 2G spectrum allocation, while rehabilitating those who operated within the law.

[*].http://supremecourtofindia.nic.in/outtoday/op27092012.pdf

For more details visit http://editors.cis-india.org/telecom/blog/organizing-india-blogspot-october-11-2012-shyam-ponappa-the-supreme-court-delivers

The Supreme Court & Spectrum Management

Shyam Ponappa — 2013-03-04T08:28:23Z

Only the Supreme Court can rectify spectrum management in line with other resources, but all stakeholders can contribute.

Shyam Ponappa's column was published in Organizing India Blogspot on February 14, 2013. Originally published in the Business Standard on February 6, 2013.

Last week, the department of telecommunications initiated another spectrum auction, as directed by the Supreme Court. The auction of 800, 900, and 1800 MHz is to end in March. The winners, if any, must pay in 10 days a third of the amount bid for 1800 MHz, and a quarter for 800 and 900 MHz.

If there are high bids, why should it bode ill for communications services for education, training, health care, commerce, and for future productivity? Because many years must pass for the results to show.

Fallout of auctions: many years away

The expiry of 900 MHz rights starts from December 2014 in Delhi, Mumbai and Kolkata; others will do so only from 2016-2024. The table shows the assignments in each circle, and the market share of revenues in July 2012. The colour of each cell indicates the expiry period.

The first assignments of 900 MHz spectrum to private operators in Delhi, Mumbai and Kolkata expire in November 2014. The second will take up to five years longer, ie, from 2015-2019, eg, Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Vodafone in Tamil Nadu, etc. The third will take even longer. Hence, forcing auctions does not provide a near-term solution.

Technical inputs to judges

Operators with more spectrum or access to more bandwidth can offer higher capacity and data rates at lower cost. Operators try to get as much spectrum as their competitors, because having less spectrum means deploying more cell sites for the same capacity, which means greater capital cost. Hence, in India, pooling and sharing spectrum among operators – providing greater bandwidth dynamically to each operator on demand – will result in better coverage and higher capacity at lower cost. If operators pay only for using the spectrum on demand and do not incur high costs to acquire spectrum rights, they can invest more capital in the “superstructure” of their services, while maintaining lower tariffs. Acting in the public interest, the government should, therefore, keep spectrum costs low for better coverage and services at lower prices. If informed by knowledgeable, unbiased experts, the Supreme Court is likely to accept this conclusion.

The Supreme Court upheld these principles for natural resource allocation on the Presidential Reference. The reference excluded how spectrum should be assigned. A logical extension of these principles requires that spectrum assignment, as for other resources, is for governments to decide.

Spectrum sharing

Developments in spectrum sharing augur a new, collaborative approach, and a change from exclusive rights apart from unlicensed spectrum for Wi-fi. While spectrum sharing was pioneered by the US and the UK, it is being pursued widely, as in trials in Finland for the European Union, and in Singapore, Japan and Korea in Asia. Shared spectrum standards under development for years are now coming to a head. Standards can lead to large volumes resulting in low prices, as for Wi-fi.

A standard has already been established for long-range TV white space (TVWS) for rural broadband (802.22). This year, another is expected for short-range TVWS (802.11 af). Finland is conducting a commercial trial covering some 300,000 people. Another Finnish trial will address dynamic access to pooled spectrum, or authorised shared access.

Large-scale deployments of TVWS are beginning in America, with two commercially licensed TVWS administrators, Spectrum Bridge and Telcordia, about to deploy networks. In the UK, the regulator is likely to issue rules shortly, after the extensive Cambridge White Spaces Consortium trials of 2011¹.

In America last August, the Federal Communi- cations Commission (FCC) allowed T-Mobile to test spectrum sharing in the 1755-1780 MHz band with federal agencies using this band. Also, the US Congress directed the National Telecommunications and Information Administration (NTIA), responsible for government and defence spectrum, and the FCC to examine whether additional spectrum could be opened to sharing by unlicensed devices. Last week, the NTIA proposed that unlicensed devices be allowed to operate from 5150 MHz to 5925 MHz. This wide band will facilitate gigabit throughput on a new wireless standard, 802.11 ac. Routers are available for this draft standard, although they are expensive at around $200 (Rs 10,600), because of the low starting volumes.

While it may take a year or more to get lower priced spectrum-sharing devices, the fallout of the auctions and their impact will take very much longer to settle. Further, the “eviction” from 900 MHz of GSM service providers like Bharti and Vodafone through refarming may result in chaos and service deprivation for millions of GSM users, unless they win bids to keep their spectrum. In other words, while trials will take some time to conduct in India to prove that pooling spectrum to share among operators is practicable, they are likely to converge far quicker than the disruption by forcing auctions and the likely litigation, apart from being much more beneficial and orderly.

An approach to corrective action

There is an inspiring example from Bihar of how such issues can be addressed through concerted action by stakeholders. The example is from the districts where the Bill & Melinda Gates Foundation works on mother and child care. Something amazing has apparently happened: the various agencies are collaborating, whereas they worked in silos before. Auxiliary nurse midwives, anganwadi workers and accredited social health activists (ASHA) are co-ordinating their activities to achieve better results. There’s a communications angle, too: five major operators (Airtel, Idea, Tata, Reliance and Vodafone) have partnered with the Foundation and reduced tariffs to make their services affordable.

There is something that stakeholders can do for spectrum (the honourable judges, DoT, the Telecom Regulatory Authority of India, other agencies, operators, and independent experts): they can bring their expertise and discretion to bear for beneficial solutions. These may include short-term steps, like more 2.1 GHz to create a pan-India 3G network instead of the CDMA 19003 MHz, apart from exploring possibilities for more unlicensed bands, and other forms of spectrum sharing.

For more details visit http://editors.cis-india.org/telecom/blog/organizing-india-blogspot-shyam-ponappa-feb-14-2013-the-supreme-court-and-spectrum-management

The South African Telecommunications Sector: Poised for Change

radha — 2011-10-21T09:59:51Z

CIS in collaboration with the LINK Centre, Graduate School of Public and Development Management, University of the Witwatersrand, South Africa and in association with different institutions across India is organizing a Lecture Tour on:
“The South African Telecommunications Sector: Poised for Change” By Sagie Chetty, Senior Manager, Eskom, South Africa.
It will be our pleasure to have you join us for the talks.

The Co-hosts, Dates and the Venues for the Talk are given below –

Co-Host: Indian Institute of Technology, Madras
Date: 19th October, 2009 at 3.30pm
Venue – IIT-M, Chennai

Co-Host: Indian Institute of Technology, Bombay
Date: 20th October, 2009 at 4.00pm
Venue – IIT-B, Mumbai

Co-Host: International Institute of Information Technology, Bangalore
Date: 23rd October, 2009 at 4.00pm
Venue – IIIT-B, Bangalore

Co-Host: Indira Gandhi National Open University, Delhi
Date: 26th October, 2009 at 3.00pm
Venue – IGNOU, Delhi

Co-Host: National Institute of Science Technology and Development Studies, Delhi
Date: 27th October, 2009 at 3.00pm
Venue – NISTADS, Delhi

Co-Host: CCMG - Jamia Millia Islamia, New Delhi
Date: 29th October, 2009 at 2.00pm
Venue – CCMG - Jamia Millia Islamia, New Delhi

About the Speaker:

Sagie Chetty is a Senior Manager in Eskom, South Africa’s largest electricity utility. Sagie spent the first part of his career at Eskom as Information Manager in the Generation Division. In that time he was responsible for information systems strategy development and implementation. Some of the key projects he has been involved in are the implementation of SAP Plant Maintenance, Business Intelligence systems and other bespoke Information Systems for Generation Power Stations.

Abstract of the Lecture: The South African Telecommunications Sector: Poised for Change

With a gross domestic product of over $506 billion (PPP, 2008) South Africa is one of the leading economies on the African continent. Only Nigeria with a GDP of $328 billion and Egypt with a GDP of $453 billion currently rival the South African economy. The economy is strong in manufacturing and agriculture, but is still based significantly on mining of gold, diamonds, platinum, coal and iron ore. Its main trading partner is the European Union. Bilateral trade with India amounts to $6, 2 billion (2008) with the balance of trade in South Africa’s favour to the value of about $1 billion.
Although one of the leading economies in Africa, South Africa’s Information and Communications (ICT) sector has not shown the concomitant level of development that reflects its economic position in Africa. ICT usage – telephony and Internet – has historically been low, and electronic transactions are utilised largely by business. There are a number of reasons for this; however the high cost of telecommunications is certainly a contributing factor. The high cost is attributed largely to policy and regulatory failure in the telecommunications sector. The sector is characterized by powerful incumbent telecoms operators that thwart competition and further entrench their dominant market positions. The consequence is that the high telecommunications costs impact access, affordability and the cost of doing business for the region.
Recent developments in the telecommunications sector, however could spell the end to high costs if policy and regulatory actions do not hinder competition. South African consumers can in the very near future look forward to lower telecommunications prices with the laying of new undersea cables, a new national backbone to compete with the existing one, new satellite ventures to provide the backhaul between cellular and broadband towers, a landmark court decision allowing value added network service providers (VANS) to build their own networks and the imminent entry of the incumbent telecommunications fixed line operator into the mobile arena. It is an opportune time for policy makers and regulators to take bold steps to free up the sector and open it up for true competition.
Lines that historically demarcated fixed, mobile, voice, data are blurring, causing shifts in market structures. However, currently the market is structured around the incumbent Telkom for fixed lines services and Vodacom and MTN for mobile services. A second PSTN, Neotel has been licensed but is only offering limited services. A third mobile operator, Cell C is operating but has yet to gain any significant market share.

The talk is open to all and there are no registration or entry fees.
Please let us know if you require any further details.

VIDEOS

For more details visit http://editors.cis-india.org/events/lecture-tour-by-sagie-chetty

The Right Ring Tone

Shyam Ponappa — 2012-05-10T10:39:51Z

Focus on improving service quality with a strong partner, and not on one-shot stake sales, says Shyam Ponappa in his article published in the Business Standard on April 1, 2010.

Just five years ago, Bharat Sanchar Nigam Ltd (BSNL) was India’s second most profitable company, with net profit of nearly Rs 6,000 crore — nearly equal to Hindustan Unilever’s revenues — with over Rs 36,000 crore in revenues. By March 31, 2010, BSNL expects a big loss, while a competitor, Bharti, with revenues of only Rs 8,000 crore then, has caught up in revenues and is far more profitable. Mahaganar Telephone Nigam Ltd (MTNL), too, is struggling to stay profitable.

While these public sector giants are in a graveyard spiral, they still have valuable assets in their reach and their networks of hundreds of thousands of kilometres. They also have a corps of technical professionals, with unmet user needs burgeoning in cities, towns, and all over India’s hinterland.

How can BSNL/MTNL be extricated from their predicament, and built up to become more like a State Bank of India, instead of a moribund Air India and the once-dominant Indian Airlines? Consider the present and future possibilities.

The pertinent facts are:

The network and capacity are valuable assets for operations, provided services are rationalised and extended in commercially sound ways.
Neither BSNL nor MTNL has been able to successfully capitalise on its headstart in WiMAX and 3G.
Given present trends, both will run up mounting losses.

All management and employees, including the Indian Telecom Service (ITS) officers, will have to engage in radical changes voluntarily. This is why all stakeholders, including the government, have to seek collaborative solutions, to resolve anachronistic legacy situations that cannot continue on terms as fair as possible, including a VRS, and possibly pay cuts for deferred profit-sharing. The alternative is losing a strategic backbone network-operating capability, something India needs, with the associated hardship for so many employees.

Dire prospects

The outlook for both BSNL and MTNL shows in their performance (Figures 1 and 2).

For BSNL and MTNL, increased employee costs after the Pay Commission recommendations, together with declining fixed-line revenues, led to deteriorating profits. Meanwhile, years of stalled procurement, decreasing earnings and a recommendation to divest 30 per cent have all led to a stand-off at BSNL, with a threatened strike. Whether in public or private sector, there have to be good services with good profits; otherwise, competitors will devour them.

Doing the unthinkable

Are there ways out? Can these investments in equipment and people be resuscitated by some miracle of management and IT engineering to be at the heart of the country’s expanding communications services? Can their personnel pull together?

That magic could come about if individuals and interest groups rise above themselves, avoiding opportunistic self-enrichment, and approach problems collaboratively instead of antagonistically, and if the government can abjure misguided fiscal zeal.

Instead of divesting a stake as a one-shot, revenue-raising deal, induct a strong partner to build services and revenues.
Serve user needs, instead of offering “products” with some internal geographic or technological definitions that are not easily understood.
Rationalise services like EVDO cards (broadband data cards) that are not customer-centric, because if they work in the rest of the country, they don’t in Delhi and Mumbai, and vice versa.
BSNL and MTNL could go for collaborative data-streaming with 2.4 Mbps EVDO cards usable everywhere, offered with a service level and style that can only come with a hands-on partner changing the off-putting way BSNL and MTNL treat customers.
Get politicians out of procurement, and induct technology like wireless corDECT at 512 Kbps for rural areas if appropriate, even if it is “old” and not state-of-the-art, instead of waiting for years for alternatives that aren’t there of 3G or LTE (Long-Term Evolution or 4G), and will cost much more.
Move up to 3G/LTE after some years of generating profits.
Work with India’s technology companies to build local equivalents of Huwaei and ZTE, with India’s assured markets. (This requires policies far beyond the ambit of the DOT, as in the way China has nurtured Huawei/ZTE for years.)

Put the whole package together, end-to-end, and BSNL/MTNL could be winners, as would the public.* Private operators will face competition if this happens, but they can gain from the rise in business levels. These are big issues for immediate consideration and action. Such challenges are best addressed collaboratively.

Although collaboration seems far removed, notable exceptions like Amul, Operation Flood, the Sirmour farmers’ cooperatives for irrigation, SEWA (Self-Employed Women’s Association) and Infosys prove that it is feasible.

Problem-solving vs confrontation and attrition

Thinking and acting in our collective interests require making hard choices after cost-benefit analyses. From this perspective, we should address BSNL and MTNL from an assessment of India’s needs and available alternatives, rather than only as a historical mess. True, the mess has to be dealt with, but with forward-looking considerations of public benefits for the common good. Employees need to recognise this, juxtaposed with the consequences of unyielding self-interest. We need problem-solving, not battles of attrition from hardened, silo positions of unions, government, and management, or ITS versus the rest, or any entrenched interest group. These legacy positions are “dug in”, and perpetual confrontation leads to desecration: of service capability, of competitive staying power, productivity and of sheer employability. There is so much more they could do for a potential one billion users.

It isn’t that self-improvement is not being attempted, like the Sanchar Nigam Executives Association (SNEA) addressing processes such as Call Detail Record (CDR) systems for customer care and billing, or Managed Services and Managed Capacity, Bharti’s innovations in outsourcing not only development and maintenance, but even procurement to Ericsson, as recommended by the Pitroda committee.** The change that is required is for all groups to pull together, however simplistic it may sound. Then, these national assets — the networks and human resources — can be leveraged to compete effectively with private operators.

Read the original article in Business Standard

For more details visit http://editors.cis-india.org/telecom/blog/ring-tone

The Problems That Should Occupy Our Electioneers

Shyam Ponappa — 2018-08-01T00:03:12Z

The prize in the elections next year could be a winner's curse.

The article was published originally in Business Standard on July 5, 2018 and mirrored in Organizing India Blogspot the following day.

The preoccupation with state and Parliamentary elections that is now manifest may take away attention from the economy. Despite some encouraging developments, major structural problems such as the non-performing assets (NPAs) in banks and stalled projects await resolution. They need urgent attention beyond the din of politics.

First, the good news

Gross fixed capital formation improved to an all-time high of Rs 111.85 billion in the last quarter of 2017-18 from Rs 102.40 billion in the previous quarter.
There was some credit growth, with non-food credit increasing 11.1 per cent in May 2018, compared to 4.1 per cent a year ago. Credit to the services sector also increased by 21.9 per cent compared to 4.0 per cent in May 2017, and personal loans grew 18.6 per cent compared to 13.7 per cent in May 2017. However, areas such as infrastructure, basic metals and metal products, construction, gems and jewellery, and vehicles and transport actually declined.
The Insolvency and Bankruptcy Code (IBC) is apparently being implemented more effectively than it might appear. A Brookings Institution report of a conference of financial experts, including a former Deputy Governor of the Reserve Bank of India, in Mumbai in February states: “50 per cent of all NPAs are currently being resolved through the Code, another 25 per cent will soon be. The judiciary has been following the (very tight) timelines prescribed by the Code.”¹
This week, a public sector bankers’ committee recommended potential solutions for NPAs to the finance ministry. These include an asset management company for stressed assets run by the banks, an asset trading platform for loans, an inter-creditor agreement between banks with the lead bank authorised to implement time-bound resolution, and finally, the IBC and sell off. Sceptics may mistrust these as being too cosy. Realistically, however, we have to accept that functioning together for mutual benefit requires trust, built around good organisation with checks and balances, and validation (observed in the breach in the complicit NPAs). In Ronald Reagan’s phrase (actually a Russian proverb), “Trust, but verify”.

So, is the glass half-full or half-empty? The bad news Here are just two examples of the looming problems.

Stalled projects: An RBI circular of February 12, 2018, was like a guillotine on a number of private power projects with inadequate cash flows because of circumstances beyond their control. The circular directed banks to begin the resolution (sell off) process for all delayed projects, including those where debt restructuring was under way. There’s a school of thought embodied in this directive that uniform criteria must be applied to all defaulters. Another approach advocated by the power ministry is that there can be problems outside the developers’ control for which they are not responsible, such as a shortage of fuel, denial of access to captive mines, financial weakness of distribution companies, or delays in government or regulatory clearances. Developers cannot control these, and therefore such projects should be excluded from the purview of the RBI Circular. A Parliamentary Committee also recommended this in March.² The Allahabad High Court, hearing a petition by the Independent Power Producers Association of India against insolvency proceedings, ordered that “no action be taken against the power sector under the revised framework, and directed the finance secretary to hold a meeting with his counterparts in the power and coal ministries, along with representatives of the RBI and the Insolvency and Bankruptcy Board of India in June to discuss ways to address the issues faced by stressed power plants.”³

While the RBI held firm at this meeting on June 21, 2018 (e.g., see: https://www.business-standard.com/article/opinion/why-ibc-must-be-sector-agnostic-118070100732_1.html), the finance secretary reportedly asked for written submissions by the stakeholders. A group of experts will review these to consider next steps. The Allahabad High Court may yet save us from the brink.

Fettered policies: The Wi-Fi example

We have an odd juxtaposition, with the government eager to auction 5G spectrum for revenues, while making it available to operators. The industry wants the spectrum but is overburdened with debt, which it already has difficulty servicing because of hyper-competitive price cutting. In addition, there’s a vast, underserved rural and semi-urban market, which requires even more capital investment. Finally, there are the stressed banks, which have thus far been the major source of funding. Meanwhile, our fettered approach to 5 GHz for Wi-Fi is an example of policies that need unleashing. India’s National Frequency Allocation Plan (NFAP) has delicensed 380 MHz in the 5 GHz band. This is 200 MHz less than required by the standard, so users have less spectrum. Second, India permits only 50 MHz for outdoor use, and the remaining 330 MHz for indoor use. This severely constrains the use of this band and available devices in India, making it ineffectual for Wi-Fi hotspots in both urban and rural areas. We need an amendment in India's 5G policy to conform to international standards. There need be no indoor/outdoor restrictions and less restrictive power limitations, as in the USA. It could mean adopting policies in sync with global markets. For users, it means that any compatible device from any market can be used without customisation. This allows easier installation and maintenance because no customised set-up is required. For manufacturers, devices they make that conform to global or large-market standards can be used wherever these standards apply, which gives access to more markets. Both attributes facilitate higher volumes, which help result in lower prices, making devices more affordable. All users benefit from the full capacity of the device provided it is in a compatible system. Unfettering changes like this and for 60 GHz, as another example, will unleash Wi-Fi. This is the kind of policy change that is required to unfetter ourselves. What’s needed is an attitude of thinking constructively, instead of meanly or restrictively. Without such constructive changes, the way ahead will be hard regardless of who wins the next elections.

Shyam dot Ponappa at gmail dot com

https://www.brookings.edu/blog/up-front/2018/03/01/how-to-solve-issue-of-rising-non-performing-assets-in-indian-public-sector-banks/
164.100.47.193/lsscommittee/Energy/16_Energy_37.pdf
https://powerline.net.in/2018/06/30/seeking-a-reprieve/

For more details visit http://editors.cis-india.org/telecom/blog/organizing-india-blogspot-shyam-ponappa-july-6-2018-problems-that-should-occupy-our-electioneers

The policy langurs

Shyam Ponappa — 2012-05-10T10:15:17Z

The comforts of civilised living for all Indians require dedicated collective effort. The article by Shyam Ponappa was published in the Business Standard on 6 January 2011.

At this difficult point in our hapless trajectory as we thread our way through the divine comedy, there is a sudden burst of light, cutting through the gloom of the new year: an uncharacteristic but effective bipartisan effort by a group of parliamentarians in dealing with a practical problem. This is the saga of the hapless and troublesome monkeys of Raisina Hill and its environs, booted out by the Brits to build the Rashtrapati Bhavan and the Central Secretariat, and the parliamentarians who live on Mahadev Road nearby. Press reports say that BJP Spokesman Prakash Javadekar adopted a problem-solving approach by suggesting to six of his neighbours (five Congress MPs and one Independent) that they collectively hire a langur patrol to shoo away the monkeys that have been marauding in their gardens. Five of the six responded positively, and so they have a langur patrol, as do a number of government buildings there. And the monkeys stay away.

Why is this important? Because of how powerfully it illustrates the obvious: that collective, goal-oriented action can be very effective in achieving results. Now, if this could be extended to bipartisan initiatives (in the sense of government and the Opposition in the context of our fragmented politics), e.g. in building national assets like infrastructure, then constructive, forward-looking policies can be framed, and we can start building on what has gone before. This will take us past the blight of being in a perpetual stall. One example is resource-sharing for countrywide broadband and communications services. Another is our approach to energy production and supply. And so on.

The bipartisan imperative

I have written earlier on the rationale for spectrum- and network-sharing for broadband and telecommunications.

The framework for this kind of resource-sharing and organisation cannot be done without bipartisan efforts at the policy formulation stage for conceptualisation and during implementation, because various state and local governments will be involved, as will many central government ministries and departments. A bipartisan approach is also essential for devising supportive tax policies, including the development and execution of uniform, inexpensive rights-of-way charges at the state level. Not least will be the question of spectrum pricing, a matter muddied by so much contention and confused thinking regarding the economics and the technology, aggravated by opportunists seeking to make a killing, together with the well-intentioned but ill-informed flailing of strident advocates urging counterproductive measures like cancelling licences without due process and/or holding more auctions, all supposedly in the national interest, oblivious of the consequences.(Click for OPTIC FIBRE CABLE NETWORK)

To appreciate the compelling logic, consider the network of an organisation like RailTel, with over 35,000 route km of optical fibre cable (OFC) network, or Gailtel with about 14,000 route km of OFC and planning close to 19,000 OFC in the next few years (interactive maps at: http://www.gailonline.com/gailnewsite/businesses/telecomnetwork.html).

BSNL has over 67,000 route km in the southern region alone, and other PSUs and private operators like Bharti Airtel and Reliance have their own extensive networks. Combining or integrating these will shift the focus to the tasks of last-mile access and spectrum deployment to achieve potential connectivity for most households and users.

Imagine the potential with some (three or four?) consortiums of wholesale service providers for the country having access to the combined networks of all or several such owners, including the collective capacity in terms of spectrum, access, aggregation and backhaul. These, in turn, could enable access to many retailers for local services to end users.

A second substantive aspect of such a bipartisan initiative is in structuring the national backbone facilities organisation, e.g. on the lines of Singapore’s OpenNet*. This may be an opportunity to capitalise on the BSNL and MTNL networks and revive them, perhaps as the anchor investors (possibly with other PSUs, such as RailTel, GAIL, and Powergrid). This anchor investor consortium could hold, for instance, 30 per cent of the equity in the venture. Other participants could include international companies like Axia, which design, build and operate next generation networks. Axia started out in Canada over 10 years ago and now has projects in France, Spain and Singapore, and has bid for a project in America. Other participants could be like Spectrum Bridge, a US company which runs centrally managed spectrum networks in America in the TV “white spaces”, the digital dividend from TV spectrum reallocated for telecom purposes. Their database-driven approach could be applied to the entire pooled spectrum of a large network with the participation of systems integrators like Infosys, TCS, Wipro, or IBM.

A third potential initiative is to encourage R&D and applications, perhaps seeking the development of local standards for wireless communications in the long term, even the Holy Grail of inexpensive “cognitive radio” (self-managing end-user equipment) with open spectrum. The size of our market offers the potential for such ambitious and potentially beneficial development. This will need policy support, especially for collaboration between defence and the private sector, with the creation of sustained support over a long period.

We know the apocryphal tales like that of the four bulls and the lion: the bulls are safe as long as they stay united, but when they squabble among themselves, the lion picks them off one by one. There is Aesop’s fable of the old man who shows his sons that while they can easily break one stick at a time, the same sticks bound together cannot be broken. Or the Mongolian story of the five siblings, the ancestors of the Mongolian clans, whose mother shows them that while each can easily break a single arrow, the five arrows tied together are unbreakable.

Despite this knowledge and evidence that the comforts of civilised living for all Indians require dedicated collective effort, we refuse to work to this truism of the need for collaborative effort. Suddenly, Mr Javadekar’s can-do Langur Initiative changes the game.

Even as the due process of law continues with regard to past wrongdoing, our parliamentarians should be grappling with substantive issues of nation-building such as those described above, instead of wasting time on tearing each other down.

Read the original in the Business Standard here

For more details visit http://editors.cis-india.org/telecom/blog/policy-langurs

The Indian Wireless Telegraphy Act, 1933

snehashish — 2013-03-15T06:16:55Z

In this module, Snehashish Ghosh throws light on the main objective of the Act — that of regulating the possession of wireless telegraphy apparatus.

The main objective of the Indian Wireless Telegraphy Act, 1933 is ‘to regulate the possession of wireless telegraphy apparatus’. One of the major sources of revenue for the Indian State Broadcasting Service was revenue from the licence fee from working of wireless apparatus under the Indian Telegraph Act, 1885.

The Indian State Broadcasting Service was losing revenue due to lack of legislation for prosecuting persons using unlicensed wireless apparatus as it was difficult to trace them at the first place and then prove that such instrument has been installed, worked and maintained without licence. Therefore, the current legislation was proposed, in order to prohibit possession of wireless telegraphy apparatus without licence.

Presently the Act is used to prosecute cases, related to illegal possession and transmission via satellite phones. Any person who wishes to use satellite phones for communication purposes has to get licence from the Department of Telecommunications. Recently foreign tourists were charged under this Act for illegal possession of satellite phones.[*]

The extent of the Act, definitions and key concepts are covered under sections 1 and 2 of the Act. Section 3 prohibits any person from possessing a ‘wireless telegraphy apparatus’ without a licence. Under section 2(2) of the Act, ‘wireless telegraphy apparatus’ is defined as:

"any apparatus, appliance, instrument or material used or capable of use in wireless communication, and includes any article determined by rule made under section 10 to be wireless telegraphy apparatus, but does not include any such apparatus, appliance, instrument or material commonly used for other electrical purposes, unless it has been specially designed or adapted for wireless communication or forms part of some apparatus, appliance, instrument or material specially so designed or adapted, nor any article determined by rule made under section 10 not to be wireless telegraphy apparatus."

The key ingredients of the definition are:

The definition covers all types of apparatus, appliance, instrument or material which can be used or utilized for the purpose of wireless communication.
It also covers all articles which are determined to be a wireless apparatus according to the rules made by the government.
The definition excludes any apparatus, appliance, and instrument or materials which are generally used for other electrical purposes. However, if such devices are designed or modified for wireless communication or is used as a part of such wireless communication device.
It also excludes articles determined by the government not to be wireless apparatus. The government may make rules to that effect.

The Central Government under section 4 has the power to make rules to exempt persons from the provision of the Act. Such exemption given by the Central Government may be a general exemption or based on certain conditions. It may exempt certain persons from the application of the Act, for certain wireless telegraphy apparatus only.

Under section 5, the telegraph authority constituted under the Indian Telegraph Act, 1885 shall be the competent authority to issue licences under this Act.

Section 6 deals with offences and penalties under the Act.

Section	Ingredients	Penalty/Fine
6(1)	Whoever possesses any wireless telegraphy apparatus, other than a wireless transmitter, without a licence	In the case of the first offence: Fine which may extend to Rs. 100. In the case of a second or subsequent offence: Fine which may extend to two hundred and fifty rupees.
6(1A)	Whoever possesses any wireless transmitter without a licence	Imprisonment: extend to three years, or with fine which may extend to Rs. 1000 or with both.

In the context of evidentiary value, the court might presume that a person is in possession of a wireless telegraphy apparatus under the circumstances that such apparatus is under his ostensible charge or it is present in a place or premise over which he as effective control.

In a trial of an offence under section 6, if the accused is convicted then the court shall also decide whether the apparatus used or involved in the offence should be confiscated. If the court decides in favour of confiscation then it must also pass an order of confiscation.

Under section 7 the Act, gives power to any officer specially empowered by the Central Government to search any building, vessel or place if he has reason to believe that there is any wireless telegraphy apparatus which has been used to commit offence under section 6 of the Act, is kept or concealed. The office also has the power to confiscate the apparatus.

Under section 8, all wireless telegraphy apparatus which has been confiscated by the Central Government under section 6(3) shall be considered as the property of the Central Government. All wireless telegraphy apparatus which does not have any ostensible owner shall also belong to the Central Government.

Section 9 was repealed by the India Wireless Telegraphy (Amendment) Act, 1940.

Section 10 gives power to the Central Government to make rules through notification in the official gazette with respect to give effect to provisions under the Act. The Act lays down few general subjects on which the Central Government has the power to make rules under the Act. They are:

Rules to determine whether any article or class of article shall fall within the definition of ‘wireless telegraphy apparatus’ under the Act.

Rules regarding licences. (manner, conditions, issue, renewal, suspension and cancellation of licence).

Eligibility for the purpose of being exempted from the application of this Act (Sec.4).

Maintenance of records as to sale, acquisition of wireless telegraphy apparatus by dealers.

Conditions with respect to sale of wireless telegraphy apparatus by dealer and manufactures of such apparatus.

The Central Government may impose a fine of upto hundred rupees in the case of breach of such rules.

Section 11 expressly mentions that no provision under the Act shall authorise any person to do any act which is prohibited under the India Telegraph Act, 1885. It also mentions that any licence under the Act shall not authorise any act in contravention of the Indian Telegraph Act, 1885.

[*].Rajeev Dikshit, DoT nod for use of satellite phones a must, The Times of Inda Jun 27, 2012 available at http://articles.timesofindia.indiatimes.com/2012-06-27/varanasi/32440227_1_satellite-phone-thuraya-dot-nod

For more details visit http://editors.cis-india.org/telecom/resources/indian-wireless-telegraphy-act

The Huawei pointer

Shyam Ponappa — 2018-05-06T13:04:40Z

Taking a cue from Huawei. Huawei has an awe-inspiring record of drive, perseverance, fortuitous circumstances, good strategy, execution, and success.

The article was published in the Business Standard on May 3, 2018 and in Organizing India Blogspot also on May 3, 2018

A Chinese communications company founded in 1987 in Shenzhen by a former army engineer, Ren Zhengfei, Huawei is now a legend. By 2012, it overtook industry leader Ericsson in global revenues. In 2017, its revenues were over $90 billion, two-thirds from outside China. It also has a significant and growing presence in India. How did they do it?

Part of Huawei’s mystique stems from its outstanding founder and its driven work culture. This may be unique and difficult to replicate, but it is a byword for hard-charging Chinese high-tech. A meme that epitomises the culture is “9-9-6” — that is, for 9:00 am to 9:00 pm, 6 days a week. Can factors driving its success to be adopted at the policy level and in enterprises in a democracy?

My previous column addressed the hollowing out of our manufacturing and other abilities. My suggestion is to replace obstructive policies with others that facilitate building infrastructure and local capacity, especially in growth areas. The example of Huawei provides a pointer. Perhaps some of what we learn can be applied at the governmental and the corporate levels.

Reports suggest these key factors in its success:

Strong leadership with a sense of purpose: A customer-first attitude. There’s an anecdote of the founder being willing to meet any customer, but ignoring a potential investor by delegating to a colleague a meeting with a Morgan Stanley team, led by Chief Economist Stephen Roach.
Broad employee ownership: In 2014, 84,000 employees out of 150,000 owned stock along with the founder, who owned only 1.4 per cent.2 They share an understanding that while an IPO would enrich some, the majority would lose their motivation. The essential requirements are hard work and dedication.
Government support: Huawei grew revenues by building market share in China to become a national champion, then got support from the China Development Bank. Initially for $10 billion, it is now $30 billion.3 Building networks in Africa and Latin America, and low prices helped win deals in Europe. Mr Ren himself has said that without policy support, Huawei would not exist.
Its unique culture and organisation: From inception, the founder was passionate about management, and about adapting methods and organisation. For instance, Huawei devised a top management model of a rotating CEO among three top executives, each of whom leads for six months, modelled on a flight of geese that change their order in arrowhead formation.4 Mr Ren is the mentor and coach. In March 2018 there was a change to a rotating Chairman position.

(The founder’s daughter, Meng Wanzhou (aka Sabrina Meng) is the Chief Financial Officer, and holds one of four vice-chair positions. His son Ren Ping works for a subsidiary providing reservations and trade show support.)

Another instance is Huawei’s Integrated Financial Services transformation program, which Ms Meng led since 2007. It was an eight-year partnership program between Huawei and IBM to develop data systems and resource allocation rules, operations, process optimisation, and internal controls.

Huawei reportedly invests 10 per cent of annual revenues on Research & Development.
Huawei also emphasises “the power of thinking”. Executives are urged to read beyond their domains, and books are everywhere.

These factors enable Huawei to solve problems for clients in diverse situations. Examples:

In its early days, networks were at risk from rats gnawing through circuitry in desert and rural areas in China. Multinational vendors did not consider this their problem and left it to their customers. Huawei, by contrast, treated it as their own problem, and developed sturdier equipment and materials such as chew-proof wires. This experience later helped gain large accounts in the Middle East where customers faced similar problems.
Other extreme environmental conditions have been addressed, such as base stations installed at high altitudes (at 6,500 metres on Mt Everest), or in the Arctic. These experiences helped a dedicated and committed workforce gain more clients. For instance, when expanding their 3G market in Europe, Huawei found that clients expected “base stations to be more compact, easier to install, greener, and more energy efficient, while offering wider coverage”. To cater to these needs, Huawei developed distributed base stations that could handle both large and small private networks, making them cheaper to deploy, which became popular with European carriers.
The employee-ownership arrangement and associated dedication enable planning for the long term, as with the Chinese government. Huawei plans for 10 years, whereas competitors have to contend with quarterly financial considerations.

Carriers buying Huawei network equipment get significant discounts in smartphones. Focusing on new technology not controlled by the giants of 3G such as Qualcomm, Ericsson, and Nokia, enabled Huawei to develop 4G, which is much faster and ideally suited for updating-apps, to the point that it competes with Samsung and Apple. Undercutting competitors has enabled it to sell to carriers, and its depth of products and technology has enabled it to meet customer needs, displacing competitors.

Huawei’s R&D Centre in Bangalore established in 1999 is its largest outside China, and it has offshore Global Network Operating Centres in Gurgaon and Bangalore, besides Romania and Nigeria. These GNOCs run networks not only in India but across the globe for a number of operators, offering managed network services integrating a range of equipment at low cost. With its market strength, depth of products, and access to funds, Huawei is likely to control network services in India and much of the world from now on through the 5G evolution cycle.

The only way for competition other than in-house NOCs in India is if the Government of India develops end-to-end supportive policies, transcends election cycles, and sponsors a consortium comprising a major transnational anchor, a system integrator, and local design and production wherever technological opportunities arise.

References

1. David De Cremer and Tian Tao: https://hbr.org/2015/06/huaweis-culture-is-the-key-to-its-success

2. Rebecca Blumenstein: https://www.wsj.com/articles/the-secret-of-huaweis-success-1414963782

3. Scott Sendrowski: http://fortune.com/huawei-china-smartphone/?iid=sr-link1

4. Belasco, James A. Stayer, Ralph C. (1993). Flight of the Buffalo. New York, NY: Warner Books.

For more details visit http://editors.cis-india.org/telecom/blog/business-standard-shyam-ponappa-may-3-2018-huawei-pointer

The Huawei bogey

gurshabad — 2019-06-05T03:38:19Z

India needs to prove company aids Chinese government, or risk playing into US hands.

The article by Gurshabad Grover was published in Indian Express on May 30, 2019.

The Trump administration has not only passed orders restricting the US government and its departments from procuring networking equipment from Chinese companies, but is exerting considerable pressure on other countries to follow suit. The fear that Huawei and ZTE will aid Chinese espionage and surveillance operations has become common even though there has been no compelling evidence to suggest that Huawei’s equipment is substantively different from its competitors.

These events have also sparked a larger debate about the security of India’s communications infrastructure, an industry powered by foreign imports. Commentators have not shied away from suggesting that India ban the import of network equipment. C Raja Mohan, in ‘The tech wars are here’ (IE, December 11, 2018), expressed these concerns and asked whether Chinese telecom equipment manufacturers should be allowed to operate in India. A larger point was made by D S Hooda in his piece, ‘At digital war’ (IE, October 25, 2018). He pointed out threats that arise from using untrusted software and hardware all over the stack: From Chinese networking middleboxes to American operating systems and media platforms. As a method to establish trust in ICT infrastructure, Hooda recommends “indigenis[ing] our cyber space”.

The path towards indigenised manufacturing of networking equipment is an expensive, elaborate process. Restricting certain foreign companies from operating in the country without evidence would be a knee-jerk reaction solely based on cues from US policy, and would undermine India’s strategic autonomy.

At the heart of threats from untrusted software or hardware, lies an information asymmetry between the buyer and seller. It is not always possible to audit the functioning of every product that you purchase. Open technical standards, developed by various standards development organisations (SDOs), govern the behaviour of networking software, and remove this information asymmetry: They allow buyers to glean or implicitly trust operational and security aspects of the equipment.

It is clear that various governments including India have repeatedly failed to advance privacy and security in the 5G standards, which are developed at the 3rd Generation Partnership Project (3GPP) — the organisation developing standards for telephony. Government and industry dominance at the 3GPP has ensured that telecom technologies include security vulnerabilities that are euphemistically termed as “lawful interception”. From an architectural perspective, 5G does not contain any significant vulnerabilities that were absent in older telecom standards. Unfortunately, these vulnerabilities are indifferent to those who exploit them: A security exception for law enforcement is tantamount to a security vulnerability for malicious actors. As the report from UK’s Huawei Cyber Security Evaluation Centre Oversight Board confirmed, there is perhaps no technical way to mitigate the security risks that 5G poses now. But there is still no evidence to suggest that Huawei is operating differently from say Ericsson or Nokia.

India needs to establish that Huawei is aiding the Chinese government through their products (5G or otherwise) before reacting. That Chinese companies are rarely insulated from Beijing’s influence is indisputable. However, the legal requirements placed on Chinese companies by Beijing are equivalent to de facto practices of countries like the US, which has a history of intercepting equipment from American companies to introduce vulnerabilities, or directly compelling them to aid intelligence operations. Such influence should be fought back by pushing for international norms that prevent states from acquiring data from companies en masse, and domestic data protection legislation.

In the long term, the Indian government and its defence wings would benefit from understanding the argument Lawrence Lessig has made since the 1990s: Decisions of technical architecture have far-reaching regulatory effects. A long-term strategy that focuses on advancing security at technical SDOs will prove more effective in ensuring the security of India’s critical infrastructure than the economically expensive push for indigenisation.

For more details visit http://editors.cis-india.org/telecom/blog/indian-express-may-30-2019-gurshabad-grover-the-huawei-bogey

The Free Basics debate: Trai has a point in imposing temporary ban on net neutrality

sunil — 2015-12-25T14:58:30Z

The argument against net neutrality in India is simple. Regulation cannot be based on dogma – evidence of harm must be provided before you can advocate for rules for ISPs and telecom operators.

The article was published in FirstPost on December 24, 2015.

But net neutrality regardless of your preferred definition is a very complex regulatory question and there is no global or even national consensus on what counts as relevant evidence. To demonstrate the chain of causality between network neutrality violations and a variety of potential harms - expertise in a wide variety of fields such as economics, competition law, telecom policy, spectrum allocation, communications engineering and traffic management is required. Even with a very large research budget and a multidisciplinary team it would be impossible to predict with confidence what the impact of a particular regulatory option will be on the digital divide or innovation. And therefore the advocates of forbearance say that the Indian telecom regulator — Trai — should not regulate unprecedented technical and business model innovations like Facebook's Free Basics since we don't understand them.

Till recently I agreed with this empirical line of argument. But increasingly I am less convinced that scientific experiment and evidence is the only basis for regulation. Perhaps there is a small but necessary role for principles or ideology. Like the subtitle of Nassim Nicholas Taleb's book, we need to ask: How to Live in a World We Don't Understand. Let us take another area of technological regulation – cyber security. Do we really need to build a centralised database containing the passwords of all netizens and perform scientific experiments on it to establish that it can be compromised? A 100 percent centralised system has a single point of failure and therefore from a security perspective centralisation is almost always a bad idea. How are we so sure that such a system will be compromised at some date? To quote Sherlock Holmes: “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.” Decentralisation eliminates the possibility of a single point of failure thereby growing resilience. The Internet is perhaps the most famous example. It is not necessarily true that all decentralized systems are more secure than all centralised system of a decentralized network but it is usually the case. In other words, the principle of decentralisation in cyber security does not require repeated experimental confirmation across
markets and technologies.

To complicate matters, the most optimal solutions developed using economics and engineering may not be acceptable to most stakeholders. Professor Vishal Misra has provided a Shapley Value solution using cooperative game theory in the multi-sided market to determine how surplus should be divided between three types of ISPs [eyeball, transit and content] and Internet companies using transparent paid transit arrangements. But a migration from the current opaque arrangement to the Misra solution may never happen because Internet companies will resist such proposals and are increasingly getting into access provision themselves through projects like Google Fibre and Loom. Walter Brown from South African Communications Forum proposes that billing by minutes for phone calls and billing by message for SMSes should be prohibited because on 4G networks voice and text messages are carried as data and price is the best signal to consumers to ensure optimum use of network resources. This according to Walter Brown will eliminate the incentive for telcos to throttle or block or charge differently for VOIP traffic. Again this solution will not be adopted by any regulator because regulators prefer incremental changes with the least amount of disruption.

So given that we only have numbers that we can't trust - what should be some of the principles that form the bedrock of our net neutrality policy? To begin with there is the obvious principle of non-discrimination. The premise is simple – anyone who has gate-keeping powers might abuse it. Therefore we need to eliminate the possibility through regulation. Non-exclusivity is the result of non-discrimination and transparency is its precondition. That can also be considered as a principle and now we have three core principles to work with. Maybe that is sufficient since we should keep principles to the bare minimum to keep regulation and compliance with regulation simple. Some net
neutrality experts have also identified fairness and proportionality as additional principles. How do we settle this? Through transparent and participatory policy development as has been the case so far. Once we have principles articulated in law - how can we apply them to a specific case such as Facebook's Free Basics? Through the office of the appropriate regulator. As Chris Marsden advocates, net neutrality regulations should ideally be positive and forward looking. Positive in the sense that there should be more positive obligations and incentives than prohibitions and punitive measures. Forward looking in the sense that that the regulations should not retard or block technological and business model innovations. For example zero-rated walled gardens could be regulated by requiring that promoters such as Facebook also provide 50Mb of data per day to all users of Free Basics and also by requiring that Reliance provides the very same free service to other parties that want to compete with Facebook with similar offerings. Alternatively, users of Free Basics should get access to the whole Internet every other hour. All these proposal ensure that Facebook and it business partners have a incentive to innovate but at the same time ensures that resultant harms are mitigated.

Just to be absolutely clear, my defense of principle based regulation does not mean that I see no role for evidence and research. As regulation gets under way – further regulation or forbearance should be informed by evidence. But lack of evidence of harm is not an excuse for regulatory forbearance. India is the last market on the planet where the walled garden can be bigger than the Internet – and Facebook is sure giving it its very best shot. Fortunately for us Trai has acted and acted appropriately by issuing a temporary prohibition till regulation has been finalised. Like the US, coming up with stable regulation may take 10 years and we cannot let Facebook shape the market till then.

For more details visit http://editors.cis-india.org/telecom/blog/the-free-basics-debate-trai-has-a-point-in-imposing-temporary-ban-on-net-neutrality

The Coming Telecom Monopoly

Shyam Ponappa — 2012-05-24T07:36:55Z

The 2G judgment and Trai spectrum pricing recommendations have led to a policy that makes sense for only one survivor.

Shyam Ponappa's column was published in the Business Standard on May 3, 2012

The Telecom Regulatory Authority of India, or Trai, has delivered a stunning blow to the telecom sector in the form of its spectrum pricing and refarming recommendations. The sector was already reeling from scandals and misgovernance, and staggered by a confused Supreme Court judgment based on inappropriate assumptions (for details, see “Time for a review”, March 1, 2012, and “Open access is the future,” March 4, 2012). This will cripple an erstwhile sunrise sector that drove (and still can) India’s prosperity through productivity, enabling many factors to converge positively — such as its economic momentum, enterprise, resilience and, most important, a demographic bulge that could become a blessing or a curse. This convergence was (and is) possible because of the enabling ability of telecom and broadband to provide access to education, vocational training and continuing education; health care and other public services; and commerce, including the delivery of individual output, within easy reach. All this is stalled, as we deliberately disembowel ourselves, as it were.

If Trai’s recommendations are implemented, they will ensure that a lone survivor dominates the sector, annihilating all significant competitors – Bharti, Vodafone, Idea, Tata, and newcomers like Telenor and Sistema – through their having to pay exorbitant fees just to keep their current business going, even without expansion. That is, provided the lawsuits that are likely to follow don’t obliterate everything for the next 10 years.

Are these setbacks happenstance, heaven-sent, or acts of man? Analysing the components shows that much is attributable to the machinations of men, although rendered by different individuals or groups under varying compulsions. The afflictions that began with cronyism and misgovernance have been aggravated by a judgment based on misapprehensions regarding: (a) spectrum technology; (b) the economics of auctions and; (c) competition in network economies.

In trying to get at the corrupt nexus of corporations, politicians, bureaucrats, and just plain crooked people, indiscriminate zealotry is destroying legitimate enterprise. The judgment lumps the guilty with the circumstantially proximate. Coupled with defining auctions as best for the public interest, this set the stage for what has followed. The furore over corruption and the Anna Hazare movement ensure that any objective recommendation would come under fire, with a mobocracy baying for revenge.

Is being deprived of ubiquitous, reasonably-priced broadband so devastating? Yes, because of broadband’s great potential in India’s vastness for enabling people at relatively low cost, compared with, say, fixing energy supply, or sanitation and water, or roads, or growing food. All these are necessary; but broadband is much easier to achieve, at lower cost, and would bring it all more easily within our grasp, especially in rural areas.

Performance

Some question the beneficial effect of revenue sharing from the National Telecom Policy, 1999, (NTP-99) suggesting the sector might have done as well or better without the change. Pakistan is cited as an example for growth with auctions. Consider the performance of the sector in both countries.

Chart 1 - Mobile Subscriptions (Millions) 2003-2010

(The third line shows India’s numbers reduced to 70 per cent, reflecting an estimate of live subscriptions.)

Chart 2 shows the percentage of population served. Pakistan’s coverage grew

Chart 2: Percent Population Covered

Sources: India – TRAI; PIB; http://en.wikipedia.org/wiki/Telecommunications_Statistics_in_India
Pakistan - http://www.pta.gov.pk/index.php

rapidly until about 60 per cent, then tapered off. India started more gradually before accelerating to 60 per cent a couple of years later, and kept going. In March 2011, both were around 70 per cent. At the end of December 2011, India was at 76.86 per cent.

However, there are two major differences. One is the scale of India’s operations. Sheer magnitude makes for much greater complexity, and the achievement is therefore remarkable. The second is the significantly higher government levies in India. India’s telecom sector is perhaps the world’s most heavily burdened, with government collections higher than in Pakistan by 15 to 24 per cent of revenues.* (Compared with China,where government charges are only 3.5 per cent, India’s levies are even more grossly out of line.) Had Indian enterprises not had this burden, it’s conceivable they might have had the capacity and stomach to effectively address rural coverage, especially with the right incentives.

Achieving Ubiquitous Broadband

Now consider what needs doing for countrywide access to broadband, and what odds have to be overcome. First, there’s the addition necessary to rural and semi-urban networks, where almost three times the existing coverage is needed. Much of this needs wireless access. This is why spectrum pricing critically affects outcomes. Many people in India harp on a litany of sunk-costs-not-affecting-tariffs, oblivious to the vast deficiency in network coverage, ie, areas and people without access. It’s like arguing over pricing without any production plant or products. Without capital investments in network coverage, there can be no services, nor any tariffs, high or low. There is little doubt of the effects of high spectrum and licence fees: these needs remain unmet. Hence the low rural teledensity of under 39 per cent at the end of February 2012, with urban coverage at nearly 170 per cent, and overall teledensity at 78 per cent. Separately, there’s the issue of inadequate incentives for broadband delivery.

Statements from Trai and the Department of Telecommunications about the spectrum pricing recommendations being reasonable because of the revenue potential simply don’t add up. Their projections are based on a fantasy of booming growth (like the Budget projection of 7.6 per cent GDP growth, but even more exaggerated). Whereas the combined effect of the scam and its fallout, sentiment, momentum, and misguided efforts at tax-gouging will ensure that telecom revenue growth is no more than a stunted five to seven per cent, at best. No bank will lend seven-year funds in such uncertain circumstances to what was once a sunrise sector — but is now like heavy infrastructure, with a need for 20-year financing. Add the costs and difficulty of refarming the 900 MHz spectrum, and one has to wonder: who is going to bid, and why? It makes sense only for one survivor. All this is aside from the extension of subsidised non-performance at the PSUs, instead of transforming them into anchors of an open-access national network.

For more details visit http://editors.cis-india.org/telecom/coming-telecom-monopoly

The Challenges of Direct Democracy

Shyam Ponappa — 2012-01-30T12:51:10Z

India must weigh the pros and cons of various approaches to direct democracy and develop one of its own.

Direct democracy is alluring. The dangers to our society and economy from reckless governance as well as confrontational activists, however, are the undermining of institutions, and the unintended consequences.

Our governments have a carry-over of feudal and colonial attitudes and do not communicate unless they must. Change is accepted only under duress, and is not initiated through leadership. Mismanagement is tolerated, resulting in various scams such as the 2G spectrum scam and associated problems.

The current anti-corruption drive by Anna Hazare et al and their well-intentioned cohorts uses tactics that echo a righteous, anti-authoritarian and non-collaborative pattern of “us” versus “them”, combined with an insistence on their way alone. Yet, collaboration is essential for solutions that lead to an equilibrium, recognising the legitimacy of all stakeholders – the government and civil society – as well as the criticality of credible institutions and processes.

We in India are not alone in being drawn to direct democracy. Switzerland’s success in citizen participation combined with its federal structure is the epitome of a workable system. But this model cannot simply be transplanted without regard to cultural contexts. Consider the sobering example of California.

California's Predicament

California has been in a state of financial crisis for several years. In 30 years, the Golden State’s credit rating fell from among the best of the 50 states to the worst. Despite everything from Silicon Valley to agriculture, defence, aerospace, biotechnology and Hollywood, why can this state not manage itself? Why does The Economist quote labels like “dysfunctional”, “ungovernable”, even “failed” for this El Dorado (April 20)? To understand what happened in California, we must start with its direct democracy model imported from Switzerland.

The Swiss Model

Since the 14th century, Switzerland has had a tradition of citizens participating in assemblies. Coordination among different sets of delegates, e.g. for building roads and bridges across different valleys, had to be approved by respective assemblies. On this canvas, Switzerland grafted America’s Constitution in 1848. It worked and still works because of its design, and Switzerland’s collaborative approach. Constitutional amendments require a referendum as well as a majority of votes by the cantons (states) in the legislature.

Thus, over half the cantons can overrule the popular majority in a referendum, because of the rule taken from America of two votes per state, even if they represent a minority of voters. After being approved in a referendum, the amendments go back to the legislature for redrafting. This enforces George Washington’s principle of “cool” debate outlined at the time of drafting the US Constitution, and embodied in Senate deliberations for dispassionate lawmaking. Initiatives for new laws by direct democracy go through the same process, but the legislature has the option to draft a counter-proposal. This process of engagement and negotiation is designed to avoid extreme outcomes and promote dispassionate solutions. As with America’s Constitution, this prevents two kinds of abuse: James Madison’s1 concerns regarding minority factions and their “swing vote” capturing outcomes (as in India, where minority factions become king makers), or a tyranny by the majority.

The California Variant

About 100 years ago, the Progressives in California brought in direct democracy from Switzerland. As in India today, the purpose then was to attack corruption, specifically, “The Octopus” of the Southern Pacific Railroad with its tentacles everywhere. California’s direct democracy was designed to achieve the opposite of the Swiss model. Switzerland emphasises compromise and consensus; California encourages confrontation, and the winners impose their will. Starting new initiatives (“propositions”) is easy; calling referendums on existing laws is difficult. In effect, California’s propositions are irreversible, because a retraction or reversal needs a two-thirds majority, which is virtually impossible because of minority factions and special interests.

For over half a century, there were no major problems. Then, in 1978, the anti-tax proponents initiated a property tax cap, Proposition 13. It limited state revenues (placing a ceiling on all property taxes at one per cent of the 1975 value, which could grow at no more than two per cent annually unless sold, thereby establishing a new value). There are contradictory views on the benefits of Proposition 13, with the defenders blaming opportunistic individuals, not the system, for problems. It is the old divide between tax-and-spend liberals versus cut taxes-and-services conservatives. The outcome, however, is that California went from being a liberal showcase with excellent infrastructure and services to a bankrupt state, cutting back on both.

What India Can Learn

India’s polity (at central, state, and local levels), at least now, must start creating systems that harness participation through all means available, so that the voice of popular assemblies is heard within the framework of our representative democracy, and acted upon.

The government needs to move away from the paradigm of “The Administration” against “The People”. Instead, the government must lead a process of collaborative stakeholder engagement for equitable resolution, like the one based on a lifeboat concept of shared interests and survival. As individuals, we need to move away from blaming routines (the government/everyone else is at fault, and I am a victim) to accepting the responsibility and discipline of institution building and processes.

What India Requires

Discarding feudal/colonial notions of the durbar in political parties, among politicians and in government.
Channeling righteous public anger into the constitutional process with competence and discipline. Currently, there seems to be no effective way of demonstrating dissatisfaction except by taking to the streets.

We need institutionalised incentives and penalties to steer towards these effective means, and to abandon arbitrary and angry ways.

Technology allows this on an unprecedented scale, with perhaps 100 million Internet users in India already. To harness and channel this capacity, systems need to be developed on the lines of the Obama campaign2, vastly extended with the expertise and support staff to inform citizens and channel their participation constructively within an institutional framework. These systems will need to cover everything, from issue-based analysis and presentation to spelling out responsible choices with the foreseeable consequences, and collating individual inputs and preferences. If executed with vision, imagination and commitment, this could reduce the instances of people taking to the streets.

This article by Shyam Ponappa was published in the Business Standard on July 7, 2011. Read the original here

For more details visit http://editors.cis-india.org/telecom/blog/challenges-of-direct-democracy

The Centrality of Cash Flows

Shyam Ponappa — 2015-08-25T16:27:22Z

Greece's experience tells us that cash flows are crucial to economic outcomes. No matter how far-reaching the vision, ambition, and slogans, the effects of cash flows are profound and inevitable.

The article was originally published by Business Standard on July 1 and also mirrored in Organizing India Blogspot on July 2.

Many of our politicians and bureaucrats and a large proportion of the public seem oblivious to how cash flows affect our political economy. This apparent absence of understanding (or flouting of fundamentals by opportunists who understand them but act in their own interests) shows up in many ways among all political parties in their approach to the basics: the provision and pricing of essential services such as security and law-and-order, electricity, broadband communications, transport, water, sanitation, and waste disposal. Without an understanding and acceptance of how essential cash flows are for providing these services, we can't realistically aspire to better living conditions. No matter how well or wealthy you may be, you still have to pick your way gingerly through the mess and the stench of your environs when you step out.

Cash flows are at the crux of the problems our governments face at the Centre and states, and that society is up against. They include all the legacy issues mentioned above of the inadequate infrastructure services that we endure, and extend even to problems such as the defence services pensions. While the National Democratic Alliance is not blameless, there are egregious instances among other political parties, such as the Aam Aadmi Party's (AAP's) actions on waste management and electricity supply in Delhi. The essential sticking points have been delayed (obstructed) cash flows, whether in paying sanitation workers or electricity distributors. These instances are mentioned only as indicative examples, as their processes hark back to the habitual practice of governments at the Centre and the states of delaying payments, whether it is fertiliser subsidies to manufacturers (a central government "habit" for decades), or setting realistic tariffs and making prompt payments to electricity distribution companies, as in the case of state governments running Delhi. Various parties - the Congress until 2014 and the AAP thereafter - have themselves been victims of the structural constraints of electricity generation plants with antiquated, inefficient equipment, as in the old coal-based plant at Badarpur, or efficient, modern plants using gas caught in an upward price spiral with domestic gas not being available, such as at Bawana.

In the communications sector,constrained cash flows limit services. One rough estimate is that cumulative charges for spectrum amount to about Rs 1.8 lakh-crore ($30 billion), roughly equal to the total amount invested in networks and equipment. In other words, operators could have invested double the amount in networks and equipment if it had not been paid in government charges. Operators had to take on significant debt for prior payments, thereby hampering their ability to invest in extending and upgrading their networks.The operators' financial constraints constitute one major reason that a market hungry for data services is starved. (Another major reason is the technology constraint of narrow, noncontiguous bands of spectrum, but that is another tale).

The situation in electricity supply is much worse, because of the high and still growing level of stressed assets of the state electricity boards. Press reports estimate that as much as Rs 53,000 crore may possibly become non-performing assets (NPAs) by the end of September.

There is a view that stressed assets and NPAs need not be a problem, because they can be readily sold to new owners who could reorganise the undertakings, which could succeed or go out of business if they fail. While this is theoretically possible, in practice, this is quite difficult and impractical to carry out, especially in hard times. Banks typically are not equipped to take over a number of non-performing businesses and run them until they can dispose of them. Secondly, considering the problems of being profitable in bad times combined with generating cash for operations in downbeat markets, it is unlikely that there will be acceptable buyers willing to pay reasonable prices for loss-making assets.

One difficulty in addressing such issues is that the basic concepts - of cash flows, of numbers from operations in the profit-and-loss statement in tightly coupled lockstep with the balance sheet, which leads to the cash flow statement, require a level of effort to understand that many are unwilling to put in. Cash flows are measurements of flow, whereas profit-and-loss and balance-sheet items are accumulated over specified periods such as a month or quarter, i.e., statements of stock,with no easily discernable relationship to actual cash movements in those periods. There are additional complexities in delving deeper, e.g., in considering the similarities with the flow of liquids. As cash flows are in some ways comparable to liquid flows, there is research from the perspectives of fluid dynamics that requires an understanding of more complex mathematics, physics, or engineering. For those interested in exploring these aspects, further readings are suggested here.

Put intuitively, the key is in setting up and/or taking corrective action to facilitate smooth flows, with the recognition that disruptions create turbulence. Smooth flows are laminar, as the layers or lamina of fluid move easily without mixing (see diagram). Once turbulence sets in, it takes time and often additional effort (resources) to revert to smooth flows, because the obstacles have to be removed or worked around, and the vortices and eddies created by disruptions have to be stabilised and smoothed out.

For more details visit http://editors.cis-india.org/telecom/blog/business-standard-op-ed-july-2-2015-shyam-ponappa-centrality-of-cash-flows

The Buzz Around TV White Space

Shyam Ponappa — 2015-12-16T02:21:19Z

Large blocks of underused spectrum lie tantalizingly out of reach, waiting for enabling regulation, administration, and to some extent technology, to accelerate our move towards Digital India.

The article published in the Business Standard on November 4, 2015 was mirrored in Organizing India Blogspot on November 5, 2015.

One such category is unused/underused TV spectrum or "TV White Space" (TVWS). Despite growing demand, operators face bleak prospects as they struggle to deliver, starved of spectrum and infrastructure. Their dilemma is how to extend delivery capability without choking on buying spectrum so precious it's like an albatross around their necks, leaving little capital for densifying and extending their networks.

There's a war brewing around wireless broadband trials using TVWS in India, years after completion in other countries. These frequencies are most effective for long-range broadband. Mobile operators are watchful of developments such as Microsoft getting preferential access, triggered by announcements of its partnership with the Education and Research Network (ERNET) for countrywide rural broadband. Equipment suppliers also seem apprehensive of developments that could lead to swathes of spectrum being "unlicensed", reducing markets for their established products for licensed spectrum.

This article aims to clear some of the misinformation to facilitate policies for Digital India.

What is "TV White Space"?

There's confusion and disinformation about what TVWS is. Quite simply, TVWS is unused TV spectrum, or TV bands devoid of TV signals. The meaning derives from the areas on a page without print or pictures. Microsoft calls [the technology developed for] it "White-Fi", while some call [the technology developed for] it "super Wi-Fi".

Even bands broadcasting TV programs can have underutilised sections that can carry broadband, as pioneered by researchers at Rice University in Houston, Texas. Rice has a system that uses TV bands for both broadcasting as well as broadband.1 According to researchers, although the 400 to 700MHz band is used for broadcasting TV in many US cities, its capacity is largely underutilised because of alternative ways of accessing TV signals, such as through cable, satellite, or Internet TV. Therefore, incorporating Rice's technology in TV sets or remote equipment could significantly expand the urban reach of "super Wi-Fi", and not restrict it to rural areas.

Is there any TVWS in India? Some say there isn't!

Studies across the country show that over most of it, unused TV spectrum (white space) amounts to 85 to 95 per cent of TV spectrum.2,3,4 Studies excluding northern India show that in over a third of the area, a large band -- 470 to 585 MHz -- is available for alternate use.2,4

An odd controversy has been created about whether this is "white space" or not, precisely because the spectrum is largely unused.5 The convoluted semantics are mystifying, because white space is by definition unused broadcast spectrum. The National Frequency Allocation Plan already designates this band for fixed or mobile wireless, in addition to TV. In other words, without changes in allocation, operators can share TV spectrum on a secondary basis, as in the USA, the UK, and Singapore.

Regarding spectrum usage charges, as with any infrastructure, it is much more beneficial in the public interest to provide affordable services first and to collect government fees and taxes later, than to front-load auction fees and have no services at all (imagine road systems if up-front charges had to be paid for the right to build them). Overall benefits from Digital India, which is impossible in the foreseeable future without low-cost wireless broadband connections to the NOFN and other backbone networks like ERNET, will far exceed cash collections from auctions.

Proponents of auctions suggest that TVWS be reallocated as cellular spectrum and auctioned. Their reasons: (a) The transfer of public property to private operators; (b) Transparency and fairness; and (c) Government collections. This reasoning is false and misleading, because: (a) No transfer is required, as all operators can get secondary access equitably through a consortium approach; (b) This ensures transparency and fairness; and (c) Government collections from productive use will far exceed any auction collections, as evidenced by licence fees: in 2005, estimated auction fees lost until March 2007 were Rs 20,000 crore, whereas actual collections were double, at Rs 40,000 crore; collections by March 2010 were Rs 80,000 crore, in addition to the public benefits of better services.

Should TVWS be used only for 3G & 4G?

Another negative argument is the insistence that TVWS should be auctioned for 3G and 4G. Whereas Digital India needs low-cost wireless broadband, especially for long-distance links in rural India, because of the high cost and difficulty of building and maintaining fibre or wired networks in difficult terrain, and/or in sparsely populated areas. Therefore, access to TVWS needs to be bundled with the National Optic Fibre Network/BharatNet, and other shared backbone networks like ERNET. Policies should permit different network design scenarios including transmission power and purpose. Point-to-point links are needed over long distances in place of fibre or microwave, and broad coverage is needed for contiguous areas like industrial developments, campuses, commercial complexes, or rural communities. At the user end, TVWS could interface through cellular (3G or 4G) or Wi-Fi transceivers.

TVWS does need tight radio filters (unlike Wi-Fi) to minimise interference, the underlying consideration that drives spectrum management. There's also need for varying power specifications depending on the network design and purpose as described above, and policies for unlicensed sharing using geolocation databases, as defined by the US FCC (Federal Communications Commission).

To be most beneficial, it is not important to extract the maximum carrying capacity from TVWS in every location, as in the misplaced number-of-subscribers-linked spectrum policy some years ago. Rather, the objective for Digital India is to use this technology in combination with others for the purposes people need, namely, for affordable broadband wherever they are, while mitigating radiation hazards. This is essential for India to get its basic communications infrastructure.

Shyam (no space) Ponappa at gmail dot com

1. http://news.rice.edu/2015/07/13/rice-tests-wireless-data-delivery-over-active-tv-channels-2/, Jade Boyd, September 5, 2014.
2. IIT-Hyderabad studied TVWS in southern India from 2009, shared findings with the government/other IITs from 2011, and published in 2014:http://link.springer.com/chapter/10.1007/978-3-319-08747-4_3#, Kalpana Naidu et al.
3. http://www.cse.iitd.ernet.in/~vinay/papers/coral13.pdf, Pradeep Kumar et al, June 2013, IIT-Delhi.
4. arXiv:1310.8540v1 [cs.IT], Gaurang Naik et al, 31 October 2013, IIT-Bombay.
5. https://www.linkedin.com/pulse/tv-whitespaces-how-white-spaces-parag-kar;http://www.financialexpress.com/article/fe-columnist/editorial-beware-the-white-spaces/146355/

For more details visit http://editors.cis-india.org/telecom/blog/business-standard-november-4-2015-buzz-around-tv-white-space