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                                 A

                          Dissertation on

“Convergence of Internet and Television – A Legal Perspective”



                                By

                        Shashikant Bhagat

                   Nalsar Pro ID No. MLH39_09



 A Project Paper Submitted in Partial fulfillment of P.G. Diploma in
    Media Laws for Module – III (Convergence & New Media)



                           January 2010

         Nalsar University of Law (Nalsar Pro), Hyderabad
1




                         Table of Contents


Sr.                       Heading                    Page
No.                                                   No.

01.   Introduction:                                  4-6
      Telecommunication and ‘New’ IT

02    IT in India: A History                          6-7

03.   New Computer Policy-1984                        8-9

04.   On Demand: The Future of Indian Broadcasting   10-12

05.   Future of Indian Television Broadcasting       13-14

06.   Internet Telephony and Related Issues          15-24

07.   Communication Convergence Bill’ 2001           25-32

08.   Conclusions                                    33-33

09.   Bibliography                                   34-34
1




INTRODUCTION




Telecommunication and ‘New’ Information Technologies
1


From Stand-Alone Technologies to ‘Convergence’



The concluding decades of the 20th century witnessed revolutionary
developments in the mass media, telecommunications and information
technologies. The old mass media technologies were stand – alone isolated
technologies: radio, television, cinema, the press and book publishing were
looked upon and used as distinct and discrete technologies.
Telecommunications (primarily the telegraph and the telephone) developed on
their own, and were never considered as ‘mass media’. A computer was just a
computer, a telephone was just a telephone and a television set just a box in the
corner for watching broadcast programmes. This separate and stand – alone
identity was reinforced in government administration, where the ‘mass media’.
Telecommunications and computer technologies were under three different
ministries: Information and Broadcasting, Department of Telecommunications
(DoT), and the department of Electronics. This was further reinforced in the
Indian university system where departments of communication and journalism
remained isolated from developments in telecommunications and computer
science, which of course had their own separate departments.

Besides, ownership of such technologies too was generally restricted to one or
two of the media. In Europe and the developing countries, radio and television
were government –owned and government-run, though the press and book
publishing remained the responsibility of the private sector. Film-making was in
both the public and private sector: the feature film industry was in private hands,
while newsreels, documentaries, short films and animation films were the
responsibility of the public sector.

Few attempts were made to combine the different print and electronic media;
cinema films were shown on the small screen with the help of a ‘telecine chain’
(an electronic device which can transfer film material to standard TV format), but
one could not read the newspapers on television, or listen to the radio on
television. The ‘two-in-one’ combined the radio and the audio-recording and
playback technologies. The video-recorder was an add-on to television and to
beginning of the asynchronous element in the new media. No longer were
1
listeners and viewers tied down to the exposure of radio and TV programmes at
the same time as others; this greater control of the electronic media was
gradually leading to the ‘de-massification’ of the media. The audio and cassette
recorders, the walkman, and later the personal computer were further examples
of greater audience control over content, as well as over the time and place of
media exposure. The earlier concept of a ‘mass audience’ was giving way to a
newer concept which took into account factors like flexibility and asynchornicity.

Further, in telecommunications, the telephone and the telegraph remained
isolated from the mass media, except as ‘carriers’ of information. Audio and
cassette recording and playback technologies extended radio and television,
giving them the facility of ‘delayed’ or flexibility exposure. Simultaneity of
listening and viewing gave way to media access at one’s convenience.

Communication satellites, cable, optical fiber, wireless technologies and
computers changed the very nature of mass media and telecommunications.
When the computer appeared on the scene in the 1970s and 1980s, it was a
stand – alone desktop technology; interactive, but discrete. Computers could not
‘talk’ to each other; compatibility was a critical stumbling block. Apple-Macs,
Apricots, Tangerines, Amstrads and IBMs were often incompatible, and could
not read or understand one another. Magnetic tapes and later floppy disks had
to be used to transfer or copy data or graphics from one computer or another.

The ‘modem’ (an abbreviation of ‘Modulation’ and ‘Demodulation’) revolutionized
the entire stand-alone approach. It is an electronic device, which changes
analogue to digital signals and vice versa. It brought together the media, the
computer and telecommunication technologies so that computers in different
parts of the world could start ‘talking’ to each other using the international
telephone networks and the supporting satellite and cable hardware. Electronic
mail (or e-mail) and the Internet with its world wide web were developed in quick
succession. Convergence of the various media, computer and
telecommunication technologies now became possible, reaching its acme in the
multi-media systems so common today for the transfer and exchange of
information, data, graphics and sound. One could now watch films and video on
the computer screen, or surf the internet on the television screen. One could
also use the computer for sending and receiving fax messages, electronic mail,
for surfing the internet, and even using the Net Phone for phoning and tele-and
1
Video conferences. Cable telephony Digitization was the key here, aided by
miniaturization, wireless telephony, digital compression, and comparatively low-
costs and user-friendliness.




Information Technology in India: A History


India did not lag behind in the introduction of the new technologies though the
progress was tardy, and largely restricted to the elites in urban areas, and to
teachers and researchers in national science and research institutes. The first
computers to be installed science and research institutes. The first computers to
be installed in India were imported in the 1960s and 70s. Most were second and
third generation IBM mainframes using transistors. The major importers were
government departments and large corporations. By 1978, India had 800
mainframes maintained by the public sector company, Computer Maintenance
Corporation (CMC), after the withdrawal of IBM. The decade also saw the
emergence of a few Indian producers: ECIL, ICIM, Bull-PSI, and others.
Developments in micro computing, the convergence of computer controls with
telecommunications, communication satellites, fiber optics and digital switches,
as well as liberalization in import policies, let to the rapid growth of the computer
industry in India. Though all the while it remained ‘an assembly-oriented
industry’. The mushrooming of computer training institutes and university degree
courses in computer science provided the much-needed personnel needed for
creating the software and maintaining the hardware in the growing industry.
1
New Computer Policy – 1984
The Rajiv Gandhi government initiated the ‘information revolution’, opening up
the Indian market to foreign investors; gradual privatization and deregulation of
first telecommunications and later other industries, reducing import and excise
duties on electronic goods, computer hardware and software, and providing
other incentives to the development of the information industries. The man Rajiv
Gandhi chose to lead the revolution in telecommunication was Sam Pitroda, a
non-resident Indian technocrat who had made good in the United States, and
who passionately believed that India could leapfrog into the age of information, if
only it embraced the new information technologies.

He was appointed Chairman of the Telecommunication Commission, and later
telecommunication adviser to the Prime Minister. He established the Centre for
the Development of Telematics (C-DOT) which would design and fabricate
digital automatic switching equipment for rural (RAX) and urban (MAX)
telephony. Pitroda lived up to his reputation of getting things done, but in the
process he trod on many bureaucrats’ toes. One section of the media wowed
him; the other lambasted him for the hype he created about the potential of tele-
communications for the nation’s development. Pitroda shared Rajiv Gandhi’s
vision of a modern India competing with advanced industrialized nations in the
new age of information, the post-industrial age. However, while urban India was
swamped by multinational brands of consumer goods, the latest hardware and
software, value-added services like cellular telephony, paging, and a plethora of
cable and satellite channels, the rural areas and the urban poor were untouched
by such happenings. Liberalization and re-structuring of the economy in the
early 1990s both under the Congress and the United Front regimes, so as to
promote foreign investment and private business, re-enforced this urban
approach. Leftist economists dubbed this approach an instance of ‘selling out to
the multinationals’.




                                 On Demand++
1
                 The Future of Indian Broadcasting
New technologies in broadcasting are revolutionizing the viewing experience.
Increasingly viewers are becoming empowered to define what entertainment
content is delivered to their TV screens at what time. Broadcasting schedules
are becoming meaningless by the day.

Personal Video Recorders (PVRs) are making their way into the Indian market.
Take Tata Sky’s recently launched Digital Video Recorder (DVR) service – Tata
Sky Plus. The DVR allows a viewer to watch one channel, while simultaneously
recording a program running on another channel. The DVR also has a host of
other features – like recording any program while you’re asleep or at work or
even recording the entire series of your favorite show.

So no more waiting up till 2 am to watch that movie you’ve been waiting to see.
No more having to miss your favorite show because you get late at work. And
best of all, no need to fight over the remote. The DVR even lets you pause, re-
wind, forward, and re-play live TV.

According to Mr. Vikram Kaushik, Managing Director and CEO of Tata Sky Ltd
“The introduction of PVR technology will revolutionize the TV viewing experience
in India. The PVR’s recording and playback features will allow our subscribers to
time-shift their TV viewing, and thanks to the pause and rewind features,
viewers can be sure that they won’t miss any of their favorite shows any more,
and that they can catch all the action in live TV broadcasts.” While the DVR
gives Direct-to-home (DTH) provider TATA Sky a momentary edge over the
competition, it isn’t long before they catch up with their own DVRs. In fact,
leading multi-system operator in the digital cable segment – Digital
Entertainment Network (DEN) Ltd. – planning to introduce a DVR service next
year. “On demand is the future,” said Mr. Anuj Gandhi, CEO, DEN.

A whole new level of interactivity is being introduced with digitization of TV
networks. While the TATA Sky Plus DVR makes its way into homes across the
nation, video-on-demand is a feature that is prevalent across all distribution
platforms i.e. DTH, digital cable and Internet Protocol Television (IPTV). Video-
on-demand lets viewers order particular movies available on their service
provider’s library. The movie can be downloaded for a small fee and then
viewed. Video-on-demand as a segment is expected to experience significant
1
growth in India within the next five years. On demand services providing access
to games and music are also proving to be a popular feature of distribution
platforms.

The concept of ‘Pay-per-view’ is popular in the West and has immense
potential in India. The country’s pay-per-view sector is expected to grow at an
annual rate of 16 percent to cash in US$ 11.3 billion worth of revenues by 2012.
Many TV service providers are focusing on their pay-per-view channels and the
bouquets of movies offered in order to attract customers.

With a burgeoning Indian film industry, producing 1000 movies a year, video-on-
demand and pay-per-view are turning out to be lucrative business opportunities
for distribution networks.




-----------------------------------------------------------
++
     This article has been picked up from convergenceplus.com website and
      written by Mr. Vipul Mehra on dated 28th December’ 2009 and the link is:
                   http://www.convergenceplus.com/features-5jan09.html
1




                                 Going Digital**

                 India’s Cable TV industry set for Digitization



With the revolutionary transformations taking place in the television content
distribution market, soon viewers all over India will be able to enjoy the benefits
of watching movies and TV shows, surfing the Internet and making telephone
calls without leaving the comfort of their sofas and television screens.

The Telecom Regulatory Authority of India (TRAI) recently issued a set of
recommendations to the Ministry of Information & Broadcasting mandating every
cable network operator to transmit digitized quality video to every home by 2012,
thus making possible the delivery of a host of services including Internet access
and telephony via Cable TV.

Transition Phase: Analog to Digital

Cable TV penetration by the end of 2007, had reached 78 million out of 130
million homes in India. The cable TV sector has experienced phenomenal
growth over the last few years and still has massive growth potential.

Currently, cable TV transmission in India is predominantly analog and is limited
to providing only TV channels. Analog doesn’t lend itself well to technological
upgradation either. With stiff competition from advanced distribution
technologies such as direct-to-home (DTH), headend-in-the-sky (HITS), and
Internet Protocol TV (IPTV) offering TV channels, broadband and telephone

Services, the local cable TV operator is going to find it difficult to sustain his
business with analog transmission.

The TRAI recommendations include a provision for existing registered cable
operators to digitize their transmission over the next five years, and over three
years for new entrants.

Digitized networks have the capacity to offer a two-way path allowing broadband
and thus, ‘triple-play’, which includes services such as cable telephony, video-
1
on-demand and Internet surfing facilities, thus allowing cable operators the
opportunity to compete with the likes of DTH and IPTV.



Major Trends: Competition and Consolidation

Huge investments in technology are required for upgrading to digital
transmission and last mile cable operators all over the country are being
increasingly compelled to tie up with triple play service providers or Multi-Service
Operators (MSOs) to enable digital two-way interactivity.

Five major MSOs have emerged in this segment acquiring a national presence
through mergers with and acquisitions of last-mile operators or by turning them
into franchisees. These are the Raheja group’s Hathway Cable & Datacom, the
Essel Group's Wire & Wireless India (WWIL), the Hinduja Group's IndusInd
Media, DEN Digital Entertainment Network (set up by GBN founder Sameer
Manchanda and Network18 chief Raghav Bahl) and Digicable Network India (set
up by Jagjit Singh Kohli). These five collectively access over 20 million homes
i.e. a quarter of the country’s cable TV subscribers.

Hathway has bought 51 per cent stakes in Bhaskar Multinet, the cable wing of
the Dainik Bhaskar Group, and Gujarat Telelinks, and acquired Marathwada
Cable Network in Aurangabad. Digicable has recently acquired a 51 per cent
stake in the Kolkata-based CableComm to expand in the eastern region of India.

WWIL, which already has a presence in 43 cities, is the only player in the market
currently to offer HITS (Headend-in-the-Sky) having acquired a license for it
years ago. HITS is a technology that enables delivery of multi-channel television
signals to cable operators who can downlink these from a HITS satellite and
push them to their subscribers via a set top box. This is a more cost-effective
method of achieving digitization since it doesn’t require too much investment
from the cable operator who merely has to equip homes with the set top box and
become a franchisee.

Competition in the cable TV segment is intensifying as the battle over acquiring
the last mile cable operators continues. New players like Asia Net and You
Telecom are also entering the fray. You Telecom is said to have committed Rs.
120 (US$ 24 million) crore towards its digital cable business expansion.
1
Rising Investment

The fragmented and unorganized cable TV sector has attracted little investment
in the past, even though it is a profitable sector generating annual revenues of
over Rs.10, 000 crore (US$ 2 billion). This is primarily due to massive under-
reporting of subscriber numbers having an adverse impact on the broadcasters
revenue. Consolidation in the industry is attracting the attention of private equity
players, as the scattered cable TV operators come together to form meaningful
corporate entities.

The cable TV sector will come under a proper licensing mechanism where city,
state or national licenses can be bought. The TRAI recommendations are a big
step forward in ensuring effective licensing compliance, digitization of networks
and attracting investment. Collectively, the industry is said to be investing close
to Rs 500 crore (US$ 103 million) on digitization.

The Way Forward

The cable sector is emerging as a very attractive space owing to the TRAI
recommendations and the clear edge of digital cable over its competition like
DTH and IPTV in offering a larger number of channels, greater reliability even in
adverse weather conditions and easier access to cheaper after-sales and
customer services.

According to reports of Informa Telecoms and Media Group and Media Partners
Asia (MPA), India will overtake Japan, Australia, Hong Kong and South Korea to
become the second largest digital cable TV home market in the Asia Pacific
region

However these growth plans largely depend on factors like having a more liberal
FDI policy for cable operators, a focused plan for digitization, greater clarity on
HITS guidelines and a licensing framework for last mile cable operators.



--------------------------------------------
** This article has been picked up from convergenceplus.com website by Mr. Bunny Sidhu
     on dated 28th December, 2009 and the link is:
     http://www.convergenceplus.com/features-5jan09.html
1


Future of Indian Television Broadcasting+*
It definitely appears bright; the potential is immense. The number of TV owning
homes has a long way to go; only 70 million TV households have been accounted
for so far; an equal number have to own TVs as yet. Ad spending on the medium is
a pittance compared to the amount spent in smaller TV markets globally. The
amount of TV being watched is also not enough; Indians have to watch almost
twice the amount of TV they are watching currently to match US viewing habits.

The major issue about Indian television: one does not know which it way it will go.
Will the net be the medium of delivery of television? Or will television be delivered
as it has been over the past few years via terrestrial, satellite or wireless
transmission to be watched on traditional television sets? Or will it be watched on
handheld devices? A lot of hype has been created around broadband Internet
delivery of television to Indian TV or computer homes. (Technology convergence is
taking place globally; the latest takeover of Time Warner by an Internet company
AOL is an indicator of that transition. AOL will in all likelihood exploit all the
properties that Time Warner has on the Net and other modes of broadband
delivery.)

The current cable TV infrastructure in India is far-too- rickety with MSOs having little
control over the state of the fibre as it gets into consumer homes. The coax fibre
has not been laid keeping in mind two way connectivity and it also is not consistent
all over the cable ops service area. For every cable TV home receiving a good
signal there are at least another twenty homes receiving a bad signal. There is no
addressability, no transparency of operations as cable ops are averse to paying
government levies, and no real communication between cable TV ops and
subscribers. But there is no doubt that the cable operators have done a good job by
building up a cable and satellite penetration of 25 million homes all over India. And
they have managed this in the past six to seven years as against the the telecom
business which has been around for close to a 100 years with less than 20 million
consumers. The telecom infrastructure also cannot support broadband delivery well
enough. Yes DSL and leased lines are an option but they are a rich man's choice.
1
Satellite delivery of broadband signals is one mode that can support broadband
Internet delivered television. Richard Li's Pacific Century Convergence Corp is
looking at it closely and the footprint of its service will cover India. Direct PC has a
similar mandate for the Indian market. Pricing, however, will be a major issue here
as set top boxes will have to be purchased by consumers which they may not be
open to doing if price is too high.

The penetration of computers is extremely low with about 3-4 million PCs being the
installed base in Indian homes though computer sales have been rising rapidly
thanks to lower prices. But it is unlikely to increase so fast so as to come even
anywhere close to the 70 million TV homes currently.

Indiantelevision.com believes that television will be delivered the same way as it
has been so far through traditional modes. It's likely that the television population
will cross 100 million homes in the next 10 years. The computer population will be
about 15-20 million in the next 10 years. However, some companies, television
channels and television producers will attempt video streaming or delivery of video
through other compression technologies on the Internet. But it will only be another
option for consumers who will log on to watch a shaky picture at least for the next
half decade. Cyber kiosks will have sprouted all over India in small towns and it's
possible that some consumers will log on to the Net to watch some shows when
they want as payment gateways will have been set up.

Most viewers will, however, be watching their TV mainly via cable, terrestrial and
direct to home television delivered via satellite. Cable TV infrastructure will have
improved. Addressability also will have made its mark and consumers will be
surfing their television sets for emails and for information. Free-to-air television will,
however, continue to rule the roost but tiring will have made its mark and people will
be buying their pay per view programmes and choosing the channels they want
watch unlike today when everything is thrown at them with a shovel.



-------------------------------------------------------
+
* Article has been exactly picked up from indiantelevision.com on 28th December’ 2009
  and the link is: http://www.indiantelevision.com/indianbrodcast/future/future.htm
1


         Internet telephony and related Issues****

The focus of the article is to examine the impact of the proposed Communications
Convergence Bill on e-commerce. The ambit of the paper is restricted to internet
telephony as the novel and cheap method of communication and of conducting
business over the net. Internet telephony is of particular interest to organizations
engaged in business process outsourcing as it significantly cuts the costs of
communication. In the course of this paper the author would also analyse the
guidelines and license issued by the DoT for providing Internet telephony services
and discusses some of the emerging legal issues that are spawned by this
liberalization.



INTRODUCTION

After several months of debate, on April 1, 2002, the Government of India finally
permitted Internet Service Providers (ISPs) to offer Internet telephony services.
Earlier, the legal and regulatory framework in India did not permit ISPs to offer
Internet telephony. Under terms of the ISP licence, telephony on the Internet was
banned and if any ISP offered these services, the ISP licence could have been
terminated. After the opening up of this sector, the Department of
Telecommunications (DoT) has granted approvals and licences to several
telecommunication companies to commence these services. Though the quality of
Internet telephony services may not be as high as the normal international long
distance services, their low cost will definitely attract more consumers. Further, with
the rapid advancement in technology, it is only a matter of time that the gap
between the two forms of voice communication is bridged.



-------------------------------------------------------------------

**** This article, case and communication convergence bills has been taken from the
      website-http://www.legalservicesindia.com, written by Mr. Dhruv Madan and link is:
      http://www.legalservicesindia.com/articles/teleph.htm
1


WHAT IS INTERNET TELEPHONY?

INTERNET TELEPHONY: THE CONCEPT

(a) Meaning

Internet Telephony is a form of Internet Protocol (IP) Telephony. IP Telephony is
used as a generic term for the many different ways of transmitting voice, fax and
related services over packet-switched IP-based networks. The basic steps involved
in originating an Internet telephone call are conversion of the analog voice signal to
digital format (binary data) and compression/translation of the data into IP packets
for transmission over the Internet; the process is reversed at the receiving end. This
process is called modulation-demodulation, giving the term modem. The
communication usually takes place real time. Thus, the main difference between
Internet Telephony and normal telephony is that whereas in normal telephony,
circuit switching technology is used, Internet Telephony is based on packet
switching technology.

(b) Difference between Internet Telephony and Voice-Over-IP:

IP Telephony can be subdivided into two major groups: Internet Telephony and
Voice-over-IP (VoIP), the difference being the type of the underlying IP network i.e.
the medium of transmission. Internet telephony primarily involves the usage of the
Internet rather than the Public Switched Telephone Network (PSTN) to transmit
'real-time' audio from one personal computer (PC) to another (or in some instances
to another telephone itself). However, in the case of VoIP, it is generally an IP
technology suite (i. e. a private network) that is used rather than the public Internet.

Another important distinction between Internet Telephony and VoIP is the quality of
the transmission. Since VoIP is usually a closed / private network, the technical
hurdles are less daunting, which results in greater reliability in the transmission of
voice packets than in Internet Telephony where the voice packets are transmitted
on the Internet. Therefore, the chances of having a live or real-time conversation
are better in VoIP than in Internet Telephony.

(c) Methods of Internet Telephony

Following are the popular methods of Internet Telephony as recognized by the
International Telecommunications Union (ITU)



(i) PC to PC
1
Under this method, calls are transferred from one PC to another PC. No gateway
with a PSTN is required, because calls are not switched by a PSTN. Rather, the
principal medium of transmission is always the Internet.

(ii) PC to Phone / Fax

Under the PC to Phone / Fax method, the conversion of speech into packets takes
place on the originating users PC. The process is reversed at an Internet
Telephone Service Providers (ITSP) gateway server, which then dials the called
party’s telephone number and, when a connection is made, starts sending the
callers speech and transmitting the called party’s speech in the other direction. The
PC to Phone / Fax category includes PC to Phone Voice and PC to Call Centre
services.

(iii) Phone to Phone

Phone to Phone method of Internet Telephony is closely associated with the
traditional telephone experience. ITSPs are required to install their own gateways
and enter into termination agreements all over the world, both with independent
ISPs as well as established PTOs. In Phone to Phone Internet Telephony, the
customer, using an ordinary telephone, dials an access code and then the
telephone number; the access code then routes the call to a special computer
gateway (the IP network). Local computer gateways for companies offering this
type of service must be optimally placed in strategic geographic areas. For
instance, if a customer using phone-to-phone Internet Telephony plans to call
London (England) from Mumbai (India), then local gateways must be located in
both London and Mumbai. The gateways convert audio into data for transmission
across the IP network and then convert incoming data back into analog signals.

3. LICENCING INTERNET TELEPHONY SERVICES IN INDIA

Pursuant to the New Telecom Policy, 1999, the DoT has announced guidelines
permitting ISPs to process and carry voice signals (Guidelines). ISPs can only offer
these services within the service areas for which they have a licence. Pursuant to
the Guidelines, the DoT has revised the License Agreement for ISPs to include the
provision of Internet telephony services (Revised License). The Revised License
has been issued under the authority granted to the DoT under the Indian Telegraph
Act, 1855, the Indian Wireless Telegraphy Act, 1933 and the TRAI Act, 1997.
1
All ISPs desirous of providing Internet telephony services also have to make an
application to the DoT for signing an Amendment to their existing ISP license. The
old ISP license agreement, which banned Internet telephony services read as
follows:

1.12.3 Telephony on the Internet: Telephony on the Internet is not permitted. The
license will be liable for termination for any violation of this clause of the License
Agreement. The licensee shall also take measures on his own and as and when
directed by the Government at his own cost to bar carriage of Telephone traffic over
Internet.

However, the Revised License does not contain the above clause, and allows ISPs
to provide Internet access / content services including, Internet telephony services.

(a) Provision of Internet Telephony Services

As per the Revised License, Internet Telephony is an application service, which
customers of ISPs can avail of from their PCs or other IP based Customer
Premises Equipment (CPE).The Revised License restricts the manner in which
ISPs can provide Internet Telephony services to only three types:

(i) From a PC in India to a PC inside and outside India

(ii) From a PC in India to a telephone outside India

(iii) From an IP-based H.323/SIP Terminal in India to similar terminals in India and
abroad provided they employ the IP addressing scheme of the Internet Assigned
Numbers Authority ISPs are not allowed to provide any Internet telephony services
which fall outside the purview of the above three modes.

It can be seen that the scope of Internet telephony in the second mode to only
telephones outside India. So if an Internet telephony service provider allows a PC
user in India to call a telephone in India, the same would violate the Revised
Licence and the ISP could be penalized for the same. It seems that the DoT has
stipulated this condition so that national long distance operators do not lose out on
their customer and revenue bases.

(b) Services that fall outside the purview of Internet Telephony

The Revised License also states that ISPs are prohibited from offering the following
types of services as they fall outside the purview of Internet telephony:

(i) Voice communication from anywhere to anywhere by means of dialing a
telephone number (PSTN/ISDN/PLMN) as defined in National Numbering Plan;
1
(ii) Originating the voice communication service from a telephone in India;

(iii) Terminating the voice communication to telephone within India;

(iv) Establishing connection to any public switched network in India;

(v) Dial up lines with outward dialing facility from nodes; and

(vi) Interconnectivity between ISPs who are permitted to offer Internet telephony
services and the ISPs who are not permitted to offer Internet telephony services.

(c) Quality of Service (QOS) Terms

The DoT has not provided any parameters for the QOS14 for Internet telephony in
the Revised License. The Guidelines and Revised License state that the Telecom
Regulatory Authority of India (TRAI) shall prescribe the QOS from time to time.

The role of the TRAI is to create an environment conducive to the growth of telecom
sector, and safeguard a customer's interest and ensure that he gets the QoS that
he has contracted for. As regards QOS, the TRAI has the substantive role in laying
down standards, assessment of QOS, and action for improvements. It has,
therefore, the following main functions to perform in this regard:

(i) Setting Quality of Service Standards

(ii) Monitoring

(iii) Enforcement

As of now, the TRAI has not framed any QOS for Internet telephony. Once the
TRAI imposes certain basic QOS parameters, ISPs will be obligated to meet the
minimum QOS criteria while providing Internet telephony services to their
customers.

In order that the customers can effectively utilize Internet telephony services, the
TRAI should formulate the QOS terms as soon as possible.




(d) Tariff / Fees
1
The Guidelines state that the TRAI has not levied any tariffs on ISPs for the Internet
telephony services that will be provided over the public Internet. However, there is a
saving provision that states that the TRAI may levy a tariff at any time and it shall
be binding on the ISP to pay such tariff. This provision has also been incorporated
in the Revised Licence. Moreover, the ISPs do not have to pay any license fee and
USO levies for Internet telephony services. Nevertheless, the DoT reserves the
right to impose a license fee on the ISP at any time during the license period.

Hitherto also, ISPs do not have to pay any license fee for providing Internet
services. The DoT has continued to impose this license fee-free regime for ISPs in
order to promote the proliferation of Internet usage and now, Internet telephony
services. However, since Internet telephony services are in direct competition with
basic telephony services, in the event there is unfair competition, the DoT could
impose a license fee to create a level-playing field.

(e) Security Monitoring

As per the Guidelines and Revised License, ISPs who provide Internet telephony
services through their own Internet gateways would have to provide suitable
monitoring facilities for the security agencies at their own cost. The ISPs also have
to provide periodic reports to the DoT regarding the flow of Internet telephony traffic
through its network.

(f) Inter-Connection

The Revised Licence permits only ISPs who have obtained the requisite license to
offer Internet telephony services. It prohibits any interconnection between an ISP
that is allowed to offer Internet telephony and an ISP that is not allowed to offer
Internet telephony.

4. EMERGING LEGAL ISSUES

(a) Ambiguity in Definition

While the Guidelines and Revised Licence discuss what services would amount to
Internet Telephony for the Indian context, they have failed to define the term
Internet telephony per se. The meaning given to the Internet telephony is a
restrictive in nature, as it states what services would fall within and outside the
purview of Internet telephony for the Indian ISPs. In fact, many of the services,
which are prohibited under the revised license, amount to Internet telephony in the
international context. For example, originating or terminating a voice communication



 service from / to a telephone in India would amount to Internet telephony in the
international context, if the public Internet is used as the medium of communication.
1
The Guidelines and License do not lay down any clear parameters that need to be
satisfied by any telecommunication service to be classified as Internet telephony.
While this problem exists world over, and even at the ITU level, this ambiguity could
lead to problems in the future when new forms of technology and modes of
communication emerge.

At the earliest, as TRAI has suggested, there is a need to distinguish between
Internet Telephony and VOIP. The Governments of different countries need to
come together and resolve this issue at the earliest.

(b) Meaning of PC and Telephone

The Revised License states that PC to PC Internet telephony is permitted in India.
However, the Revised License does not clearly define a PC. Under the Information
Technology Act, 2000 (ITA), a computer is defined as follows:

Computer means any electronic magnetic, optical or other high-speed data
processing device or system which performs logical, arithmetic or memory functions
by manipulations of electronic, magnetic or optical impulses, and includes all input,
output, processing, storage, computer software, or communication facilities which
are connected or related to the computer in a computer system or computer
network. Thus, the definition of a computer is extremely wide and is not merely
restricted to a normal computer, which is used at home or in offices.

Moreover, while the Revised License states that the telephone call cannot be
originated from or terminated on a telephone in India, it does not define the word
telephone. Even the telecommunications laws in India have no clear definition of
the term telephone. With the emergence of new technologies and products, the
meaning of PC and telephone could be extended to also include personal digital
assistants (PDA) (eg. palm pilots) and even mobile phones with computing power
(like the Nokia 9110). Moreover, there is also a convergence between PDAs and
telephones (like the TREO). If a call is made from such devices, it is uncertain
whether the same would be legally permissible.

Another emerging legal issue is concerning IP phones. There exists some
ambiguity as to whether IP phones can be freely used to provide Internet telephony
services. While it is technically possible to originate calls from IP-based networks, it
is uncommon to terminate calls from other networks onto an IP-based network
(except in the case of IP PABX system). Since a call from to a number on the
national numbering plan is prohibited, a call from an E.164 universal numbering



 plan may also not be allowed. However, the International Telecommunications
Union is studying an option of assigning an E.164 numbering resource to an IP
1
phone using the ENUM protocol. The ENUM protocol converts the E.164 number to
an IP address, and a telephone user can call an IP phone by dialing the E.164
number. The perturbing question is whether this would be allowed under Indian
laws as they stand right now.

Therefore, it would be necessary to determine and clarify the legitimacy of the type
of instruments and the system being used while making an Internet telephone call
in order to stay out of any legal problems.

(c) Quality of Services

One of the major difficulties in Internet telephony is in achieving a similar standard
of QOS for Internet telephony services as for normal telephony services. The
difficulty could arise due nature of the IP network. The IP network uses packet
mode of data transmission that can degrade the quality of the voice communication
as the packets could get lost in transmission on the public Internet, there could be a
delay in transmission, there could be a variation in the packet arrival or there could
be an echo effect due to the delay between the transmission of a signal and its
receipt.

Therefore, while determining what amounts to real time in the context of Internet
telephony, it is necessary that the TRAI keeps in mind the recommendations of the
ITU on Real Time. The ITU in its recommendation no. G.114 (2.96 revision)
recommended certain limits for one-way transmission time for conditions with echo
adequately controlled. According to Recommendation G.131 (Stability and Echo): 0
to 150 ms: Acceptable for most user applications .150 to 400 ms: Acceptable
provided that Administrations are aware of the transmission time impact on the
transmission quality of user applications above 400 ms: Unacceptable for general
network planning purposes; however, it is recognized that in some exceptional
cases this limit will be exceeded.

Another practical difficulty that ISPs are facing is the lack of adequate co-operation
from basic telephone operators. Unless the basic operators give better QOS in their
agreements with ISPs, ISPs will not be able to provide better QOS to their
subscribers. While last year, the TRAI released its recommendations for QOS for
ISPs offering Internet Services, ISPs are unable to meet these QOS terms because
of the lack of co-operation from basic operators. Therefore, the TRAI must keep in
mind the existing competition and economic scenario while framing QOS for
Internet telephony services.




(d) Liability of the ISP
1
The ITA contains provisions dealing with the liability of Network Service Providers
(NSPs). A NSP has been defined under the Act to mean "an intermediary". An
"intermediary", with respect to any particular electronic message, means any
person who on behalf of another person, receives stores or transmits that message
or provides any service with respect to that message. Thus an ISP would be an
NSP as it receives stores or transmits electronic messages over the Internet on
behalf of its subscribers. The ITA stipulates that every NSP is given general
immunity as regards any offence under or contravention of the Act or the provisions
made there under, if such NSP proves that

(i) such offence or contravention was committed without its knowledge or

(ii) that it had exercised all due diligence to prevent the commission of such offence
or contravention. Under the ITA, publication or transmission or causing publication
of any obscene information is an offence.

Therefore, if while using Internet telephony services, if the subscribers transmit any
obscene information, the ISP could be held liable for such transmission. However, if
the ISP can prove that it was not aware of such contravention or if it had taken
reasonable steps to prevent such contravention, it may be immune from any
penalty or liability. Therefore, ISPs must be careful to include appropriate terms in
their subscriber agreements to preclude such liability.

(e) Validity of Messenger Services

Off late, there has been some debate regarding voice chat facility which instant
messenger services have been offering. There are various issues that arise in this
context which need to be addressed in order to determine whether such a voice
chat facility is legal.

The first issue that arises is whether such services amount to Internet telephony.
Under normal circumstances, they would amount to Internet telephony as the
instant messengers use the public Internet as a means of transmitting voice
between two or more users.

The second and more important issue is whether these messenger services are
permitted to offer these services in India. As discussed above, in order to offer
Internet telephony services, the service provider requires a license. Currently only
ISPs and basic service operators (i.e.BSOs, NLDOs and ILDOs) are allowed to
provide such services as per the provisions of their license. Moreover, no
interconnection is allowed between an ISP who has the Internet telephony license
and an ISP that does not. Therefore, in order to offer the voice chat facility using the
public Internet, the messenger would have to obtain an ISP license. Otherwise, the
messenger may have to enter into an appropriate arrangement with the ISP
wherein the voice chat facility is offered to the messenger users. However, the
1
validity of such an arrangement is also unclear under the law (especially as ISPs
are not allowed to assign or sublicense their services). The issue is further
complicated if the ISP with whom the messenger has an arrangement does not
possess the Revised ISP license. It is essential that ISPs and the messenger
services settle this problem at the earliest.

(f) Blocking of Internet Telephony Websites

The ISP licence does not require that an ISP must provide Internet telephony
services only to its Internet subscribers, nor does it mandate that Internet telephony
and Internet services have to be provided together. However, news reports indicate
that after April 1, 2002, some ISPs have started blocking access to websites of
other rival ITSPs (including foreign ITSPs). If so, do they have the authority to block
the sites? Further, many ITSPs have tied up with international ITSPs to leverage
their customer base. The viability of this option remains to be seen, as foreign
ITSPs can set up 100% subsidiaries in India without the help of Indian ISPs. In fact,
it may be economically advantageous for them to do so as they would already have
their servers and networks established in foreign countries.




   COMMUNICATIONS CONVERGENCE BILL, 2001
1
The Communications Convergence Bill, 2001 (Convergence Bill) aims at promoting,
facilitating and developing the carriage and content of communications including
broadcasting, telecommunication and multimedia in an orderly manner. It
recognizes the coming together of voice, video and data, aims to set up a single
super-regulator for the telecom, Internet and broadcasting sectors, to be called the
Communications Commission of India (CCI). The Convergence Bill will replace the
Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, the
Telegraph Wires (Unlawful Possession) Act, 1950, the Cable Television Networks
(Regulation) Act, 1995 and the TRAI Act, 1997.

In the present scenario different services like basic telecom, cellular, Internet and
satellite television have different licenses and are regulated by different agencies.
The present situation does not allow bundling of services, like your cable operator
cannot offer you telecommunication services; your ISP cannot carry voice etc. The
licensing regime that exists as of today service operator has to apply for licenses
separately and are permitted based on the regulations governing service. This
would change with the adoption of the Communication Convergence Bill,
2000.Recommendations of the Bill: The Convergence Bill proposes to have a single
authority Communications Commission of India responsible for issuance of licenses



and regulating the communications sector including the infrastructure and the
content delivered through the infrastructure. The bill also proposes setting up
Communications Appellate Tribunal. Any person aggrieved by any decision or order
or penalty of the commission could appeal to the tribunal for speedy decision on the
appeal. The commission and the appellate tribunal have been given power
equivalent of a civil court. Responsibilities of the Commission. The commission
would be responsible for providing licenses under four categories namely:

1. Network Infrastructure facilities (Infrastructure Service Provider)

2. Network Services (Network Service Providers)

3. Application Services (Application Service Providers)

4. Content application services (Content ASP)

The classification is technology neutral and service sector neutral. The
segmentation of the market into the four different segments would be based on the
services provided. Each layer is dependent on one or more of the earlier layers for
the provision of services. The Act, it is hoped, shall usher in the era of convergent
handling of communication medium in place, i.e. the Communication Commission
of India shall be responsible of handling basic telephony, cellular service, cable,
satellite channel and Internet service operators. The bill shall segment the market
1
on the basis of the layers as illustrated above. This would enable operators to
obtain licenses for the specific layer rather than for the service. For e.g. an operator
could take license for offering only infrastructure facility with the services being
offered by some other operator. Hughes Tele.com, the private basic service
operator for Maharashtra would be able to offer services like telephony, Internet (it
offers these even today), interactive content or any other service over the cable
coming into your home.

The Convergent View "Convergence" refers to the fact that different kinds of
communication services, whether in the form of voice, text or video, can be
provided using the same basic infrastructural facility, and similarly, different kinds of
infrastructural facilities can be utilized to provide the same service. For instance,
share prices can be accessed via the Internet on a PC or through the wireless
medium on a mobile phone. Perhaps the most significant aspect of the Bill lies in
the name itself. It recognizes the "blurring of borders between telecommunications,
computing and media”. Further, it also acknowledges that "The continuous
development of new technologies results in an inability to predict the future
evolution of convergence viz. the development of new services like web-casting,
Internet Telephony etc. resulting in the need for regulations which does (sic) not



aim to predict the future, but aspires to be flexible enough to accommodate and
propagate any permutation and combination of technologies and services." The Bill,
smartly enough, has steered clear of burdening itself with technological details.

The three key aspects in any communication are: The infrastructure facilities used,
such as earth stations, satellites, cables, etc. The kind of service provided such as
telephony, broadcast of cricket matches, etc. The technology used to provide the
service The Convergence Bill does not concern itself with the third aspect above. It
only seeks to regulate the communication sector based on the nature of
infrastructural facility and the nature of service provided. The basic objective
Irrespective of the infrastructure or technology used, long distance communication
is based on electromagnetic waves, of varying frequency.

In order to ensure hassle-free communication, a proper allocation of frequency
bands to various service providers is crucial. For this purpose, the Bill proposes the
setting up of a Spectrum Management Committee, which will earmark distinct
frequency bands for use in strategic and commercial purposes.

The Bill also envisages the setting up of the Communications Commission of India,
which will be the regulatory agency on the communications sector. The
Commission will be responsible for assigning the various frequencies (earmarked
by the Spectrum Management Committee for commercial purposes) among the
1
various users, and giving out licenses to service providers. The objectives of the
Commission, as listed in the draft Bill, are as follows: "The Communications
Commission of India, while exercising its functions shall be guided by the following
principles:

(i) that the communication sector is developed in a competitive environment and
that market dominance in a converged environment is suitably regulated;

(ii) that communication services are made available at affordable cost to all
uncovered areas including the rural, remote, hilly and tribal areas;

(iii) that there is increasing access to information for greater empowerment of
citizens and towards economic development;

(iv) that quality, plurality, diversity and choice of services are promoted;

(v) that a modern and effective communication infrastructure is established taking
into account the convergence of information technology, media, telecom and
consumer electronics;

(vi) that defence and security interests of the country are fully protected;



(vii) that introduction of new technologies, investment in services and infrastructure,
and maximization of communications facilities and services (including telephone
density) are encouraged;

(viii) that equitable, non-discriminatory interconnection across various networks are
promoted;

(ix) that licensing criteria are transparent and made known to the public;

(x) that an open licensing policy allowing any number of new entrants (except in
specific cases constrained by limited resources such as the spectrum) is promoted;
and

(xi) that the principle of a level playing field for all operators serving consumer
interest, including existing operators on the date of commencement of the Act, is
promoted."

Effects

With the bill adopted, service operators would be able to offer multiple services over
the same network. This shall reduce the cost and other overheads for the operator.
The bill defines the physical network, network services and the content delivered
over them independently thus enabling the use of the same network to carry
1
multitude of services. This shall help solve the anomaly of having a separate
license and network for say offering Internet, telephony and cable services. The bill
shall increase the value of companies in the communications business specially the
businesses owning the last mile access like MTNL, Hughes Tele.com, and BSNL
etc. The cable operator in your colony would have the best of the world with his
network. He could now also start bundling telephone services, Internet and other
value added services than just the plain old un-interactive cable television.
Licensing Regime under the Bill. The Convergence Bill also provides for a new
licensing regime, with a limited number of five licenses, which include network
infrastructure facilities, networking services, network application services, content
application services and value-added network application services. While granting
licences, the CCI may grant them either singly or jointly, depending upon the nature
of services to be offered. Therefore, while providing Internet telephony services, the
service provider would have to obtain the network application services licence and
probably the value-added network application services licence under the
Convergence Bill.



CLASSIFICATION OF INTERNET TELEPHONY UNDER THE WTO:

The General Agreement of Trade in Services (GATS) under the World Trade
Organization (WTO) envisages the progressive liberalization of trade in
telecommunications services. Though, India has made no specific commitments for
Internet telephony, it has made certain commitments for other telecommunication
services. Going forward, it would be important for the Indian Government to
understand how Internet telephony services could be classified under the GATS
framework while making any commitments.

Under GATS, telephony falls within the purview of telecommunications services as
per the Central Product Classification System (CPC) . Telecommunications
services are further classified as basic telecommunications and value-added
telecommunications. It would be useful to see what commitments India has made in
this sector and analyse how Internet telephony can be classified for the purposes of
GATS.

(a) Basic Telecommunications Services Vis--vis Internet Telephony Basic
telecommunications services are further classified as:

(i) Voice telephone;

(ii) Packet- switched data transmission;

(iii) Circuit- switched data transmission;
1
(iv) Telex;

(v) Telegraph;

(vi) Facsimile;

(vii) Private leased circuit;

(viii) Other - including mobile communications, and various others, (e.g. satellite
services, paging, trunked radio) depending upon the country. For the purpose of
Internet telephony services, voice telephone, packet-switched data transmission
and other services would be relevant. Of these three, India has made commitments
with respect to voice telephone and other services.



(i) Voice Telephone

Voice Telephony Services have not been defined or explained under the GATS.

View of the European Union:

It would be helpful to look at the definition of voice telephony according to Article 1
of the Directive of European Union, which defines Voice Telephony as the
commercial provision for the public of the direct transport and switching of speech
in real time between Public Switched Network termination points, enabling any user
to communicate with another termination point. Further as per the said Directive,
Internet telephony is defined as Voice Telephony if it meets the following criteria:

the communications are subject of a commercial offer; the service is provided for
the public; the service is provided to and from public switched network termination
points on fixed telephony network; and, it involves direct transport of speech in real-
time.

As per this definition, it can be understood that the first two forms of Internet
Telephony (i.e. PC to PC and PC to Phone) would not be characterized as Voice
Telephony under this Directive, simply because the service would not be provided
solely "to and from PSTN points".

View of the United States: However, the US meaning of voice telephony is broader.
As per Federal Communications Commission (FCC) of USA, IP telephony services
enable real-time voice transmission using Internet Protocols.

Voice Telephony as Public Telephone Services: Under the CPC, voice telephony
services are classified as Public Telephone Services. Public Telephone Services
are further classified as Public local telephone services Public long distance
telephone services.
1


Mobile Telephone Services

With respect to voice telephone service, Indian commitments are limited to
local/long distance, for public use over a public telecommunication transport
network and wire based (i.e. for fixed network of subscribers) services. The Internet
is a public network of computers and can be used for transport of
telecommunications, such as voice and data. Thus, it could be interpreted as a
public telecommunication transport network in case of Internet telephony.

As mentioned earlier, the main difference between Internet telephony and normal
telephony is that whereas in normal telephony, circuit switching is used, Internet
Telephony is based on packet switching technology. In packet switching, electronic
transmissions are chopped into packets of varying numbers of bytes. Each packet
is given a header or address label, and sent from one network node towards
another. The packets are (theoretically) bounced along from one router to another,
armed at each hop with only enough information to get them safely to another
router, where the process is repeated. By contrast, on circuit-switched networks
operating under a protocol such as Signalling System 7 (SS7) a call is routed
through a hierarchy of local, inter-urban and international switches to establish a
circuit between caller and called party.

Though Internet Telephony could amount to voice telephony, it is suggested that it
should fall under a separate new category as it involves a different form of
technology from traditional voice telephone services. This proposition can be
supported by the fact that a separate classification was resorted to with respect to
mobile telephone services based upon the technological difference between mobile
telephony and normal telephony.

Further, India has not made any specific commitments under voice telephone for
Mode 1(cross-border supply) and Mode 2 (consumption abroad) of supply under
the GATS. Therefore, even if Internet telephony is treated as voice telephony, by
opening up Internet telephony, India is already a step ahead since it has not made
any specific commitments in this respect.

(ii) Other Services

This is a broad group that includes various services such as mobile
communications, satellite services and radio paging services. As discussed above,
due to the technological differences, India could argue that Internet Telephony
should fall under this category. As of now, India has only committed that Foreign
Service providers can set up operations to provide these services provided they
obtain the licence from the DoT. However, there are no commitments with respect
to these services under Mode 1 and 2.
1
Value-added Telecommunications Services

Value-added Telecommunications Services are classified as:

(i) Electronic-mail,

(ii) Voice mail,

iii) On- line information and data base retrieval,

(iv) Electronic data interchange,

(v) Enhanced/ value- added facsimile services, including store and forward, store
and retrieve,

(vi) Code and protocol conversion,

(vii) On- line information and/ or data processing (inc. transaction processing).India
has made some commitments with respect to services (i), (ii), (iii) and (v).

As per the CPC, these services have been qualified as Data and message
transmission services. Data and Message Transmission Services are further sub-
divided into:

(i) Data Network Services (75231): Network services necessary to transmit data
between equipment using the same or different protocols. This service can be
provided via a public or dedicated data network (i.e. via a network dedicated to the
customer's use);

(ii) Electronic Message and Information Services (75232): Network and related
services (hardware and software) necessary to send and receive electronic
messages (telegraph and telex/TWX services) and/or to access and manipulate
information in databases (so-called value-added network services).

However, Internet telephony may not fall under these categories, as it is not a
network service. Further, India has no commitments with respect to Electronic data
interchange, Code and protocol conversion and On- line information and/ or data
processing (inc. transaction processing). From the above analysis, it can be
concluded that Internet Telephony services could fall within the meaning of Voice
Telephony services. However, due to the technological difference between Internet
telephony and traditional voice telephony, it would be suitable to formulate a
separate category for classification of Internet telephony. Depending upon the
reciprocal commitments India receives from other countries, it could use these as a
negotiating tool at the WTO.
1




                 CONCLUSION
With increased competition in the telecommunications sector, relatively high tariffs
and low tele-density, India is an attractive market for Internet telephony and VoIP.
In fact, experts have indicated that India will be the fourth largest market for Internet
telephony in the Asia Pacific region, after China, Japan and South Korea. After the
opening up of this sector, several foreign companies have also joined the race to
offer Internet telephony services in India. For example, US-based Net2Phone and
1
India based CalTiger have joined hands to deliver VoIP services to the United
States at as low as Rs 3 per minute. Further,

World Phone Internet Services Pvt. Limited, a joint venture between US-based WPI
group and Delhi-based IT-enabled service company Speed India.com Holdings has
already ventured into Internet telephony in the country. Several market players
have also begun plans to commence and offer video-conferencing facilities.

While the growth of Internet telephony will certainly increase the competition with
basic service operators, on the whole the consumer will stand to gain. However,
regulations that artificially restrict the usage and growth of Internet telephony will
only make the viability of this service more complex and ambiguous. The DoT
needs to try to resolve all forms of ambiguity in the licence terms to avoid future
misunderstandings. At the same time, service providers must ensure that their
Internet telephony services fall within the parameters of the existing regulatory
framework. This will assist in minimizing legal liability.




              Bibliography
   1. www.indiantelevision.com
1
2. www.Exchange4media.com

3. www.mib.nic.in

4. www.trai.gov.in

5. www.etnow.com

6. www.economictimes.indiatimes.com

7. Mass Communication in India by Dr. Keval J. Kumar

8. India on Television by Nalin Mehta

9. ‘Impact’ Magazine

10. ‘Business Standard’ Daily Newspaper

11. ‘Public Relations Voice’ Magazine.

12. ‘The Indian Express’ Daily Newspaper.

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Convergence

  • 1. 1 A Dissertation on “Convergence of Internet and Television – A Legal Perspective” By Shashikant Bhagat Nalsar Pro ID No. MLH39_09 A Project Paper Submitted in Partial fulfillment of P.G. Diploma in Media Laws for Module – III (Convergence & New Media) January 2010 Nalsar University of Law (Nalsar Pro), Hyderabad
  • 2. 1 Table of Contents Sr. Heading Page No. No. 01. Introduction: 4-6 Telecommunication and ‘New’ IT 02 IT in India: A History 6-7 03. New Computer Policy-1984 8-9 04. On Demand: The Future of Indian Broadcasting 10-12 05. Future of Indian Television Broadcasting 13-14 06. Internet Telephony and Related Issues 15-24 07. Communication Convergence Bill’ 2001 25-32 08. Conclusions 33-33 09. Bibliography 34-34
  • 4. 1 From Stand-Alone Technologies to ‘Convergence’ The concluding decades of the 20th century witnessed revolutionary developments in the mass media, telecommunications and information technologies. The old mass media technologies were stand – alone isolated technologies: radio, television, cinema, the press and book publishing were looked upon and used as distinct and discrete technologies. Telecommunications (primarily the telegraph and the telephone) developed on their own, and were never considered as ‘mass media’. A computer was just a computer, a telephone was just a telephone and a television set just a box in the corner for watching broadcast programmes. This separate and stand – alone identity was reinforced in government administration, where the ‘mass media’. Telecommunications and computer technologies were under three different ministries: Information and Broadcasting, Department of Telecommunications (DoT), and the department of Electronics. This was further reinforced in the Indian university system where departments of communication and journalism remained isolated from developments in telecommunications and computer science, which of course had their own separate departments. Besides, ownership of such technologies too was generally restricted to one or two of the media. In Europe and the developing countries, radio and television were government –owned and government-run, though the press and book publishing remained the responsibility of the private sector. Film-making was in both the public and private sector: the feature film industry was in private hands, while newsreels, documentaries, short films and animation films were the responsibility of the public sector. Few attempts were made to combine the different print and electronic media; cinema films were shown on the small screen with the help of a ‘telecine chain’ (an electronic device which can transfer film material to standard TV format), but one could not read the newspapers on television, or listen to the radio on television. The ‘two-in-one’ combined the radio and the audio-recording and playback technologies. The video-recorder was an add-on to television and to beginning of the asynchronous element in the new media. No longer were
  • 5. 1 listeners and viewers tied down to the exposure of radio and TV programmes at the same time as others; this greater control of the electronic media was gradually leading to the ‘de-massification’ of the media. The audio and cassette recorders, the walkman, and later the personal computer were further examples of greater audience control over content, as well as over the time and place of media exposure. The earlier concept of a ‘mass audience’ was giving way to a newer concept which took into account factors like flexibility and asynchornicity. Further, in telecommunications, the telephone and the telegraph remained isolated from the mass media, except as ‘carriers’ of information. Audio and cassette recording and playback technologies extended radio and television, giving them the facility of ‘delayed’ or flexibility exposure. Simultaneity of listening and viewing gave way to media access at one’s convenience. Communication satellites, cable, optical fiber, wireless technologies and computers changed the very nature of mass media and telecommunications. When the computer appeared on the scene in the 1970s and 1980s, it was a stand – alone desktop technology; interactive, but discrete. Computers could not ‘talk’ to each other; compatibility was a critical stumbling block. Apple-Macs, Apricots, Tangerines, Amstrads and IBMs were often incompatible, and could not read or understand one another. Magnetic tapes and later floppy disks had to be used to transfer or copy data or graphics from one computer or another. The ‘modem’ (an abbreviation of ‘Modulation’ and ‘Demodulation’) revolutionized the entire stand-alone approach. It is an electronic device, which changes analogue to digital signals and vice versa. It brought together the media, the computer and telecommunication technologies so that computers in different parts of the world could start ‘talking’ to each other using the international telephone networks and the supporting satellite and cable hardware. Electronic mail (or e-mail) and the Internet with its world wide web were developed in quick succession. Convergence of the various media, computer and telecommunication technologies now became possible, reaching its acme in the multi-media systems so common today for the transfer and exchange of information, data, graphics and sound. One could now watch films and video on the computer screen, or surf the internet on the television screen. One could also use the computer for sending and receiving fax messages, electronic mail, for surfing the internet, and even using the Net Phone for phoning and tele-and
  • 6. 1 Video conferences. Cable telephony Digitization was the key here, aided by miniaturization, wireless telephony, digital compression, and comparatively low- costs and user-friendliness. Information Technology in India: A History India did not lag behind in the introduction of the new technologies though the progress was tardy, and largely restricted to the elites in urban areas, and to teachers and researchers in national science and research institutes. The first computers to be installed science and research institutes. The first computers to be installed in India were imported in the 1960s and 70s. Most were second and third generation IBM mainframes using transistors. The major importers were government departments and large corporations. By 1978, India had 800 mainframes maintained by the public sector company, Computer Maintenance Corporation (CMC), after the withdrawal of IBM. The decade also saw the emergence of a few Indian producers: ECIL, ICIM, Bull-PSI, and others. Developments in micro computing, the convergence of computer controls with telecommunications, communication satellites, fiber optics and digital switches, as well as liberalization in import policies, let to the rapid growth of the computer industry in India. Though all the while it remained ‘an assembly-oriented industry’. The mushrooming of computer training institutes and university degree courses in computer science provided the much-needed personnel needed for creating the software and maintaining the hardware in the growing industry.
  • 7. 1 New Computer Policy – 1984 The Rajiv Gandhi government initiated the ‘information revolution’, opening up the Indian market to foreign investors; gradual privatization and deregulation of first telecommunications and later other industries, reducing import and excise duties on electronic goods, computer hardware and software, and providing other incentives to the development of the information industries. The man Rajiv Gandhi chose to lead the revolution in telecommunication was Sam Pitroda, a non-resident Indian technocrat who had made good in the United States, and who passionately believed that India could leapfrog into the age of information, if only it embraced the new information technologies. He was appointed Chairman of the Telecommunication Commission, and later telecommunication adviser to the Prime Minister. He established the Centre for the Development of Telematics (C-DOT) which would design and fabricate digital automatic switching equipment for rural (RAX) and urban (MAX) telephony. Pitroda lived up to his reputation of getting things done, but in the process he trod on many bureaucrats’ toes. One section of the media wowed him; the other lambasted him for the hype he created about the potential of tele- communications for the nation’s development. Pitroda shared Rajiv Gandhi’s vision of a modern India competing with advanced industrialized nations in the new age of information, the post-industrial age. However, while urban India was swamped by multinational brands of consumer goods, the latest hardware and software, value-added services like cellular telephony, paging, and a plethora of cable and satellite channels, the rural areas and the urban poor were untouched by such happenings. Liberalization and re-structuring of the economy in the early 1990s both under the Congress and the United Front regimes, so as to promote foreign investment and private business, re-enforced this urban approach. Leftist economists dubbed this approach an instance of ‘selling out to the multinationals’. On Demand++
  • 8. 1 The Future of Indian Broadcasting New technologies in broadcasting are revolutionizing the viewing experience. Increasingly viewers are becoming empowered to define what entertainment content is delivered to their TV screens at what time. Broadcasting schedules are becoming meaningless by the day. Personal Video Recorders (PVRs) are making their way into the Indian market. Take Tata Sky’s recently launched Digital Video Recorder (DVR) service – Tata Sky Plus. The DVR allows a viewer to watch one channel, while simultaneously recording a program running on another channel. The DVR also has a host of other features – like recording any program while you’re asleep or at work or even recording the entire series of your favorite show. So no more waiting up till 2 am to watch that movie you’ve been waiting to see. No more having to miss your favorite show because you get late at work. And best of all, no need to fight over the remote. The DVR even lets you pause, re- wind, forward, and re-play live TV. According to Mr. Vikram Kaushik, Managing Director and CEO of Tata Sky Ltd “The introduction of PVR technology will revolutionize the TV viewing experience in India. The PVR’s recording and playback features will allow our subscribers to time-shift their TV viewing, and thanks to the pause and rewind features, viewers can be sure that they won’t miss any of their favorite shows any more, and that they can catch all the action in live TV broadcasts.” While the DVR gives Direct-to-home (DTH) provider TATA Sky a momentary edge over the competition, it isn’t long before they catch up with their own DVRs. In fact, leading multi-system operator in the digital cable segment – Digital Entertainment Network (DEN) Ltd. – planning to introduce a DVR service next year. “On demand is the future,” said Mr. Anuj Gandhi, CEO, DEN. A whole new level of interactivity is being introduced with digitization of TV networks. While the TATA Sky Plus DVR makes its way into homes across the nation, video-on-demand is a feature that is prevalent across all distribution platforms i.e. DTH, digital cable and Internet Protocol Television (IPTV). Video- on-demand lets viewers order particular movies available on their service provider’s library. The movie can be downloaded for a small fee and then viewed. Video-on-demand as a segment is expected to experience significant
  • 9. 1 growth in India within the next five years. On demand services providing access to games and music are also proving to be a popular feature of distribution platforms. The concept of ‘Pay-per-view’ is popular in the West and has immense potential in India. The country’s pay-per-view sector is expected to grow at an annual rate of 16 percent to cash in US$ 11.3 billion worth of revenues by 2012. Many TV service providers are focusing on their pay-per-view channels and the bouquets of movies offered in order to attract customers. With a burgeoning Indian film industry, producing 1000 movies a year, video-on- demand and pay-per-view are turning out to be lucrative business opportunities for distribution networks. ----------------------------------------------------------- ++ This article has been picked up from convergenceplus.com website and written by Mr. Vipul Mehra on dated 28th December’ 2009 and the link is: http://www.convergenceplus.com/features-5jan09.html
  • 10. 1 Going Digital** India’s Cable TV industry set for Digitization With the revolutionary transformations taking place in the television content distribution market, soon viewers all over India will be able to enjoy the benefits of watching movies and TV shows, surfing the Internet and making telephone calls without leaving the comfort of their sofas and television screens. The Telecom Regulatory Authority of India (TRAI) recently issued a set of recommendations to the Ministry of Information & Broadcasting mandating every cable network operator to transmit digitized quality video to every home by 2012, thus making possible the delivery of a host of services including Internet access and telephony via Cable TV. Transition Phase: Analog to Digital Cable TV penetration by the end of 2007, had reached 78 million out of 130 million homes in India. The cable TV sector has experienced phenomenal growth over the last few years and still has massive growth potential. Currently, cable TV transmission in India is predominantly analog and is limited to providing only TV channels. Analog doesn’t lend itself well to technological upgradation either. With stiff competition from advanced distribution technologies such as direct-to-home (DTH), headend-in-the-sky (HITS), and Internet Protocol TV (IPTV) offering TV channels, broadband and telephone Services, the local cable TV operator is going to find it difficult to sustain his business with analog transmission. The TRAI recommendations include a provision for existing registered cable operators to digitize their transmission over the next five years, and over three years for new entrants. Digitized networks have the capacity to offer a two-way path allowing broadband and thus, ‘triple-play’, which includes services such as cable telephony, video-
  • 11. 1 on-demand and Internet surfing facilities, thus allowing cable operators the opportunity to compete with the likes of DTH and IPTV. Major Trends: Competition and Consolidation Huge investments in technology are required for upgrading to digital transmission and last mile cable operators all over the country are being increasingly compelled to tie up with triple play service providers or Multi-Service Operators (MSOs) to enable digital two-way interactivity. Five major MSOs have emerged in this segment acquiring a national presence through mergers with and acquisitions of last-mile operators or by turning them into franchisees. These are the Raheja group’s Hathway Cable & Datacom, the Essel Group's Wire & Wireless India (WWIL), the Hinduja Group's IndusInd Media, DEN Digital Entertainment Network (set up by GBN founder Sameer Manchanda and Network18 chief Raghav Bahl) and Digicable Network India (set up by Jagjit Singh Kohli). These five collectively access over 20 million homes i.e. a quarter of the country’s cable TV subscribers. Hathway has bought 51 per cent stakes in Bhaskar Multinet, the cable wing of the Dainik Bhaskar Group, and Gujarat Telelinks, and acquired Marathwada Cable Network in Aurangabad. Digicable has recently acquired a 51 per cent stake in the Kolkata-based CableComm to expand in the eastern region of India. WWIL, which already has a presence in 43 cities, is the only player in the market currently to offer HITS (Headend-in-the-Sky) having acquired a license for it years ago. HITS is a technology that enables delivery of multi-channel television signals to cable operators who can downlink these from a HITS satellite and push them to their subscribers via a set top box. This is a more cost-effective method of achieving digitization since it doesn’t require too much investment from the cable operator who merely has to equip homes with the set top box and become a franchisee. Competition in the cable TV segment is intensifying as the battle over acquiring the last mile cable operators continues. New players like Asia Net and You Telecom are also entering the fray. You Telecom is said to have committed Rs. 120 (US$ 24 million) crore towards its digital cable business expansion.
  • 12. 1 Rising Investment The fragmented and unorganized cable TV sector has attracted little investment in the past, even though it is a profitable sector generating annual revenues of over Rs.10, 000 crore (US$ 2 billion). This is primarily due to massive under- reporting of subscriber numbers having an adverse impact on the broadcasters revenue. Consolidation in the industry is attracting the attention of private equity players, as the scattered cable TV operators come together to form meaningful corporate entities. The cable TV sector will come under a proper licensing mechanism where city, state or national licenses can be bought. The TRAI recommendations are a big step forward in ensuring effective licensing compliance, digitization of networks and attracting investment. Collectively, the industry is said to be investing close to Rs 500 crore (US$ 103 million) on digitization. The Way Forward The cable sector is emerging as a very attractive space owing to the TRAI recommendations and the clear edge of digital cable over its competition like DTH and IPTV in offering a larger number of channels, greater reliability even in adverse weather conditions and easier access to cheaper after-sales and customer services. According to reports of Informa Telecoms and Media Group and Media Partners Asia (MPA), India will overtake Japan, Australia, Hong Kong and South Korea to become the second largest digital cable TV home market in the Asia Pacific region However these growth plans largely depend on factors like having a more liberal FDI policy for cable operators, a focused plan for digitization, greater clarity on HITS guidelines and a licensing framework for last mile cable operators. -------------------------------------------- ** This article has been picked up from convergenceplus.com website by Mr. Bunny Sidhu on dated 28th December, 2009 and the link is: http://www.convergenceplus.com/features-5jan09.html
  • 13. 1 Future of Indian Television Broadcasting+* It definitely appears bright; the potential is immense. The number of TV owning homes has a long way to go; only 70 million TV households have been accounted for so far; an equal number have to own TVs as yet. Ad spending on the medium is a pittance compared to the amount spent in smaller TV markets globally. The amount of TV being watched is also not enough; Indians have to watch almost twice the amount of TV they are watching currently to match US viewing habits. The major issue about Indian television: one does not know which it way it will go. Will the net be the medium of delivery of television? Or will television be delivered as it has been over the past few years via terrestrial, satellite or wireless transmission to be watched on traditional television sets? Or will it be watched on handheld devices? A lot of hype has been created around broadband Internet delivery of television to Indian TV or computer homes. (Technology convergence is taking place globally; the latest takeover of Time Warner by an Internet company AOL is an indicator of that transition. AOL will in all likelihood exploit all the properties that Time Warner has on the Net and other modes of broadband delivery.) The current cable TV infrastructure in India is far-too- rickety with MSOs having little control over the state of the fibre as it gets into consumer homes. The coax fibre has not been laid keeping in mind two way connectivity and it also is not consistent all over the cable ops service area. For every cable TV home receiving a good signal there are at least another twenty homes receiving a bad signal. There is no addressability, no transparency of operations as cable ops are averse to paying government levies, and no real communication between cable TV ops and subscribers. But there is no doubt that the cable operators have done a good job by building up a cable and satellite penetration of 25 million homes all over India. And they have managed this in the past six to seven years as against the the telecom business which has been around for close to a 100 years with less than 20 million consumers. The telecom infrastructure also cannot support broadband delivery well enough. Yes DSL and leased lines are an option but they are a rich man's choice.
  • 14. 1 Satellite delivery of broadband signals is one mode that can support broadband Internet delivered television. Richard Li's Pacific Century Convergence Corp is looking at it closely and the footprint of its service will cover India. Direct PC has a similar mandate for the Indian market. Pricing, however, will be a major issue here as set top boxes will have to be purchased by consumers which they may not be open to doing if price is too high. The penetration of computers is extremely low with about 3-4 million PCs being the installed base in Indian homes though computer sales have been rising rapidly thanks to lower prices. But it is unlikely to increase so fast so as to come even anywhere close to the 70 million TV homes currently. Indiantelevision.com believes that television will be delivered the same way as it has been so far through traditional modes. It's likely that the television population will cross 100 million homes in the next 10 years. The computer population will be about 15-20 million in the next 10 years. However, some companies, television channels and television producers will attempt video streaming or delivery of video through other compression technologies on the Internet. But it will only be another option for consumers who will log on to watch a shaky picture at least for the next half decade. Cyber kiosks will have sprouted all over India in small towns and it's possible that some consumers will log on to the Net to watch some shows when they want as payment gateways will have been set up. Most viewers will, however, be watching their TV mainly via cable, terrestrial and direct to home television delivered via satellite. Cable TV infrastructure will have improved. Addressability also will have made its mark and consumers will be surfing their television sets for emails and for information. Free-to-air television will, however, continue to rule the roost but tiring will have made its mark and people will be buying their pay per view programmes and choosing the channels they want watch unlike today when everything is thrown at them with a shovel. ------------------------------------------------------- + * Article has been exactly picked up from indiantelevision.com on 28th December’ 2009 and the link is: http://www.indiantelevision.com/indianbrodcast/future/future.htm
  • 15. 1 Internet telephony and related Issues**** The focus of the article is to examine the impact of the proposed Communications Convergence Bill on e-commerce. The ambit of the paper is restricted to internet telephony as the novel and cheap method of communication and of conducting business over the net. Internet telephony is of particular interest to organizations engaged in business process outsourcing as it significantly cuts the costs of communication. In the course of this paper the author would also analyse the guidelines and license issued by the DoT for providing Internet telephony services and discusses some of the emerging legal issues that are spawned by this liberalization. INTRODUCTION After several months of debate, on April 1, 2002, the Government of India finally permitted Internet Service Providers (ISPs) to offer Internet telephony services. Earlier, the legal and regulatory framework in India did not permit ISPs to offer Internet telephony. Under terms of the ISP licence, telephony on the Internet was banned and if any ISP offered these services, the ISP licence could have been terminated. After the opening up of this sector, the Department of Telecommunications (DoT) has granted approvals and licences to several telecommunication companies to commence these services. Though the quality of Internet telephony services may not be as high as the normal international long distance services, their low cost will definitely attract more consumers. Further, with the rapid advancement in technology, it is only a matter of time that the gap between the two forms of voice communication is bridged. ------------------------------------------------------------------- **** This article, case and communication convergence bills has been taken from the website-http://www.legalservicesindia.com, written by Mr. Dhruv Madan and link is: http://www.legalservicesindia.com/articles/teleph.htm
  • 16. 1 WHAT IS INTERNET TELEPHONY? INTERNET TELEPHONY: THE CONCEPT (a) Meaning Internet Telephony is a form of Internet Protocol (IP) Telephony. IP Telephony is used as a generic term for the many different ways of transmitting voice, fax and related services over packet-switched IP-based networks. The basic steps involved in originating an Internet telephone call are conversion of the analog voice signal to digital format (binary data) and compression/translation of the data into IP packets for transmission over the Internet; the process is reversed at the receiving end. This process is called modulation-demodulation, giving the term modem. The communication usually takes place real time. Thus, the main difference between Internet Telephony and normal telephony is that whereas in normal telephony, circuit switching technology is used, Internet Telephony is based on packet switching technology. (b) Difference between Internet Telephony and Voice-Over-IP: IP Telephony can be subdivided into two major groups: Internet Telephony and Voice-over-IP (VoIP), the difference being the type of the underlying IP network i.e. the medium of transmission. Internet telephony primarily involves the usage of the Internet rather than the Public Switched Telephone Network (PSTN) to transmit 'real-time' audio from one personal computer (PC) to another (or in some instances to another telephone itself). However, in the case of VoIP, it is generally an IP technology suite (i. e. a private network) that is used rather than the public Internet. Another important distinction between Internet Telephony and VoIP is the quality of the transmission. Since VoIP is usually a closed / private network, the technical hurdles are less daunting, which results in greater reliability in the transmission of voice packets than in Internet Telephony where the voice packets are transmitted on the Internet. Therefore, the chances of having a live or real-time conversation are better in VoIP than in Internet Telephony. (c) Methods of Internet Telephony Following are the popular methods of Internet Telephony as recognized by the International Telecommunications Union (ITU) (i) PC to PC
  • 17. 1 Under this method, calls are transferred from one PC to another PC. No gateway with a PSTN is required, because calls are not switched by a PSTN. Rather, the principal medium of transmission is always the Internet. (ii) PC to Phone / Fax Under the PC to Phone / Fax method, the conversion of speech into packets takes place on the originating users PC. The process is reversed at an Internet Telephone Service Providers (ITSP) gateway server, which then dials the called party’s telephone number and, when a connection is made, starts sending the callers speech and transmitting the called party’s speech in the other direction. The PC to Phone / Fax category includes PC to Phone Voice and PC to Call Centre services. (iii) Phone to Phone Phone to Phone method of Internet Telephony is closely associated with the traditional telephone experience. ITSPs are required to install their own gateways and enter into termination agreements all over the world, both with independent ISPs as well as established PTOs. In Phone to Phone Internet Telephony, the customer, using an ordinary telephone, dials an access code and then the telephone number; the access code then routes the call to a special computer gateway (the IP network). Local computer gateways for companies offering this type of service must be optimally placed in strategic geographic areas. For instance, if a customer using phone-to-phone Internet Telephony plans to call London (England) from Mumbai (India), then local gateways must be located in both London and Mumbai. The gateways convert audio into data for transmission across the IP network and then convert incoming data back into analog signals. 3. LICENCING INTERNET TELEPHONY SERVICES IN INDIA Pursuant to the New Telecom Policy, 1999, the DoT has announced guidelines permitting ISPs to process and carry voice signals (Guidelines). ISPs can only offer these services within the service areas for which they have a licence. Pursuant to the Guidelines, the DoT has revised the License Agreement for ISPs to include the provision of Internet telephony services (Revised License). The Revised License has been issued under the authority granted to the DoT under the Indian Telegraph Act, 1855, the Indian Wireless Telegraphy Act, 1933 and the TRAI Act, 1997.
  • 18. 1 All ISPs desirous of providing Internet telephony services also have to make an application to the DoT for signing an Amendment to their existing ISP license. The old ISP license agreement, which banned Internet telephony services read as follows: 1.12.3 Telephony on the Internet: Telephony on the Internet is not permitted. The license will be liable for termination for any violation of this clause of the License Agreement. The licensee shall also take measures on his own and as and when directed by the Government at his own cost to bar carriage of Telephone traffic over Internet. However, the Revised License does not contain the above clause, and allows ISPs to provide Internet access / content services including, Internet telephony services. (a) Provision of Internet Telephony Services As per the Revised License, Internet Telephony is an application service, which customers of ISPs can avail of from their PCs or other IP based Customer Premises Equipment (CPE).The Revised License restricts the manner in which ISPs can provide Internet Telephony services to only three types: (i) From a PC in India to a PC inside and outside India (ii) From a PC in India to a telephone outside India (iii) From an IP-based H.323/SIP Terminal in India to similar terminals in India and abroad provided they employ the IP addressing scheme of the Internet Assigned Numbers Authority ISPs are not allowed to provide any Internet telephony services which fall outside the purview of the above three modes. It can be seen that the scope of Internet telephony in the second mode to only telephones outside India. So if an Internet telephony service provider allows a PC user in India to call a telephone in India, the same would violate the Revised Licence and the ISP could be penalized for the same. It seems that the DoT has stipulated this condition so that national long distance operators do not lose out on their customer and revenue bases. (b) Services that fall outside the purview of Internet Telephony The Revised License also states that ISPs are prohibited from offering the following types of services as they fall outside the purview of Internet telephony: (i) Voice communication from anywhere to anywhere by means of dialing a telephone number (PSTN/ISDN/PLMN) as defined in National Numbering Plan;
  • 19. 1 (ii) Originating the voice communication service from a telephone in India; (iii) Terminating the voice communication to telephone within India; (iv) Establishing connection to any public switched network in India; (v) Dial up lines with outward dialing facility from nodes; and (vi) Interconnectivity between ISPs who are permitted to offer Internet telephony services and the ISPs who are not permitted to offer Internet telephony services. (c) Quality of Service (QOS) Terms The DoT has not provided any parameters for the QOS14 for Internet telephony in the Revised License. The Guidelines and Revised License state that the Telecom Regulatory Authority of India (TRAI) shall prescribe the QOS from time to time. The role of the TRAI is to create an environment conducive to the growth of telecom sector, and safeguard a customer's interest and ensure that he gets the QoS that he has contracted for. As regards QOS, the TRAI has the substantive role in laying down standards, assessment of QOS, and action for improvements. It has, therefore, the following main functions to perform in this regard: (i) Setting Quality of Service Standards (ii) Monitoring (iii) Enforcement As of now, the TRAI has not framed any QOS for Internet telephony. Once the TRAI imposes certain basic QOS parameters, ISPs will be obligated to meet the minimum QOS criteria while providing Internet telephony services to their customers. In order that the customers can effectively utilize Internet telephony services, the TRAI should formulate the QOS terms as soon as possible. (d) Tariff / Fees
  • 20. 1 The Guidelines state that the TRAI has not levied any tariffs on ISPs for the Internet telephony services that will be provided over the public Internet. However, there is a saving provision that states that the TRAI may levy a tariff at any time and it shall be binding on the ISP to pay such tariff. This provision has also been incorporated in the Revised Licence. Moreover, the ISPs do not have to pay any license fee and USO levies for Internet telephony services. Nevertheless, the DoT reserves the right to impose a license fee on the ISP at any time during the license period. Hitherto also, ISPs do not have to pay any license fee for providing Internet services. The DoT has continued to impose this license fee-free regime for ISPs in order to promote the proliferation of Internet usage and now, Internet telephony services. However, since Internet telephony services are in direct competition with basic telephony services, in the event there is unfair competition, the DoT could impose a license fee to create a level-playing field. (e) Security Monitoring As per the Guidelines and Revised License, ISPs who provide Internet telephony services through their own Internet gateways would have to provide suitable monitoring facilities for the security agencies at their own cost. The ISPs also have to provide periodic reports to the DoT regarding the flow of Internet telephony traffic through its network. (f) Inter-Connection The Revised Licence permits only ISPs who have obtained the requisite license to offer Internet telephony services. It prohibits any interconnection between an ISP that is allowed to offer Internet telephony and an ISP that is not allowed to offer Internet telephony. 4. EMERGING LEGAL ISSUES (a) Ambiguity in Definition While the Guidelines and Revised Licence discuss what services would amount to Internet Telephony for the Indian context, they have failed to define the term Internet telephony per se. The meaning given to the Internet telephony is a restrictive in nature, as it states what services would fall within and outside the purview of Internet telephony for the Indian ISPs. In fact, many of the services, which are prohibited under the revised license, amount to Internet telephony in the international context. For example, originating or terminating a voice communication service from / to a telephone in India would amount to Internet telephony in the international context, if the public Internet is used as the medium of communication.
  • 21. 1 The Guidelines and License do not lay down any clear parameters that need to be satisfied by any telecommunication service to be classified as Internet telephony. While this problem exists world over, and even at the ITU level, this ambiguity could lead to problems in the future when new forms of technology and modes of communication emerge. At the earliest, as TRAI has suggested, there is a need to distinguish between Internet Telephony and VOIP. The Governments of different countries need to come together and resolve this issue at the earliest. (b) Meaning of PC and Telephone The Revised License states that PC to PC Internet telephony is permitted in India. However, the Revised License does not clearly define a PC. Under the Information Technology Act, 2000 (ITA), a computer is defined as follows: Computer means any electronic magnetic, optical or other high-speed data processing device or system which performs logical, arithmetic or memory functions by manipulations of electronic, magnetic or optical impulses, and includes all input, output, processing, storage, computer software, or communication facilities which are connected or related to the computer in a computer system or computer network. Thus, the definition of a computer is extremely wide and is not merely restricted to a normal computer, which is used at home or in offices. Moreover, while the Revised License states that the telephone call cannot be originated from or terminated on a telephone in India, it does not define the word telephone. Even the telecommunications laws in India have no clear definition of the term telephone. With the emergence of new technologies and products, the meaning of PC and telephone could be extended to also include personal digital assistants (PDA) (eg. palm pilots) and even mobile phones with computing power (like the Nokia 9110). Moreover, there is also a convergence between PDAs and telephones (like the TREO). If a call is made from such devices, it is uncertain whether the same would be legally permissible. Another emerging legal issue is concerning IP phones. There exists some ambiguity as to whether IP phones can be freely used to provide Internet telephony services. While it is technically possible to originate calls from IP-based networks, it is uncommon to terminate calls from other networks onto an IP-based network (except in the case of IP PABX system). Since a call from to a number on the national numbering plan is prohibited, a call from an E.164 universal numbering plan may also not be allowed. However, the International Telecommunications Union is studying an option of assigning an E.164 numbering resource to an IP
  • 22. 1 phone using the ENUM protocol. The ENUM protocol converts the E.164 number to an IP address, and a telephone user can call an IP phone by dialing the E.164 number. The perturbing question is whether this would be allowed under Indian laws as they stand right now. Therefore, it would be necessary to determine and clarify the legitimacy of the type of instruments and the system being used while making an Internet telephone call in order to stay out of any legal problems. (c) Quality of Services One of the major difficulties in Internet telephony is in achieving a similar standard of QOS for Internet telephony services as for normal telephony services. The difficulty could arise due nature of the IP network. The IP network uses packet mode of data transmission that can degrade the quality of the voice communication as the packets could get lost in transmission on the public Internet, there could be a delay in transmission, there could be a variation in the packet arrival or there could be an echo effect due to the delay between the transmission of a signal and its receipt. Therefore, while determining what amounts to real time in the context of Internet telephony, it is necessary that the TRAI keeps in mind the recommendations of the ITU on Real Time. The ITU in its recommendation no. G.114 (2.96 revision) recommended certain limits for one-way transmission time for conditions with echo adequately controlled. According to Recommendation G.131 (Stability and Echo): 0 to 150 ms: Acceptable for most user applications .150 to 400 ms: Acceptable provided that Administrations are aware of the transmission time impact on the transmission quality of user applications above 400 ms: Unacceptable for general network planning purposes; however, it is recognized that in some exceptional cases this limit will be exceeded. Another practical difficulty that ISPs are facing is the lack of adequate co-operation from basic telephone operators. Unless the basic operators give better QOS in their agreements with ISPs, ISPs will not be able to provide better QOS to their subscribers. While last year, the TRAI released its recommendations for QOS for ISPs offering Internet Services, ISPs are unable to meet these QOS terms because of the lack of co-operation from basic operators. Therefore, the TRAI must keep in mind the existing competition and economic scenario while framing QOS for Internet telephony services. (d) Liability of the ISP
  • 23. 1 The ITA contains provisions dealing with the liability of Network Service Providers (NSPs). A NSP has been defined under the Act to mean "an intermediary". An "intermediary", with respect to any particular electronic message, means any person who on behalf of another person, receives stores or transmits that message or provides any service with respect to that message. Thus an ISP would be an NSP as it receives stores or transmits electronic messages over the Internet on behalf of its subscribers. The ITA stipulates that every NSP is given general immunity as regards any offence under or contravention of the Act or the provisions made there under, if such NSP proves that (i) such offence or contravention was committed without its knowledge or (ii) that it had exercised all due diligence to prevent the commission of such offence or contravention. Under the ITA, publication or transmission or causing publication of any obscene information is an offence. Therefore, if while using Internet telephony services, if the subscribers transmit any obscene information, the ISP could be held liable for such transmission. However, if the ISP can prove that it was not aware of such contravention or if it had taken reasonable steps to prevent such contravention, it may be immune from any penalty or liability. Therefore, ISPs must be careful to include appropriate terms in their subscriber agreements to preclude such liability. (e) Validity of Messenger Services Off late, there has been some debate regarding voice chat facility which instant messenger services have been offering. There are various issues that arise in this context which need to be addressed in order to determine whether such a voice chat facility is legal. The first issue that arises is whether such services amount to Internet telephony. Under normal circumstances, they would amount to Internet telephony as the instant messengers use the public Internet as a means of transmitting voice between two or more users. The second and more important issue is whether these messenger services are permitted to offer these services in India. As discussed above, in order to offer Internet telephony services, the service provider requires a license. Currently only ISPs and basic service operators (i.e.BSOs, NLDOs and ILDOs) are allowed to provide such services as per the provisions of their license. Moreover, no interconnection is allowed between an ISP who has the Internet telephony license and an ISP that does not. Therefore, in order to offer the voice chat facility using the public Internet, the messenger would have to obtain an ISP license. Otherwise, the messenger may have to enter into an appropriate arrangement with the ISP wherein the voice chat facility is offered to the messenger users. However, the
  • 24. 1 validity of such an arrangement is also unclear under the law (especially as ISPs are not allowed to assign or sublicense their services). The issue is further complicated if the ISP with whom the messenger has an arrangement does not possess the Revised ISP license. It is essential that ISPs and the messenger services settle this problem at the earliest. (f) Blocking of Internet Telephony Websites The ISP licence does not require that an ISP must provide Internet telephony services only to its Internet subscribers, nor does it mandate that Internet telephony and Internet services have to be provided together. However, news reports indicate that after April 1, 2002, some ISPs have started blocking access to websites of other rival ITSPs (including foreign ITSPs). If so, do they have the authority to block the sites? Further, many ITSPs have tied up with international ITSPs to leverage their customer base. The viability of this option remains to be seen, as foreign ITSPs can set up 100% subsidiaries in India without the help of Indian ISPs. In fact, it may be economically advantageous for them to do so as they would already have their servers and networks established in foreign countries. COMMUNICATIONS CONVERGENCE BILL, 2001
  • 25. 1 The Communications Convergence Bill, 2001 (Convergence Bill) aims at promoting, facilitating and developing the carriage and content of communications including broadcasting, telecommunication and multimedia in an orderly manner. It recognizes the coming together of voice, video and data, aims to set up a single super-regulator for the telecom, Internet and broadcasting sectors, to be called the Communications Commission of India (CCI). The Convergence Bill will replace the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, the Telegraph Wires (Unlawful Possession) Act, 1950, the Cable Television Networks (Regulation) Act, 1995 and the TRAI Act, 1997. In the present scenario different services like basic telecom, cellular, Internet and satellite television have different licenses and are regulated by different agencies. The present situation does not allow bundling of services, like your cable operator cannot offer you telecommunication services; your ISP cannot carry voice etc. The licensing regime that exists as of today service operator has to apply for licenses separately and are permitted based on the regulations governing service. This would change with the adoption of the Communication Convergence Bill, 2000.Recommendations of the Bill: The Convergence Bill proposes to have a single authority Communications Commission of India responsible for issuance of licenses and regulating the communications sector including the infrastructure and the content delivered through the infrastructure. The bill also proposes setting up Communications Appellate Tribunal. Any person aggrieved by any decision or order or penalty of the commission could appeal to the tribunal for speedy decision on the appeal. The commission and the appellate tribunal have been given power equivalent of a civil court. Responsibilities of the Commission. The commission would be responsible for providing licenses under four categories namely: 1. Network Infrastructure facilities (Infrastructure Service Provider) 2. Network Services (Network Service Providers) 3. Application Services (Application Service Providers) 4. Content application services (Content ASP) The classification is technology neutral and service sector neutral. The segmentation of the market into the four different segments would be based on the services provided. Each layer is dependent on one or more of the earlier layers for the provision of services. The Act, it is hoped, shall usher in the era of convergent handling of communication medium in place, i.e. the Communication Commission of India shall be responsible of handling basic telephony, cellular service, cable, satellite channel and Internet service operators. The bill shall segment the market
  • 26. 1 on the basis of the layers as illustrated above. This would enable operators to obtain licenses for the specific layer rather than for the service. For e.g. an operator could take license for offering only infrastructure facility with the services being offered by some other operator. Hughes Tele.com, the private basic service operator for Maharashtra would be able to offer services like telephony, Internet (it offers these even today), interactive content or any other service over the cable coming into your home. The Convergent View "Convergence" refers to the fact that different kinds of communication services, whether in the form of voice, text or video, can be provided using the same basic infrastructural facility, and similarly, different kinds of infrastructural facilities can be utilized to provide the same service. For instance, share prices can be accessed via the Internet on a PC or through the wireless medium on a mobile phone. Perhaps the most significant aspect of the Bill lies in the name itself. It recognizes the "blurring of borders between telecommunications, computing and media”. Further, it also acknowledges that "The continuous development of new technologies results in an inability to predict the future evolution of convergence viz. the development of new services like web-casting, Internet Telephony etc. resulting in the need for regulations which does (sic) not aim to predict the future, but aspires to be flexible enough to accommodate and propagate any permutation and combination of technologies and services." The Bill, smartly enough, has steered clear of burdening itself with technological details. The three key aspects in any communication are: The infrastructure facilities used, such as earth stations, satellites, cables, etc. The kind of service provided such as telephony, broadcast of cricket matches, etc. The technology used to provide the service The Convergence Bill does not concern itself with the third aspect above. It only seeks to regulate the communication sector based on the nature of infrastructural facility and the nature of service provided. The basic objective Irrespective of the infrastructure or technology used, long distance communication is based on electromagnetic waves, of varying frequency. In order to ensure hassle-free communication, a proper allocation of frequency bands to various service providers is crucial. For this purpose, the Bill proposes the setting up of a Spectrum Management Committee, which will earmark distinct frequency bands for use in strategic and commercial purposes. The Bill also envisages the setting up of the Communications Commission of India, which will be the regulatory agency on the communications sector. The Commission will be responsible for assigning the various frequencies (earmarked by the Spectrum Management Committee for commercial purposes) among the
  • 27. 1 various users, and giving out licenses to service providers. The objectives of the Commission, as listed in the draft Bill, are as follows: "The Communications Commission of India, while exercising its functions shall be guided by the following principles: (i) that the communication sector is developed in a competitive environment and that market dominance in a converged environment is suitably regulated; (ii) that communication services are made available at affordable cost to all uncovered areas including the rural, remote, hilly and tribal areas; (iii) that there is increasing access to information for greater empowerment of citizens and towards economic development; (iv) that quality, plurality, diversity and choice of services are promoted; (v) that a modern and effective communication infrastructure is established taking into account the convergence of information technology, media, telecom and consumer electronics; (vi) that defence and security interests of the country are fully protected; (vii) that introduction of new technologies, investment in services and infrastructure, and maximization of communications facilities and services (including telephone density) are encouraged; (viii) that equitable, non-discriminatory interconnection across various networks are promoted; (ix) that licensing criteria are transparent and made known to the public; (x) that an open licensing policy allowing any number of new entrants (except in specific cases constrained by limited resources such as the spectrum) is promoted; and (xi) that the principle of a level playing field for all operators serving consumer interest, including existing operators on the date of commencement of the Act, is promoted." Effects With the bill adopted, service operators would be able to offer multiple services over the same network. This shall reduce the cost and other overheads for the operator. The bill defines the physical network, network services and the content delivered over them independently thus enabling the use of the same network to carry
  • 28. 1 multitude of services. This shall help solve the anomaly of having a separate license and network for say offering Internet, telephony and cable services. The bill shall increase the value of companies in the communications business specially the businesses owning the last mile access like MTNL, Hughes Tele.com, and BSNL etc. The cable operator in your colony would have the best of the world with his network. He could now also start bundling telephone services, Internet and other value added services than just the plain old un-interactive cable television. Licensing Regime under the Bill. The Convergence Bill also provides for a new licensing regime, with a limited number of five licenses, which include network infrastructure facilities, networking services, network application services, content application services and value-added network application services. While granting licences, the CCI may grant them either singly or jointly, depending upon the nature of services to be offered. Therefore, while providing Internet telephony services, the service provider would have to obtain the network application services licence and probably the value-added network application services licence under the Convergence Bill. CLASSIFICATION OF INTERNET TELEPHONY UNDER THE WTO: The General Agreement of Trade in Services (GATS) under the World Trade Organization (WTO) envisages the progressive liberalization of trade in telecommunications services. Though, India has made no specific commitments for Internet telephony, it has made certain commitments for other telecommunication services. Going forward, it would be important for the Indian Government to understand how Internet telephony services could be classified under the GATS framework while making any commitments. Under GATS, telephony falls within the purview of telecommunications services as per the Central Product Classification System (CPC) . Telecommunications services are further classified as basic telecommunications and value-added telecommunications. It would be useful to see what commitments India has made in this sector and analyse how Internet telephony can be classified for the purposes of GATS. (a) Basic Telecommunications Services Vis--vis Internet Telephony Basic telecommunications services are further classified as: (i) Voice telephone; (ii) Packet- switched data transmission; (iii) Circuit- switched data transmission;
  • 29. 1 (iv) Telex; (v) Telegraph; (vi) Facsimile; (vii) Private leased circuit; (viii) Other - including mobile communications, and various others, (e.g. satellite services, paging, trunked radio) depending upon the country. For the purpose of Internet telephony services, voice telephone, packet-switched data transmission and other services would be relevant. Of these three, India has made commitments with respect to voice telephone and other services. (i) Voice Telephone Voice Telephony Services have not been defined or explained under the GATS. View of the European Union: It would be helpful to look at the definition of voice telephony according to Article 1 of the Directive of European Union, which defines Voice Telephony as the commercial provision for the public of the direct transport and switching of speech in real time between Public Switched Network termination points, enabling any user to communicate with another termination point. Further as per the said Directive, Internet telephony is defined as Voice Telephony if it meets the following criteria: the communications are subject of a commercial offer; the service is provided for the public; the service is provided to and from public switched network termination points on fixed telephony network; and, it involves direct transport of speech in real- time. As per this definition, it can be understood that the first two forms of Internet Telephony (i.e. PC to PC and PC to Phone) would not be characterized as Voice Telephony under this Directive, simply because the service would not be provided solely "to and from PSTN points". View of the United States: However, the US meaning of voice telephony is broader. As per Federal Communications Commission (FCC) of USA, IP telephony services enable real-time voice transmission using Internet Protocols. Voice Telephony as Public Telephone Services: Under the CPC, voice telephony services are classified as Public Telephone Services. Public Telephone Services are further classified as Public local telephone services Public long distance telephone services.
  • 30. 1 Mobile Telephone Services With respect to voice telephone service, Indian commitments are limited to local/long distance, for public use over a public telecommunication transport network and wire based (i.e. for fixed network of subscribers) services. The Internet is a public network of computers and can be used for transport of telecommunications, such as voice and data. Thus, it could be interpreted as a public telecommunication transport network in case of Internet telephony. As mentioned earlier, the main difference between Internet telephony and normal telephony is that whereas in normal telephony, circuit switching is used, Internet Telephony is based on packet switching technology. In packet switching, electronic transmissions are chopped into packets of varying numbers of bytes. Each packet is given a header or address label, and sent from one network node towards another. The packets are (theoretically) bounced along from one router to another, armed at each hop with only enough information to get them safely to another router, where the process is repeated. By contrast, on circuit-switched networks operating under a protocol such as Signalling System 7 (SS7) a call is routed through a hierarchy of local, inter-urban and international switches to establish a circuit between caller and called party. Though Internet Telephony could amount to voice telephony, it is suggested that it should fall under a separate new category as it involves a different form of technology from traditional voice telephone services. This proposition can be supported by the fact that a separate classification was resorted to with respect to mobile telephone services based upon the technological difference between mobile telephony and normal telephony. Further, India has not made any specific commitments under voice telephone for Mode 1(cross-border supply) and Mode 2 (consumption abroad) of supply under the GATS. Therefore, even if Internet telephony is treated as voice telephony, by opening up Internet telephony, India is already a step ahead since it has not made any specific commitments in this respect. (ii) Other Services This is a broad group that includes various services such as mobile communications, satellite services and radio paging services. As discussed above, due to the technological differences, India could argue that Internet Telephony should fall under this category. As of now, India has only committed that Foreign Service providers can set up operations to provide these services provided they obtain the licence from the DoT. However, there are no commitments with respect to these services under Mode 1 and 2.
  • 31. 1 Value-added Telecommunications Services Value-added Telecommunications Services are classified as: (i) Electronic-mail, (ii) Voice mail, iii) On- line information and data base retrieval, (iv) Electronic data interchange, (v) Enhanced/ value- added facsimile services, including store and forward, store and retrieve, (vi) Code and protocol conversion, (vii) On- line information and/ or data processing (inc. transaction processing).India has made some commitments with respect to services (i), (ii), (iii) and (v). As per the CPC, these services have been qualified as Data and message transmission services. Data and Message Transmission Services are further sub- divided into: (i) Data Network Services (75231): Network services necessary to transmit data between equipment using the same or different protocols. This service can be provided via a public or dedicated data network (i.e. via a network dedicated to the customer's use); (ii) Electronic Message and Information Services (75232): Network and related services (hardware and software) necessary to send and receive electronic messages (telegraph and telex/TWX services) and/or to access and manipulate information in databases (so-called value-added network services). However, Internet telephony may not fall under these categories, as it is not a network service. Further, India has no commitments with respect to Electronic data interchange, Code and protocol conversion and On- line information and/ or data processing (inc. transaction processing). From the above analysis, it can be concluded that Internet Telephony services could fall within the meaning of Voice Telephony services. However, due to the technological difference between Internet telephony and traditional voice telephony, it would be suitable to formulate a separate category for classification of Internet telephony. Depending upon the reciprocal commitments India receives from other countries, it could use these as a negotiating tool at the WTO.
  • 32. 1 CONCLUSION With increased competition in the telecommunications sector, relatively high tariffs and low tele-density, India is an attractive market for Internet telephony and VoIP. In fact, experts have indicated that India will be the fourth largest market for Internet telephony in the Asia Pacific region, after China, Japan and South Korea. After the opening up of this sector, several foreign companies have also joined the race to offer Internet telephony services in India. For example, US-based Net2Phone and
  • 33. 1 India based CalTiger have joined hands to deliver VoIP services to the United States at as low as Rs 3 per minute. Further, World Phone Internet Services Pvt. Limited, a joint venture between US-based WPI group and Delhi-based IT-enabled service company Speed India.com Holdings has already ventured into Internet telephony in the country. Several market players have also begun plans to commence and offer video-conferencing facilities. While the growth of Internet telephony will certainly increase the competition with basic service operators, on the whole the consumer will stand to gain. However, regulations that artificially restrict the usage and growth of Internet telephony will only make the viability of this service more complex and ambiguous. The DoT needs to try to resolve all forms of ambiguity in the licence terms to avoid future misunderstandings. At the same time, service providers must ensure that their Internet telephony services fall within the parameters of the existing regulatory framework. This will assist in minimizing legal liability. Bibliography 1. www.indiantelevision.com
  • 34. 1 2. www.Exchange4media.com 3. www.mib.nic.in 4. www.trai.gov.in 5. www.etnow.com 6. www.economictimes.indiatimes.com 7. Mass Communication in India by Dr. Keval J. Kumar 8. India on Television by Nalin Mehta 9. ‘Impact’ Magazine 10. ‘Business Standard’ Daily Newspaper 11. ‘Public Relations Voice’ Magazine. 12. ‘The Indian Express’ Daily Newspaper.