A recent report by the Department of Telecommunications has rekindled the fire over net neutrality. India is a land of the Buddha, who preached the middle path, the report — which wants the government to bring VoIP based domestic calling services under licensing — points out. What will immediately strike one about the report is the flawed logic at the heart of it. But things may be not as simple as that. The argument sounds disingenuous rather than merely wrong. The underlying attempt seems to be protection of telcos' revenues at the cost of net neutrality.

It is unfortunate that even after the recent hullabaloo over Airtel Zero and TRAI's consultation paper that received nearly one million responses in support of net neutrality, the proponents of weak net neutrality are still advocating the misguided notion that telcos should have the right to charge the Internet companies because the latter are making lots of money by using the networks built by the former. It is true that the telcos pay high prices for spectrum to the government, but that does not justify the compromise. Instead, the Centre should make more spectrum available.

Steps against net neutrality, as recommended by the DoT report, could be a blow to start-up Internet businesses. In recent years we have seen a number of domestic start-ups growing to large players. This would not have been possible without non-discriminatory access to the Internet. According to an estimate, the Internet user base in the country is likely to reach 503 million — including 314 million mobile internet users — by 2017. At such a juncture, adoption of the DoT proposals could cripple the growth prospects of e-commerce in the country. At the same time, such a move will dampen the excitement the government has laboriously built around India in recent months through a series of initiatives, including Digital India.

Meanwhile, the government has invited states to discuss the issue of FDI in e-commerce and multi-brand retail. At present, 100 percent FDI is allowed in B2B e-commerce, but not in B2C companies selling directly to consumers. I think the issue is just going to lead to a prolonged debate and we are in dire need of a comprehensive policy for the sector. As far as FDI in retail is concerned, I think it could offer more opportunities than threats, but again the government must ensure transparent implementation of policy initiatives. It must make sure that big players do not deviate from the norms stealthily and small players are not overrun by them.

I invite your opinions.