Daily PT Capsule Feb 9

TRAI supports Net Neutrality

The Telecom Regulatory Authority of India (TRAI) in a statement on Monday 8th Feb barred telecom service providers from charging differential rates for data services, effectively prohibiting Facebook’s Free Basics and Airtel Zero platform by Airtel in their current form.

1) No service provider can offer or charge discriminatory tariffs for data services on the basis of content. For example, a consumer could not be charged differently based on whether she was browsing social media site A or B, or on whether she was watching streaming videos or shopping on the Internet, it added.

However to bring more users on the Internet, this prohibition would not apply to other forms of tariff differentiation that were entirely independent of content.For instance, providing limited free data that enables user to access the entire Internet is not prohibited.

2) No service provider shall enter into any arrangement, agreement or contract, by whatever name called, with any person, natural or legal, that the effect of discriminatory tariffs for data services being offered or charged by the service provider for the purpose of evading the prohibition in this regulation.

3) Reduced tariff for accessing or providing emergency services, or at times of public emergency has been permitted.

4) TRAI said a fine of Rs. 50,000 would be levied per day, subject to a maximum of Rs. 50 lakh, for any violation of these regulations by the service providers. An exemption, however, has been made for offering emergency services.

5) TRAI may review these regulations after a period of two years.

Analysis

In support of Net Neutrality – The decision comes as a much sought win for net neutrality activists. The concept of differential pricing was not supported by many internet users who saw this as an attempt by big telecom and technology companies of using their monopoly power for their own benefit. It was also seen as an attempt to tip the scales in favour of established companies with huge marketing budget against small start-ups. Regulating over the top applications like Whatsapp and Skype could have led to slowdown in the app development space.

In support of Differential Pricing – The industry representatives claim that differential pricing is an effective marketing tool and would have helped in bringing online the next one billion people. It will negatively impact the growth of the industry and the consumers who may need such plans to afford data connections.

Differential pricing for different levels of services was a well-accepted principle across all industries and the concept inherently recognised the economic principle of paying differently for different levels of service and experience. For example, the differential pricing for the 2nd class, 1st AC, sleeper class, etc. based on different experiences and service levels. In the telecom sector there are virtual highways that need to follow the same principle. EU is considering allowing ‘specialised services’ with few priority services having fast lane Internet connection.

Source: TheHindu

New capacity addition in clean energy sector

The new capacity addition to the clean energy sector in the first nine month period of the nine month fiscal recorded 44 percent growth compared with the same period a year ago. The renewable energy sector added 3,030 MW of new capacity during first three quarters of this fiscal compared with 2,104 MW in the same period of the previous fiscal, according to the Union Ministry of New and Renewable Energy (MNRE).

Of the new capacity added so far during this fiscal, wind and solar segments contributed 1,645 MW (1,333 MW in the year-ago period) and 1,120 MW (431 MW) respectively. Small hydro-power and bio-power contributed 122 MW (187 MW) and 132 MW (152 MW) respectively.

Solar continues to be the fast-growing segment and has overtaken bio-power in total capacity. Wind power sector has crossed the milestone of 25,000 MW in total capacity.

As of December 31, 2015, total grid-installed renewable power capacity in the country stood at 38,822 MW. Total installed capacity of wind power stood at 25,088 MW. Solar was the second major segment with cumulative capacity of 4,879 MW. Bio-power occupied the third position with a total installed capacity of 4,551 MW.

Analysis

Renewable Energy Targets – The government has set a target for renewable energy generation of 175 gigawatts by 2022.  Of the target capacity, 100 GW would be from solar power, 60 GW from wind, 10 GW from biomass and 5 GW from small hydro power, according to the Union ministry of new and renewable energy.

Currently, on an average, the country is adding 1,000 Mw of solar power annually. At this rate, 100,000 Mw in six years looks far fetched even if one was to assume that India can match China which has added solar capacity at an ever increasing rate.

Source: TheHindu, MNRE

Gold and PAN card norm

The country’s jewelers have decided to go on a day’s strike on February 10, 2016, in protest against the government decision on furnishing PAN card details for purchase of gold costing Rs. two lakh and above.

Over 300 associations covering over one lakh shops across the country, are likely to participate in the strike. Business volumes have fallen by 30 per cent after PAN was made mandatory a month ago for jewellery purchases of over Rs. 2 lakh.

The federation wants the ceiling to be fixed at Rs.10 lakh. Most of the business is generated from small towns and rural areas where a majority of the population do not have PAN cards.  The gems and jewellery industry is a labour-intensive industry harnessing an over one crore-strong labour force. The domestic industry is currently estimated at Rs. 2.51 lakh crore and has a potential to grow to five lakh crore by 2018.

Analysis

Making PAN card mandatory for purchases of above Rs. 2 lakh was done to control the black money transactions done in gold. It would help in bringing transparency as well as accountability both on the part of jewellers and buyers.

But the gems and jewellery sector is not a source to attract black money since there is a value addition of 15-20% in developing the products while bullion is a preferred segment for investment by black money holders. Today, people buy jewellery items not only for their daily uses but also for essential purposes like festive and religious functions including marriages. The PAN card rule could adversely affect rural demand where people don’t have a PAN card.

Anti Missile Shield plan against North Korea

U.S. could deploy anti-missile shield in response to North Korea’s satellite launch. China’s Foreign Ministry spokesperson, Hua Chunying, on 7th Feb stressed that China is “deeply concerned” about the decision by the United States and the Republic of Korea (ROK) to start official negotiations on the deployment of the Terminal High Altitude Area Defense (THAAD) system. The THAAD system comprises advanced U.S. anti-missile defence batteries.
Washington is of the view that following North Korea’s nuclear test in January, the THAAD system would be required to protect the 27,000 American troops that have been deployed in South Korea.

Analysts say that each THAAD missile battery would cost $1.3 billion and will be capable of covering half or two-thirds of South Korean airspace.

Analysis

North Korea launched a rocket carrying a satellite into space recently. International concerns is whether North Korea’s rocket technology could potentially be used to also deliver a nuclear weapon. U.N. Security Council “strongly condemned” the launch and reaffirmed that “a clear threat to international peace and security continues to exist, especially in the context of the nuclear test.”

Earlier to it North Korea had claimed that it successfully detonated its first hydrogen bomb, a claim that if confirmed would signal a major advancement in the isolated country’s nuclear capabilities. From 2006 to 2013, North Korea conducted three nuclear tests of atomic weapons – all at the Punggye-ri site.

In the light of tensions between North Korea and South Korea along with respective backing from China and USA, the move could result in escalating tensions in the region.
Source: TheHindu, CNN

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