Team Speak

Sugarbox Networks contributes for the TRAI Consultation paper on – “Regulatory Framework for Promoting Data Economy Through Establishment of Data Centres, Content Delivery Networks, and Interconnect Exchanges in India”

Today, Internet has become our lifeline and in this modern civilization there is little doubt that public acceptance towards it has come from growing user experience and easy access. At the heart of this is solving for quick and accurate delivery of Internet content. While emerging technologies such as AI take strides in making the Internet error-free, there is also a parallel need to deliver Internet content faster to the end-users.

One way to achieve this is by placing large swathes of content closer or localised for the end-user – a task specialised by a Content Delivery Network (CDN). Having emerged around 25 years back, the CDN industry is in a state of transit as it adapts to support delivery of data-heavy digital services. A common driver behind growth of CDN services in mature Internet markets     such as the USA  and EU  has been the ‘regulation-liberal’ approach adopted by the concerned telecom authorities and stakeholders.

In line with India’s ambitious mission to equip its citizens with seamless Internet connectivity, SugarBox as an organization, advocates for a regulation-free CDN industry that would facilitate entry of smaller, local CDN operators. This would help lower  the barriers of entry in an otherwise highly capital-intensive sector. The sector is known to be dominated by a few large, deep-pocketed multinational corporations wielding immense market power. To ensure long-term viability, the CDN industry requires active policy support in the form of regulation-neutral regimes. This will help  to continue market proliferation and provide superior user experience in line with evolving consumer demands.

(Read more about our response to TRAI’s Consultation Paper here)

While overarching licensing and regulatory obligations governing the broadband Internet access industry have been institutionalised across the globe, CDN operators have been kept outside the purview of such regulations in the USA. The understanding being CDNs reduce network congestion and save expensive bandwidth costs, thus democratising delivery of Internet-based digital services to end-users.

The EU has kept CDN services outside the ambit of Net Neutrality regulations after due consideration that CDNs do not operate a licensed resource such as wireless spectrum or possess the market power to preferentially slow down specific Internet applications. On the contrary, CDNs facilitate efficient delivery of Internet content, thus making the applicability of open-access related regulations structurally irrelevant.

Considering steep operational expenses like egress charges and often prohibitive levels of initial capital expenditure, both USA and EU have kept the CDN industry free of any registration or licensing framework to minimise financial burden. Over and above supporting a similar license-free regime, the Government of India can also explore initiatives such as providing subsidised access to digital infrastructure assets (like BharatNet’s OFC network) and extension of necessary funding support (inclusion under MSME credit guarantee schemes) along with     taxation support (such as tax holidays/ concessions) to the CDN industry.

Finally, there is also a strong business case to incentivise private investments in the CDN industry to address inherent challenges such as the need for specialised knowhow and related network hardware/ equipment; this would go a long way in supporting business feasibility and facilitating decentralisation of CDN services into regional and rural hinterlands of India.

Images designed by Freepik

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