Tarun Dua

TRAI's original sin has provoked an un-precedent response from Indian ISPs.

Airtel

Under the policy we have defined fair usage levels for unlimited data transfer plans and needless to mention, the usage levels set are very generous such that most customers will not be affected by the Fair Usage Policy.
On reaching the fair usage level, the plan speed would be rationalized by up to 50% for the rest of the monthly billing cycle. You would also be redirected to a page which will inform you that the speeds for the rest of the billing cycle month would be as per the Airtel’s Fair Usage Policy. – source (pdf)

Tata Indicom

Data transfer in excess of Fair Usage Limit as per the applicable tariff plan shall be treated as a violation of TCISL FUP.
Upon such violation of FUP, TCISL shall contact the Customer suggesting for reduction in usage or upgrade to a higher bandwidth plan.
Despite the above, if the customer fails to upgrade to a high speed plan or continue to violate the TCISL FUP, TCISL reserves the right to suspend or terminate the customer’s account immediately without prejudice to other rights available to TCISL under these Terms and Conditions. - source

TRAI has no business to prescribe the contention ratio for ISPs, it is in the business of enforcing Quality of Service issues and providing teeth to SLAs. It should stick to that. By which specific technical measures the ISPs conform to the prescribed Quality norms and SLAs should be left to them. Reducing or increasing contention ratio as a means to improve Quality of Service issues for the end consumers is not TRAI's business.

Its the scarcity mindset at work here, both amongst the regulators and the regulated. The generation of people born with scarcity mentality are trying to manage Internet as if it is your usual finite resource like an electricity or 'gas pipeline connection'.

The Broadband speeds in India are among the lowest in India and also the most expensive.

Mythbusting

( see also ):-

1. National and International Backhaul capacity is finite

There is practically un-limited backhaul capacity at the backbones within the country belonging to Powergrid,Railtel,Reliance, Bharti, Tata Communications and BSNL. Appropriate termination equipment and a way to figure out how to make make 'free market' work in essentially an oligopolistic marketplace can lead to crashing of cost of renting dark fiber for local loops or even national level long distances.

Why is most of National Backhaul capacity unlit in the first place?
The sunk of cost of buried fiber is being recovered at a very slow pace at TRAI mandated maximum chargeable prices from the highest paymasters (many a times the clueless state government bureaucrats in Government of India buying it for SWANs: whoever came up with the pigheaded idea that the SWANs can't run off the public Internet, or cash rich MNCs in a hurry ). The customers thus acquired due to pervasive cluelessness of IT managers amongst large PSU's or 'in a big hurry' cash rich MNCs for renting the dark fiber in extremely small chunks has lead to a situation where prices can't be reduced to expand the marketplace for renting out the national long distance loops without suffering a massive hit on existing revenues generated from the 'suckers' mentioned. The sales guys at the big telcos have amassed sales commissions of crores by selling this dark fiber and are not about to let go of the golden goose without a bit of help from the regulator to spawn a free market. Selling Internet bandwidth to an expanded marketplace on this dark fiber would have recovered its sunk cost faster than small expensively sold chunks of local and national long distance capacity.

International Bandwidth is scarce ?
Between them the Indian Telcos/ISPs own a majority of the 20Tbits or so capacity of International undersea cable systems landing on Indian shores and over 70% of this capacity(by some accounts: reading all the major ISP brochures) is still not being utilized i.e. its dark. It was as high as 90% in 2005.

2. Local Loop is stressed: Most DSL connections from major ISPs are capable of doing 8Mbps down and about 4Mbps up but the actual plans of most consumers with un-limited connections are nowhere near that. Infact the ISPs plan to run IPTV off this spare local bandwidth.

3. Internet Bandwidth is competitive resource
It makes my heart bleed when someone says that. There is sufficient dark fiber capacity, better connectivity is a function of better peering with International ISPs which is already underway in a big way. One of Indian ISPs is infact a Transit free Network possibly on the way to being a true Tier 1 ISP. Nevertheless the cost of transit for bandwidth paid abroad is an order of times lower than what is being charged to the Indian Corporates and Indian consumers (and now Indian Datacenter Clients) by the ISPs in India. There is hardly a significant correlation between an ISPs performance and availability of International Bandwidth to it. In today's India it is equally important for an ISP to be connected to Indian Datacenters where content and applications targeted to Indian customers are being increasing hosted. Indian broadband consumers are increasingly hooking up to office VPNs, sharing work related files over e-mail to other consumers all happening within in India not consuming any 'expensive' International bandwidth.

4. IPTV is equal to Internet TV:
Here comes the Net Neutrality argument. As many Indian ISPs are rolling out their own IPTV delivery mechanisms that would only run on the local loops they would do well to realize that they could have 2x or 3x the number of subscribers if they were all not so mean and evil. Imagine if most DSL's at 8/4 Mbps capacity were available for Internet Bandwidth as opposed to the current 128-512Kbps then the more competitive plans would have eaten away the less efficient telco's marketplace and consumers would have had real choice. Also truly digital video content companies like Mypopkorn.com, Nautanki.TV are being crushed by non-compliance with basic net-neutrality principles by the Indian ISP ecosystem.

5. There is no price discrimination against pure-play Bandwidth sellers
The myth of fairplay is accentuated by the business as usual attitude of pure-play bandwidth providers ( who own no physical infrastructure in India ). Large ISPs who are selling bandwidth have the ability to undercut the pricing of pureplay bandwidth providers by charging themselves less for the local loop ( dark fiber/metro ethernet rentals) to their points of presence. The temporary advantage thus enjoyed by larger ISPs is resulting in longer term harm for the marketplace by raising barriers to entry for more competitive pure-play ISPs who could be more technically savvy to deal with higher contention ratios and intelligent network design without compromising on promised SLAs.

6. TRAI is a benign regulator with best interests of consumers in mind
No, these are a bunch of power hungry bureaucrats, who maybe smart enough to understand the problems that plague the ISP ecosystem in India. But their imaginative solution is to lean on BSNL and MTNL to get a semblance of broadband to users as opposed to regulating and spawning a thriving freemarket.

The usefulness of Internet increases with increased bandwidth at each node and its value is directly proportional to the square of the number of users on it. User generated content (private or public) furthers the usefulness of Internet. The multiplier effects of Internet on the real economy have been mentioned in various governmental studies throughout the world. Why is it that Indian regulation's target is to kill any potential marketplace without letting it evolve by over-regulation and security circus.

7. The NIXI is successful
And what do have as volume of interconnection traffic to show for at Delhi and Mumbai NIXIs is mere 1Gbps and 3Gbps respectively compared to the International Bandwidth capacities of a Terabit or above available at larger ISPs. The NIXIs in other cities don't even figure. Typical local loop capacity in India costs roughly about 1/10th the cost of bandwidth, this resource is however being hobbled due to shortsightedness of Rs. 50/GB settlement that larger ISPs have been able to extract from NIXI by armtwisting it.

Do I blame the ISPs.
I don't really blame the ISPs for what is actually a system of incentives/disincentives to which they are responding to.
3 times: Its not your fault. Its not your fault. Its not your fault.

Its the regulation Stupid. Its the system we need to change here. It is the regulator's fault to lean on BSNL/MTNL for trying to achieve broadband goals for the nation set in 2007 ( the year of broadband) instead of trusting a well regulated distortion free price competitive and thriving free market to do the job.