Regulatory Framework for Promoting Data Economy


    In News

    • Recently, the Telecom Regulatory Authority of India (TRAI) released its recommendations on ‘Regulatory Framework for Promoting Data Economy Through Establishment of Data Centres (DCs), Content Delivery Networks (CDNs), and Interconnect Exchanges (IXPs) in India’.


    • National Digital Communications Policy (NDCP) 2018 envisages “Evolving enabling regulatory frameworks and incentives for promoting the establishment of International Data Centres, Content Delivery Networks, and Independent Interconnect exchanges in India”.
    • Accordingly, the Authority suo-moto issued a detailed Consultation Paper (CP) on the subject.

    Salient features of the Recommendations

    • Data Centres: 
      • Authority has recommended bringing out the Data Centre Incentivization Scheme (DCIS) for establishing Data Centres (DCs) and Data Centre Parks (Dc Parks). DCIS to have two list of incentives –
        • Certain Centre specific fiscal and non-fiscal incentives can be rolled out by the Central Government.
        • The other in the form of a guideline to the States; leaving flexibility to States to announce fiscal incentives through their policies.
      • Operationalizing a Data Centre specific portal on National Single Window System (NSWS) for –
        • Time-bound single window clearances with provision for deemed approval after elapse of prescribed timelines for non-critical category permissions
        • Mandatory online registration of new DCs/DC Park operators without any obligation or registration fees. This will be purely for statistical and record purposes.
        • Issue of notifications, announcement of schemes & benefits, facility to interact and respond to queries of potential investors, and grievance redressal of existing and prospective DC/DC Park operators.
    • A national level DC Readiness Index (DCRI) framework to be implemented by the Central Government to rank Indian states as per their suitability to promote the DC sector. An indicative list of parameters and their weightages for ranking the States has been suggested.
    • Establish DC Economic Zones (DCEZs) – Out of suggested list of 33 SEZs which are located in areas with abandon power and water, one SEZ can be identified each in State of Andhra Pradesh, Kerala, Karnataka, Maharashtra, Haryana, UP, MP, Gujarat, Rajasthan, and Odisha, for either converting them into DCEZs or for carving out zones out of these SEZs for establishing DCs/DC parks.
    • Promoting Green DCs:
      • Indian Green Building Council (IGBC) along with Telecommunication Engineering Centre (TEC) should be entrusted with the task of framing certification standards of green DCs in India.
      • Government should form a scheme to invite Requests for Proposal (RFP) on an experimental basis for new technology/methods/processes that can be adopted for promoting green DCs.
    • Capacity Building:
      • National Telecom Institute for Policy Research & Training (NTIPRIT) under Department of Telecommunication (DoT), MeitY, All India Council for technical Education (AICTE) and Telecom Sector Skill Council (TSSC) should closely collaborate with DC industry to develop tailor-made short and long-term courses.
    • Content Delivery Networks (CDNs)
      • CDNs play an important role in the value chain of content delivery ecosystem. 
      • The internet traffic, which was earlier being delivered by ISPs alone, is now being delivered by ISP and CDN combined. 
      • ISPs perform load balancing, traffic engineering and offers guaranteed quality of service to end users. 
      • CDN Players also leverage various techniques like load balancing, caching, optimization, use of security protocols, etc. for ensuring better delivery of content to end users in association with TSPs. 
      • CDN players are major contributors to the network traffic and can affect the overall quality of service. 
      • Accordingly, TRAI, in its consultation process, had discussed various CDN-ISP interconnection and collaboration related policy and regulatory concerns.
        • To address these issues, TRAI has recommended that CDN players should be registered with DoT through a simple online registration process. The suggestive draft for guidelines for registration of CDN players along with registration form and registration certificate has been recommended with a one time registration fee of Rs 10,000.
        • The incentives recommended for DCs should also help in proliferation of CDNs in the country and this would in turn provide a boost to the digital infrastructure ecosystem, including CDNs and IXPs.
    • Interconnect Exchanges Providers (IXPs):
      • Currently, IXPs are required to obtain Internet Service Providers (ISPs) license which has several onerous licensing conditions related to subscriber verification, security etc which are not relevant to them. 
      • This creates artificial entry barriers. 
      • To address this issue and promote setting up of more IXPs, especially in Tier-II and Tier-III cities, TRAI has recommended that a separate authorization in Unified License may be created for IXPs with terms and conditions that are much less onerous than ISP license authorization.

    Addressing Demand Side Issues of Digital Data Infrastructure

    • Data digitization, sharing and monetization – A statutory body Data Digitization and Monetization Council (DDMC) for steering the data digitization drive be prescribed at the Centre,
    • Data Ownership – Government should put in place a data sharing and consent management framework on lines of DEPA framework to provide telecom subscribers consent based option to share their KYC data with recipient TSP when they port their numbers.
    • Data Ethics – DDMC should also be entrusted with the responsibility of putting in place an overarching framework for ethical use of data both by Government as well as by corporate in India. The framework should address the generic as well as vertical sector specific requirements.

    Data Economy

    • The data economy is the global digital ecosystem in which the producers and consumers of data—businesses and individuals—and government and municipal agencies gather, organize, and share accumulated data from a wide variety of sources. 
    • By connecting unconnected data across industry boundaries, organizations can glean richer business insights, tap into unexplored markets, serve citizens and consumers alike with data-driven products and services, and monetize their data by sharing it externally with key customers and suppliers. 
    • Benefits:
      • More than half (53%) of business leaders say that participating in the data economy has led them to create new business models.
      • Another benefit of the data economy is faster innovation. Traditional companies are facing unprecedented pressure from their digitally native counterparts to innovate and respond quickly to evolving customer preferences and market trends.
      • Participating in a data economy can improve rates of customer acquisition and retention—gaining new customers and retaining current ones—while 42% of respondents cite increased revenue as an important business benefit. 

    Way Ahead

    • The Central Government should prepare guidelines listing out the incentives for the Data Centres and DC Parks for the states that have scanty DC footprints, in line with other advanced states. 
    • Bureau of Indian Standards (BIS) should be entrusted for developing different India-specific building standards for construction of DCs and to develop India specific standard-based certification framework for the DCs.

    Source: PIB