The Great Unbundling of WiFi

India’s reliance on mobile data has exposed educational disparities during lockdown, with many students unable to access online learning. The newly approved Prime Minister Wi-Fi Access Network Interface (PM-WANI) aims to radically alter data services by unbundling components, encouraging entrepreneurial opportunities, and potentially improving accessibility and quality of internet connectivity.

This article was first published in The Mint. You can read the original at this link.

In many ways it is students who have suffered the most over the lockdown.

Once schools shut, education moved entirely online and only those children fortunate enough to have access to broadband internet have managed to keep up with their studies. Everyone else, thanks to the sub-optimal state of network connectivity in the country, has struggled to keep up, attending class with their video turned off, forced to use the tiny screen of a mobile device to see what the teach is presenting. Many have simply given up - left with no option but to forsake a year of education since they had no other way in which to connect.

The Problem with Mobile Data

We pride ourselves in the progress we have made in telecom and data connectivity. Within my own lifetime I have seen telephones evolve from a luxury that only very few lucky souls had to a necessity that is central to every aspect of our lives. But for the most part the progress we pride ourselves on having made relate to the quantity of users we have added - not the quality of their experience.

In most developed countries, the majority of data is consumed over Wi-Fi access points. In India, things are slightly different—well over 90% of users access the internet through mobile devices. This is why even though the number of Indian data users has grown, patterns of data consumption remain asynchronous. Users switch on data services when they want to download content, and switch it off soon after, so that they can consume it offline without worrying about running up high data charges.

For the most part, this mobile-first approach was forced on us by last-mile constraints. The congestion of our cities and the often-insurmountable effort of getting all the rights-of-way necessary to lay cables in all the nooks and crannies of our cities was a challenge to great for even for our dauntless telecom companies to surmount. And so, India’s data revolution took place on the back of its mobile network. Once telecom companies had set up an interlocking grid of radio towers to blanket the nation with voice coverage, they were able to neatly dodge the last-mile problem by providing data connectivity over 4G.

Over time we became accustomed to using mobile data and even enjoyed the lowest mobile data charges anywhere in the world due to the disproportionate demand for it. However, the lockdown exposed the problems inherent in an over-reliance on mobile data and made it clear that we need to supplement our mobile data networks with reliable terrestrial broadband that can be delivered through a network of easily accessible Wi-Fi hotspots.

The Need for Radical Change

At present, terrestrial internet connectivity in India (and almost everywhere else in the world) is offered as a fully integrated service. The only way you can get yourself an internet connection is through a licensed telecom service provider that provides last-mile connectivity to your home, installs a router and switches on the web for you. All the components of this service—from the backhaul that connects you to the internet, to your authentication as a valid user on the network, and the invoices raised for the data you consume—are packaged as one single offering provided by a licensed entity.

If we want to re-envision data connectivity, I believe it is important to unbundle the different components of this stack into its component parts. We need to disentangle the various component elements - backhaul, authentication, payments and last mile - and allow market participation in an open an interoperable fashion that encourages entrepreneurship at the edge. This is an approach I have argued for time and again in my writings. In an earlier article discussing the Open Credit Enablement Network (OCEN), I pointed out that:

(t)here is nothing like taking apart an entire ecosystem to help you realise that there are many other ways in which it could be put back together again than even you thought were possible.

This is the approach that helped India disrupt the payments space with its universal payments interface (UPI) that over the last few months has clocked in excess of a billion transactions and which is poised to go global. It is in the process of disrupting location based commerce through the radically unbundled Beckn protocol that will allow location based commerce to proliferate. I even had the temerity to suggest that we might be able to do something like this in the context of the legal design of a platform lending framework. Would it be possible to do something similar with the Wi-Fi data networks?

The Great Unbundling

Last week, the cabinet approved the Prime Minister Wi-Fi Access Network Interface (PM-WANI), a policy that could radically alter the way data services are delivered at the edge of networks. When coupled with the deregulation of Wi-Fi services, I believe this policy will facilitate the rapid proliferation of internet hotspots in India.

PM-WANI unbundles the different layers of this service into its component parts, re-assembling them in an entirely different configuration in order to allow private entrepreneurs to deliver each of these components in a safe and secure manner that does not compromise the regulatory requirement of reliable user authentication.

In the first place, it redesigns the user experience by allowing customers to avail internet services through a new category of app providers. These app providers are responsible for carrying out user KYC (know your customer) processes, as well as allowing authenticated users to discover WANI-enabled hotspots and connect to them in a seamless manner.

The hotspots themselves will be provided by public data office (PDOs)—private establishments such as kirana stores, roadside shops and tea stalls—that will set up public Wi-Fi hotspots within their premises. For readers who can remember India before the mobile revolution, think of PDOs as the data equivalents of public call offices (PCOs) through which we used to make calls when we couldn’t get to a landline. But PM-WANI adds one more layer to the mix—the PDO aggregator (PDOA), an entity that aggregates PDOs and signs them up to a captive portal through which they can be authenticated on the network. It is through this portal that the Wi-Fi services they offer are made available to PM-WANI customers. PDOAs will be integrated with the full range of payment service providers, allowing customers to purchase prepaid packages of their choice in much the same way as they buy any other online service.

The beauty of this system is that every single layer of the architecture, from the app provider to the PDO and PDOA, has been designed to be fully interoperable and connect with every other layer through a set of open specifications. By enabling anyone and everyone to set up Wi-Fi hotspots, PM-WANI will likely unleash a range of entrepreneurial opportunities at the edge of telecom networks. Hopefully, this will incentivise thousands of small businesses to put in place the last mile of data connectivity that big telecom firms have so far been reluctant to rollout.

Regulatory Reform

Critical to the success of PM-WANI is the liberalisation of telecom regulations—in particular, restrictions on the resale of telecom services. Since telecom services can only be provided under a licence from the Indian government, their resale also requires a licence. Historically, it is this regulatory restriction that came in the way of private parties establishing businesses that offered Wi-Fi services to the public. The cost (and effort) of complying with India’s onerous telecom regime is too heavy a burden to impose on small entrepreneurs. If we intend to enable a Cambrian explosion of Wi-Fi hotspots in the country, we will have to lift resale restrictions and allow PDOs, PDOAs and app providers to function with minimal regulatory oversight.

Most importantly, this new regime will have to be exempted from licence fees, as nothing dampens entrepreneurial enthusiasm like the hard reality of adjusted gross revenue-based licence fees.