Internet and E-Commerce Issues

1. Infrastructural Problems:

Internet is the backbone of e-commerce. Unfortunately, internet penetration in India is

so far dismally low at 0.5 per cent of the population against 50 per cent in Singapore.
Similarly, penetration of personal computer (PC) in India is as low as 3.5 per thousand
of population compared to 6 per thousand in China and 500 per thousand in US.
Internet is still accessible through PCs with the help of telephone lines.

Given the penetration of telephone only 2.1 per cent of population, e-commerce remains
far away from the common man. It is difficult for e-commerce to reach to 1,000 million
population spread over 37 million households in 6, 04,374 odd villages and 5,000 towns
and cities. Besides, both cost of PCs and internet access in India are quite high.

2. Absence of Cyber Laws:

Other big challenge associated with e-commerce market is the near absence of cyber
laws to regulate transactions on the Net. WTO is expected to enact cyber laws soon.
The India’s Information Technology (IT) Bill passed by the Indian Parliament on May 17,
2000 intends to tackle legislatively the growing areas in e-commerce.

The Bill also intends to facilitate e-commerce by removing legal uncertainties created by
the new technology. As it stand today, the Bill deals with only commercial and criminal
areas of law. However, it does not take care of issues such as individual property rights,
content regulation to privacy and data protection specific legislation.

3. Privacy and Security Concern:

As of to-day, quite vulnerable issues related to e-commerce are privacy and security. So
far, there is no protection offered either by Website or outside watchdogs against
hazard created by exploiting one’s privacy.

4. Payment and Tax Related Issues:

Issues related to payment and tax is yet another problem continuously hinting e-traders.
The electronic payment is made through credit card or plastic money which could,
however, not become popular so far in India mainly due to two reasons. First, the
penetration of credit card in India is very low (2 per cent of the population).

Second, the Indian customers are quite skeptical of paying by credit card with the
increasing threat of fraud played by hackers. Like elsewhere, credit card could not gain
growth in India mainly because of authentification and recognition problems of
electronic signatures (Dahiya and Singh 2000: 70).

Similarly, tax administration is yet another complex problem in this seamless worldwide
e-commerce. As establishing incidence of tax in case of e-commerce transactions
becomes difficult, this, thus, provides ample scope for tax evasion. How to get rid of
this? Some suggest total tax holiday till 2010 for e-commerce in the country.

There are others who support zero duty on e-commerce to flourish it in the country. It
has already been decided in US that there will be no tax on anything sold on the internet
in digital form. Should India not follow US, at least for the time being? We have to
ponder over it.

5. Digital Illiteracy and Consumer Psyche:

At present, digital illiteracy is one of the formidable problems e-commerce is facing in

India. On the other hand, the continuous exodus of skilled computer engineers to other
countries has denuded India of software engineers. This has posed a real threat to the
Indian IT industry. Obviously, solution to this problem lies in curbing the computer brain
– drain and uses the same in the country.

The Indian consumer is also characterised by his unique psyche. Usually, the Indian
consumer does not go long distances for having any good of his choice when a
neighbourhood store provides him whatever he wants.

That is why the consumer does not browse the Net knowing the consequent hassles of
connectivity and other botherations. Added to this is that building trust on the electronic
media also takes long time more especially when the vendor is situated at a very far off
place.

6. Virus Problem:

That computer virus is also a formidable problem in the execution of e-transactions is

confirmed by the computer virus originated in Manila. A computer virus lagged’ I Love
You’ originated in Manila, Philippines on May 5. 2000 rippling across world, inflected
millions of computer files causing colossal loss of US $7 billion to the governments and
the businesses. The offenders causing ‘virus’ must be awarded deterrent punishment,
otherwise similar assaults in future can cause lasting blows to the quite young e-
commerce in India as well.
Wireless Spectrum Auctions
A spectrum auction is a process whereby a government uses an auction system to sell
the rights (licences) to transmit signals over specific bands of the electromagnetic
spectrum and to assign scarce spectrum resources. Depending on the specific auction
format used, a spectrum auction can last from a single day to several months from the
opening bid to the final winning bid. With a well-designed auction, resources are
allocated efficiently to the parties that value them the most, the government securing
revenue in the process.[1] Spectrum auctions are a step toward market-based spectrum
management and privatization of public airwaves, and are a way for governments to
allocate scarce resources.
In certain cases, the FCC has imposed conditions on specific blocks of spectrum being
auctioned. For example, in the 2007 700 MHz auction, the FCC required the winning
bidder of the C Block to comply with open platform conditions, “allow[ing] customers,
device manufacturers, third-party application developers, and others to use or develop
the devices and applications of their choice, subject to certain conditions.” [22]
The FCC held the 700mhz band spectrum auction on July 19, 2011. The auction,
entitled “auction 92” featured 16 licenses which were left over from auction 73, as either
unsold or not paid for. [23] Licenses available were from block A and B of the spectrum
and included:
Block Frequency (MHz)
A 698-704 & 728-734
B 704-710 & 734-740
In mid 2015, the FCC will start the 600 MHz incentive auction. This spectrum is
“valuable” because of “high quality wireless airwaves which penetrate walls” and work
better over long-distance than higher frequency spectra. The FCC said that a portion
should be reserved for smaller carriers. [24] AT&T and Verizon control the majority of the
high quality spectrum less than 1 Gigahertz, while Sprint and T Mobile hold much less.
Bidding structure
As outlined by the FCC, the bidding structure consists of five rules and regulations.
[
citation needed]
SIMULTANEOUS MULTIPLE-ROUND AUCTION

Every license is up for bidding at the same time. Participants may bid on multiple
licenses at once. All licenses will continue to be for sale until there are none left or there
are no buyers.[citation needed]
ANONYMOUS BIDDING

The amount of information available about the participants in the auctions is limited until
the auction is officially over. This means that the amount of money a company has bid
(or withdrawn) on a license will not be available to the public until the auction is closed.
The names of the companies participating and what licenses they were going for when
they filled out their applications is also protected. [citation needed] This rule also states
that bidders are not allowed to cooperate with one another, or share bidding strategies,
or have discussions on bids and what they would do with them in the market.
BIDDING ROUNDS

Auction bidding will run in a sequence with the schedule for the sequences being given
out before the auction starts. This year’s spectrum auction will be conducted over the
internet and over the telephone. Qualified bidders will receive access to the toll free
number for the bidding hotline.[citation needed]
STOPPING RULE

This rule was enacted to end the bidding at a reasonable time. The bidding in the
auction will stop when bidding closes on the licenses available which means that if no
one challenges or submits a bid, the auction will be stopped. Also, in the first round, if
participants don’t make a bid, the auction will be closed. [citation needed]
AUCTION DELAY, SUSPENSION AND CANCELLATION

The FCC reserves the right to cancel, delay or suspend the auction in case of technical
difficulties, weather, security breaches and unlawful bidding activity. This is another
method to maintain media ownerships would serve at its best in the public interest.
[
citation needed]
VOLUNTARY SURRENDER OF LICENSES

In order to prevent network congestion, FCC chairman Julius Genachowski is looking

for companies who will voluntarily surrender their unused spectrum in exchange for a
share of the money made from the spectrum auction [25] With the growing demands for
wireless services, the Obama Administration approved a plan, called the National
Broadband Plan of making 500 MHz of spectrum, below 3 GHz, available over the next
10 years. The majority of the spectrum being examined by the FCC and NTIA are
federally owned or federally shared bands. In addition, regulators and carriers have
been considering blocks of the 300 MHz spectrum which is normally used for television
broadcasters.[26] If a company agrees to volunteer their spectrum, the FCC will ask for
120 MHz of it. Also, the FCC has been thinking about spectrum sharing which would
allow wireless ISPs to purchase DTV licenses.
Wireless Standards
802.11

In 1997, the Institute of Electrical and Electronics Engineers (IEEE) created the first
WLAN standard. They called it 802.11 after the name of the group formed to oversee its
development. Unfortunately, 802.11 only supported a maximum network bandwidth of 2
Mbps – too slow for most applications. For this reason, ordinary 802.11 wireless
products are no longer manufactured.
802.11b

IEEE expanded on the original 802.11 standard in July 1999, creating

the 802.11bspecification. 802.11b supports bandwidth up to 11 Mbps, comparable to
traditional Ethernet.
 Pros of 802.11b – Lowest cost; signal range is good and
not easily obstructed
  Cons of 802.11b – Slowest maximum speed; home
appliances may interfere on the unregulated frequency band
802.11a

While 802.11b was in development, IEEE created a second extension to the original
802.11 standard called 802.11a.
 Pros of 802.11a – Fast maximum speed; regulated
frequencies prevent signal interference from other devices.
 Cons of 802.11a – Highest cost; shorter range signal that is
more easily obstructed.
802.11g

In 2002 and 2003, WLAN products supporting a newer standard

called 802.11gemerged on the market. 802.11g attempts to combine the best of both
802.11a and 802.11b.
 Pros of 802.11g – Fast maximum speed; signal range is
good and not easily obstructed.
 Cons of 802.11g – Costs more than 802.11b; appliances
may interfere on the unregulated signal frequency.
802.11n

802.11n (also sometimes known as “Wireless N”) was designed to improve on 802.11g

in the amount of bandwidth supported by utilizing multiple wireless signals and
antennas (called MIMO technology) instead of one. Industry standards groups ratified
802.11n in 2009 with specifications providing for up to 300 Mbps of network bandwidth.
802.11n also offers somewhat better range over earlier Wi-Fi standards due to its
increased signal intensity, and it is backward-compatible with 802.11b/g gear.
 Pros of 802.11n – Fastest maximum speed and best signal
range; more resistant to signal interference from outside
sources.
 Cons of 802.11n – Standard is not yet finalized; costs more
than 802.11g; the use of multiple signals may greatly
interfere with nearby 802.11b/g based networks.
802.11ac

The newest generation of Wi-Fi signaling in popular use, 802.11ac utilizes dual-band
wireless technology, supporting simultaneous connections on both the 2.4 GHz and 5
GHz Wi-Fi bands. 802.11ac offers backward compatibility to 802.11b/g/n and bandwidth
rated up to 1300 Mbps on the 5 GHz band plus up to 450 Mbps on 2.4 GHz.