Net Neutrality. Mere mention of the term can conjure images of brave men and women revolting against their oppressors, those of intense battles, cries of the triumphant standing over the fallen and of Indian flags rising above a dark battlefield. Wait what? We need to tone it down a bit, don’t we?

These two little worlds can rile up the netizens to take up arms and send over 1000000 responses to Telecom Regulatory Authority of India (TRAI) for a cause that not many still fully comprehend. Why does Net Neutrality invoke such intense reactions?

Net Neutrality is all about equality and non-discrimination, perhaps Internet is the only place where those two words still have any meaning. Net Neutrality principle states that all data on the internet is treated as equal regardless of its source. That data can be in any shape, size or format. Internet Service Providers (ISPs) have no right to interfere, discriminate or pull any favours for the said data for their own gain. In the end Internet is like a level playing field where a large retailer like Flipkart and a small retailer like HappilyUnmarried theoretically can have the same exposure.

Net Neutrality empowers users with freedom of choice. They can access what they want, when they want without any interference. If it wasn’t for Net Neutrality our ISPs would have started discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, or mode of communication. Unfortunately Greed, Gluttony and Envy have reared their ugly heads. ISPs now want to interfere and discriminate for the sole purpose of making a profit. Our very right to choose is under threat.

Maybe that is the reason why the net neutrality debates invoke such strong emotions, but do we truly understand it? Its origins, its emergence and its prominence. Are Telecom companies really the Big Bad Wolves that we make out them to be? Does Net Neutrality really work in favour of the consumers? Let’s find out.

Net-Neutrality

Origins

The Indian public got their first taste of the Internet in 1995 when Videsh Sanchar Nigam Limited (VSNL) formally launched the Internet for the masses. Initially Internet was for the elite few, with Internet charges as high as 10 lakhs for the maximum speed of 128 kbps for non-commercial use. From its humble beginnings, Internet has grown tenfold with more than 300 Million subscribed users in the present day. India still has a long way to go with only about 18% of the entire population exposed to the internet as of 2014.

The concept of Net Neutrality has been present since the dawn of internet but the term was coined by Columbia University Media Law professor Tim Wu in 2003. In India most ISPs are Telecom companies which were already providing Voice call facilities through fixed land devices or Mobile devices. Consumers using these devices had the freedom of choice to call who they want, when then want and what they talked about without any interference by these telecom companies. The telecom companies transmitted the same non-interference rule for the internet, essentially forming the basis of Net Neutrality in India. Since the start most ISPs adopted the Net Neutrality principle. They treated all data on the internet as equal. Unfortunately in India there are no laws enforcing Net Neutrality. Although TRAI’s Unified Access Service agreement clearly states and promotes Net Neutrality, it however doesn’t enforce it.

Over the years we have seen many instances of blatant violations of Net Neutrality principles. For example in 2012 Reliance announced free usage of Facebook and WhatsApp at rupees 16 per month, without any extra data costs. In 2013 Aircel partnered with Wikipedia to grant free access to Wikipedia over Aircel’s mobile networks. These instances destroyed Net Neutrality. Why are certain services and apps free while others are chargeable? These instances became the pillars on which the origins of the Net Neutrality debate were formed.

In a country which promotes disparity, where rich are becoming richer the poor are becoming poorer it stands to reason Internet will follow suit. Only the powerful will survive and new and the innovative will never see the light of the day. There is a risk that established popular services, sites and content can monopolise the internet, shutting down new and innovative services, sites and content. For instance online retailers like Flipkart and Amazon could hypothetically tie up with several ISPs and assure non stop high speed connection to their sites, while new innovative and competitive sites like Uread and Shimply suffer due to low speed internet. So slow that it renders them useless and effectively making Flipkart and Amazon the only options available to final user.

Emergence

In India internet is growing at a substantial rate. Internet is everywhere and is powering the way we live our lives. Internet has connected the world in ways which were not possible 20 years ago. Today, your distant uncle’s family in California or those Jimmy Choo Shoes are just clicks away. We live in a world of e-commerce, e-business and social media. Every day is new opportunity. Everyday new data is created and Internet graciously treats it as equal.

Net Neutrality debate came into limelight when Telecom companies realised that some of these new data on the internet had to capacity to compete with their main voice and text business. Fearing losses the telecom companies started fierce lobbying in an attempt to regulate or ban such data. The villains for Telecom companies were Internet Companies like Skype and WhatsApp which provide Voice or Text over Internet Protocol (VoIP, ToIP) services. These services are classified under Over the Top (OTT) services. OTT Services are any services that are provided over the internet rather than via a service provider’s own dedicated network. Essentially all services on the internet can be classified as OTT. YouTube, Netflix, Google, Facebook, Twitter, Viber, WeChat, Etc. all can be classified as OTT services.

In the last decade OTT Services like WhatsApp, Viber, Line, WeChat, Kik, Skype and Hike have slowly replaced Text Messaging (SMS). Many of these OTT services now provide Voice services (VoIP). There is genuine threat of cannibalisation and thus many Telecom companies feel that these OTT services which provide Voice or Message services need to be regulated. They lack the proper license to offer those services and they also don’t invest in infrastructure to develop a network. Furthermore these OTT service don’t have to pay usage charges, licence fees, service tax to the government. Telecom companies feel they should pay a fee to the network they are using to provide their services. Things got heated up when Airtel decided to charge extra for VoIP facilities but had to back off after public outrage.

A report from Credit Suisse echoed the telecom sentiments and stated in the long run voice calling and messaging services by OTT could hurt voice revenues of telecom companies by as much as 50%. Cellular Operators Association of India (COAI) further stated that telecom companies have already lost 30% in the messaging revenues. In countries like US, UK, Australia and China Internet data packages are the main source of income and Voice and Text services are just bundled with those packages. However in India, Voice is still the main source of income and as much as 80% of revenues come from voice.

In the end it all comes down to greed. Today, Telecom companies want to regulate or charge for VoIP and ToIP services. Tomorrow, they would want to regulate or charge for the usage of mail services or social eco-systems. Airtel, could claim that YouTube Music streaming services are directly eating into their revenue drawn out of their in house music app called Wynk. Airtel could seek to charge or ban music streaming services. Who would stop these telecom companies? Where will be the line drawn?

Prominence

The Net Neutrality debate came into prominence when Airtel announced a new platform called Airtel Zero. The platform allowed users to access apps of participating developers absolutely free without any data charges. Then who pays for the data charges? How does Airtel make its money? After all Airtel is not in the business of charity.

The participating developers pay for the data charges as long as users use their apps. Now this may be easy for big retailers like Flipkart but how about small retailers like Pepperfry, Caratlane, Fabmart, Landmark, Overcart, NoNasties, RedWolf or HeadBangersOnline?

Another sore point in the Net Neutrality debate is Facebook’s Internet.org. Internet.org is the brainchild of Mark Zuckerberg. According to him connectivity is for everyone and internet.org is his way to connect people who had no access to internet. In essence the platform is similar to Airtel Zero. It gives free access to Facebook and 30 odd partnering websites. It is very easy to see that Mark Zuckerberg’s dream is not one of connectivity but one of world domination. Through Internet.org Facebook can acquire more and more users across 8 countries where the service has been launched. If the goal is free internet for everyone then why only Reliance users can access it? Facebook partnered with Reliance Communications to launch the app in India. The other problem is that Facebook acts as gatekeepers for Internet.org. They decide which sites and services can be added to this platform and its stands to reason any competing sites to Facebook’s agenda will not be allowed to enter the platform.

These platforms are known as Zero Rating Plans. Zero rating is also popularly known as Sponsored data where user’s data cost is covered by the site he is visiting. Effectively internet becomes free for the final end user

Reality Check: There are no free lunches.

For the final user it may feel like there is no cost attached but in the long run the cost is freedom of choice. Users will have access to apps that are part of such platforms. furthermore, Companies participating in such platforms are not in the business of making losses. The exuberant amount they pay as data charges are in the end borne by users themselves. These handful of sites act as thugs waiting for you to log on to their websites and then they raise prices of their services/products.

It’s like Vijay Sales providing you with free transportation to visit one of their stores and browse its products. Now that you are in Vijay Sales, they will increase the price of their entire electronic product range to cover the cost of your transportation. Basically if you buy any product from Vijay sales its price will include your transportation cost.

Ultimately all data cost is borne by the final user. In addition such Zero Rating plans are against the spirit of Net Neutrality. All data is equal so why should some be free and for others you need to pay?

Is Net Neutrality Really Consumer Friendly?

For the time being India has upheld the Net Neutrality laws but India’s underlying mission is to enable cheap and quality Internet access to the maximum number of Indians. Does net neutrality really help in achieving such goals?

The new ruling could theoretically trigger a domino effect which will end in consumers paying a lot more to access internet. For instance if OTT services like WhatsApp are not to be regulated or licensed. Furthermore if Telecom companies are prohibited to charge extra or throttle OTT services. Telecom companies, then will be left with little option, either to suffer revenue losses due to OTT services or pass those losses on to the final consumer by increasing the cost of data plans. These in turn will make internet expensive and curb internet penetration in India. Consumers who are paying Rs. 1000 for unlimited internet data will now be charged Rs. 1500 for the same pack.

On the other hand, if Facebook Basics or any such zero rated plans were allowed in India. Internet could become far more cheaper. For example – In India most consumer spend ridiculous amount of time on Facebook. Many spend majority of their data on popular sites like Facebook, Flipkart and WhatsApp. Assume a user subscribed to Reliance 10GB data plan spends 60% of his data plan on Facebook. Now with help of Facebook Basics he gets access to Facebook absolutely free and in effect he saves 60% of his 10GB data plan. He now has a choice to either continue the 500 rupees 10 GB data plan and surf new and more interesting content, sites and apps on the internet or subscribe to new 5 GB plan for just 250 Rupees. Basically it saves him money or exposes him to more new and innovative content on the internet.

Let’s take this a step further, assume Net Neutrality is abolished in India. This will allow consumers to choose the services they want to access and how much they are willing to pay for it. Simply it allows customization and a stable more optimized internet. For example VoIP requires a lot of bandwidth and it increases congestion and that is why most of these services are not reliable but if Telecom companies are allowed to charge for them it would essentially put these services on the fast lane and reduce congestion on the network. This assures an optimized network and internet.

In the end, the million dollar question is – Can Net Neutrality be the best way forward for India? You be the judge of that.

For me – India for the moment needs a combination of Net Neutrality and Tiered Network Access. We need to be the next digital superpower before we can fully enforce Net Neutrality.

Next few years are crucial for India and policy makers and decision takers need to make sure all parties are protected equally. Telecom companies can’t survive or invest in new infrastructure without making a profit. 50% of India’s population is still below the poverty line and only 18% of the population is exposed to the internet, expensive internet data plans will not help internet’s penetration in India. Interfering with OTT services may hamper innovation. TRAI are in a tough spot and no wonder they are seeking public opinion for formulating new regulations and laws. We need to do our bit, we need to stay partial and understand the Indian Internet scenario. Moreover we need to make sure we don’t get carried away by the media’s attention to net neutrality. In the end it’s not about Net Neutrality but about cheap and reliable internet for everyone.

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