At the heart of it is the controversy surrounding net neutrality is the TRAI’s Consultation Paper on Regulatory Framework for OTT services.
By Rajat Gandhi
The internet as we know it is facing existential issues in India. It may seem as a doomsday prophecy and far fetched, but recent events by major telecom operators to change the nature of the Internet in the country is a testament to the fact. At the heart of it is the controversy surrounding net neutrality is the Telecom Regulatory Authority of India’s (TRAI) Consultation Paper on Regulatory Framework for Over-the-top (OTT) services.
The long and one sided consultation paper that has confusing statements gives examples of OTTs as Skype, Viber, WhatsApp, Chat On, Snapchat, Instagram, Kik, Google Talk, Hike, Line, WeChat, Tango, ecommerce sites (Amazon, Flipkart etc.),Ola, Facebook messenger, Black Berry Messenger, iMessage, online video games and movies (Netflix, Pandora). The consultative paper now seeks comments on whether telecom operators like Airtel, Vodafone, Idea etc can slow down some sites/apps and make some faster (traffic shaping). It also wants to know if operators should be allowed to make some sites/apps/types of services more expensive and at the same time make some sites/apps/types of services cheaper (differential pricing).
So what is net neutrality? Coined by American academic Tim Wu in the year 2003, he said the Internet inherently does not favor one application over others. Taking it forward the operator (telecom providers in this case) that provides the network cannot dictate what data would flow through the system. It has to be fair and equitable for all and broadband providers should treat all Internet traffic the same.
Wu says net neutrality is important because “communications network like the Internet can be seen as a platform for a competition among application developers. Email, the web, and streaming applications are in a battle for the attention and interest of end-users. It is therefore important that the platform be neutral to ensure the competition remains meritocratic.”
The problem today:
Used to extraordinary profits from phone calls and SMS, telecom operators in the country are today a worried lot. Applications like Watsapp and Viber have eaten into their profits as calling and texting can now be done for free. Operators add that huge amounts of data running on their system is putting pressure on their system and that negligible returns from such data will impede the growth of the sector. Telecom operators like – Airtel, Vodafone, and others have now decided to charge for apps and services that run on their network. The charge can be levied on the customer for the data he or she consumed or on app developers and web services providers. Airtel has slowly gone on to do just that by launching Airtel Zero, where an app developer or web services provider has to pay the company to make his service available for free to the consumers. This comes after its failed attempts to have differential pricing for VoIP services met with stiff resistance and backlash.
Why this is an issue:
Internet was born on the basic premise that it is free for all and can be used by one as they please. Network providers and telecom operators are only a means to it, for which we pay them for their services. Paying in this case is to access the internet and what a consumer does after he has paid for the access cannot be dictated by a telecom provider. The TRAI consultation paper aims to do just that. In a nutshell operators want us to pay to access the internet and then dictate what we should see and what we should not. Operators, who for years, have provided shoddy internet speeds and call services cannot blame their declining profits on OTTs. They should in fact focus on increasing Internet penetration, which in turn will lead to greater data consumption and greater revenues.
For example, once you have paid your water bills, your water supplier has no business dictating what you do with the water. You can make tea, coffee, wash clothes or choose to water your plant. It would be inane for your supplier to order what you do with the water, he supplies and how you use it.
To simplify even further, let us take another example. If you are in the manufacturing business and want to set up a factory for it, you would approach your electricity provider for the necessary supply. You then pay for the electricity you consume and carry on with your business. Now imagine a scenario where the electricity provider says I will charge you extra if you manufacture copper items and charge you less if you manufacture aluminum items. You would say this is unfair, arbitrary and unjustified. The same is about to happen to the internet, where telecom operators want to dictate what is available to the consumers by means of differentiated pricing.
Trouble for startups:
This move is also akin to what we can call a protection scheme, where the operator says if you do not pay us we would either block you, make access to you slower or charge your customer instead.
TRAI’s consultation paper is worrying because it can stifle competition. A startup that can have a stellar product may find it very difficult merely because consumers have to pay to the telecom operator to access the service. On the other hand an established company with deep pockets can tie-up with the telecom operator by paying the requisite fee and making the service available to customers for free. This will clearly change the playing field and can do a lot of damage to innovation and startup ecosystem in the country. Startups in this country have the most to lose because in all likelihood they will not be able to pay the operators and are likely to end up in the slow lanes of the Internet.
In any case, why should a telecom operator decide what we get to see and what we do not? Wu says “Internet Darwinians argue that their innovation theory is embodied in the “end-to-end” design argument, which in essence suggests that networks should be neutral as among applications.”
He goes on to quote network theorist Jerome Saltzer’s, “The End-to-End” argument that states that ‘don’t force any service, feature, or restriction on the customer; his application knows best what features it needs, and whether or not to provide those features itself.”
Wu adds that the Internet Protocol suite (IP) was designed to follow the end-to-end principle, and is famously indifferent both to the physical communications medium “below” it, and the applications running. If the TRAI consultative paper is adopted, this “indifference” will cease to exist where an operator decides what applications run on the network they provide and what can be shut out. The Internet is one place where everyone is treated equally, but it seems a handful of wealthy companies can now dominate the market.
(The writer is Founder, CEO of peer to peer lending marketplace, Faircent.com.)