What if Net Neutrality Opponents are right?

Pratima H

INDIA: Voltaire said something that sounds very profound on a normal day, but somehow when everyone is evangelizing the cause of Net Neutrality, the lines vanish in a fog of passion and the trumpeting march for democracy.

“I do not agree with what you have to say, but I'll defend to the death your right to say it!”

Have we paused and given any room for that dimension of democracy while we were caught up in this all-righteous crusade of Net Neutrality?

After all, how fair would be a debate if voices from the other side are dampened with not logic or rationale but just sentiments and rhetoric, as they might tag it?

So, just for a minute, let’s consider what may make the notion of charging more for a better Internet or a faster Internet to someone in particular, really tick for a player or even a customer?

Arguing FOR Net Neutrality

What if providers have a business model backing their idea of blocking some traffic but not at the cost of harming anyone? What if they can ensure faster delivery and charge the dough from companies which have pockets lined well for this sort of expense – the big names of the Technology industry? What is this so-claimed Internet fast lane makes matters easy and life more fast-streaming and less-buffering for end users? What if these players have all the reason to charge more because these poor souls have paid through their nose in investing in that exact kind of robust infrastructure to take speed to another level? What if giving customers the convenience of 3G or 4G means that someone eventually will have to pay for fatter, better pipes?

After all some vocal carriers have been claiming this in US and other regions quite audibly that they put in money and time to build up the infrastructure to support high data speeds for a futuristic customer and that makes them prone to charging customers or someone else in the chain a tad more.

When the first footprint of Airtel Zero was visible, it was explained as an innovative and open marketing platform that will allow customers to access mobile applications “free of cost”. So can that be a bad proposition for customers?

It was even clarified that such a platform would be “free” for all consumers and open to all marketers (and, open to all – big or small) and was told to have got enquiries from 150 start-ups – with majority being small start-ups – after its launch.

There were happy feedback lines cited like ‘for a change these players will have an “equal opportunity” to run with the big boys’ and how on an average such platforms can reduce their marketing costs by almost three quarters.

Is it wrong when a Telco argues that today, some mobile devices can store 50 or more apps, others can store five and some can't even do so and that pops a big question - Will Net Neutrality imply that all devices must be standardized and offered at the same price to make the net neutral?

The telco also wondered - There are multiple mobile technologies – 2G, 3G, 4G - to access internet. Should all speed and pricing be the same in the garb of Net Neutrality?

Don’t some customers pay cheaper data rates based on volume purchased. Does Net Neutrality imply that everyone must pay the same rate irrespective of usage? What if the player is vouching that this play will also drive innovation in the internet and mobile app space by providing a cost-effective and non-discriminatory platform, in particular, to smaller companies?

To be fair, at least one point that such Telco players make is right – not everyone is still very clear on what Net Neutrality is all about.

There is more rhetoric than reason. So for the sake of reason, or Voltaire, let’s slice the debate with the aid of another knife.

Is Net Neutrality advocacy more than chest-thumping?

We all love taking up the cudgels and there is nothing more inspiring than standing together for the right cause. But even a fair, objective look (whatever degree of it is possible) distills that even if some of us choose to walk apart from the flag-bearing crowd on some holy march, we would still be a lot on this side of the debate.

Here’s how:

Ok, so any player who offers Internet as per a category and promises that this model will drive internet adoption through free usage (and companies and app developers would be an equal partner in the process) needs to listen to this.

More so when carriers lament that they are stuck in an old Catch 22 between scarcity of spectrum and advent of new generations like 4G or 5G without the money to steer on that road smoothly.

Spectrum management experts have long back drilled holes in this vest by saying that what causes the spectrum problems, is not the consumption part but its position, ownership, utilization and optimization. Old protocols have been keeping many robust players from delivering transmission speeds for today’s generation and when the customer is asked to pay more for a 4G data service under the argument that it’s better and new; there are experts who have surmised that it may actually be cheaper for a carrier to offer 4g over 3g services. Most industry biggies are still not clear over the exact definition of 4G.

With the advent of a new generation on telco technology, speeds get faster, but they also turn easier and cheaper and when someone is using LTE or Long Term Evolution, it makes the model all the more cheaper for data part of the game.

Once a big pipe is constructed, you do not make any extra effort or put extra money to push juice inside that pipe, do you? Then why should the customer pay more for what goes inside that pipe every time?

Margins in this industry depend on the spectrum play and how well utilized are these pipes. A nice-laid infrastructure model will allow even those carriers who charge way less than others, to make more money than big boys, and this is based on volumes and pricing options. Price elasticity will come into action at some point but what remains to be dealt with is - would the carrier decide it or would the customer figure it out?

That brings the spotlight back to what Net Neutrality in its quintessential avatar has been up to. The rudimentary idea is that whether it is an Internet provider or a cable operator or a cellular company, they should not filter stuff or manipulate the data traffic that flows over their networks, and jeopardize the rights of customers.

In the US, FCC or Federal Communication Commission started confronting this issue more strongly when a proposal allowed room for "paid prioritization," wherein a broadband provider could charge more for companies to deliver their services (like movies on Netflix) to consumers. There was a battle over Netflix as Verizon and Comcast wrestled on who will charge web services extra for delivering the high bandwidth content and make money. The notion that someone can pay to be in the "fast lane" of Internet service, was outrightly capsized. The fight and regulatory roller-coaster has been dramatic and FCC has been grappling some legal suit or another since then – sometimes it’s a Verizon and other times it’s an AT&T.

But since then, authorities have realized and promised to crack the whip well on carriers if they are found to abuse their power. Recently, Title II of the Communications Act was a smart move that made the FCC inclined to treat Internet access as a public utility, and created some legal space for more regulatory freedom over net neutrality.

Everything boils down to the basic premise - all Internet traffic should be treated equally by both governments and providers and nothing is blocked, while everything is delivered at the same Internet speed and delivery, no matter to whom or from whom.

Of course, as tempting as it is to get into the other side of the enforceability of law for a concept like this, especially with the way censorship has worked at government level and for big corporates on various occasions; we will let that rant come up some other day.

As of now, the war is far from over

Verizon was successful earlier when it sued to overturn the FCC's "Open Internet" rules and post that FCC chairman Tom Wheeler made moves and plans to enforce net neutrality by swinging Title II of the Telecommunications Act into the game. Now FCC wants to categorize Internet service providers as "common carriers" just like phone utilities. AT&T soon ensued with a preview of arguments around reclassification and now CenturyLink has also joined filing lawsuit charges against the FCC on the issue of net neutrality.

Such net neutrality -focused lawsuits are coming from companies like Alamo Broadband, ACA, AT&T, NCTA, CTIA and USTelecom. CenturyLink for instance, calls the new order as "arbitrary, capricious, an abuse of discretions and a violation of federal law." It has educed the FCC's decision to control and subjugate the Internet as a mistake and even anachronous in nature. It stressed its stand on maintaining an open Internet network and had even invested hundreds of millions of dollars in order to build an infrastructure to support its claim; and it contends that there is no need for the FCC to implement Title II of the Communications Act since the commission could still achieve its goal of preventing Internet service providers from blocking or degrading lawful content.

It argues that these regulations not only have no place in the 21st century economy, but will chill innovation and investment and opined it could lead to higher prices and fewer choices for consumers.

Ask Sridhar Saranathan, a Telco veteran who has spent many years covering the breadth and depth of this industry at various stages of evolution in India, about the interesting dance that the debate is caught up in, and he quips that none of the Communication service providers are Global Operations as in the case of Google/ WhatsApp/ FB/ Skype etc. “Though there are global brands, right from the inception of the industry they are governed by the Stately governments, their regulations and resources/ licenses. Mainly this has been protecting the consumer rights as defined by UN, adopted by the relevant states. Dispute/ grievance on service, breach of trust could be redressed under the state law. Please refer TDSAD as consumer protection body in India. Similarly the citizen interests are protected by Regulatory authorities enforcing service coverage, quality and pricing (including unhealthy non sustainable competition).”

When we were discussing the general issue of Internet freedom with Electronic Frontier Foundation ‘s Staff Attorney Mitch Stoltz, he poignantly remarked that the concept of net neutrality is also important to guarantee freedom of speech. “The Internet is the preeminent medium for free speech today, but unlike operating a newspaper or speaking in the streets, speech on the Internet is almost always transmitted by commercial intermediaries -Internet service providers. The ISPs’ commercial interests may not always align with a policy of free speech and free access to information. At times, an ISP may find commercial advantage in allowing some websites, apps, services, and content providers faster or more reliable access to Internet users.”

But that’s exactly where Mitch peels some hidden layers and how they affect the big picture. “Then, because some Internet traffic is given priority over others, some are better able than others to speak to an audience. Favorable access might be given to those who can afford to pay for it, or simply to people who have a favored relationship with the ISP. An Internet without Net Neutrality rules may come to resemble television networks, where only those with a great deal of capital or political connections can speak to a broad audience.

Electronic Frontier Foundation is a notable nonprofit organization and has been championing user privacy, free expression, and innovation through impact litigation, policy analysis, grassroots activism, and technology development. Back in India, Alaphia, Risalat, Luis, Alex and the rest of the Avaaz team at online activism site Avaaz, maintain that big telecom companies are trying to control the Internet by bullying us into paying more for services like WhatsApp or Skype.

They are understandably disturbed with the possibility that Telecom companies want to create a VIP culture online by breaking the web into fast and slow lanes. “They’ll offer faster download speeds to rich companies who pay them and choke those who can’t. This kills net neutrality -- where all websites are treated equal. Let’s stop money power taking over the Internet in India by acting now!” these activists are urging.

As to the argument that telecom companies are after all profit-making businesses so they should be allowed to charge what they like, these crusaders are clear that a free and open Internet is a public utility and a global consensus is emerging to keep it that way.

They even tag it as the apocalypse of the Internet and fear that it will erase the democratic promise of an information highway for everyone the founders of the World Wide Web imagined.

An optimistic Mitch is confident that the U.S. government has just put in place clear new rules to promote net neutrality, and hopes that other countries will follow that example.

The OTT services, which will operate over such regulated islands of networks, will also be forced comply to the laws of the land in each country they are providing the services through the local partner, who in this case could be the (already proverbial) pipe/access provider. Refer issues related to restrictions on internet services in China and many other countries. "Saranathan opines here.

“As these corporates are parking themselves in the Tax/ Data havens, where the regulatory including Legal Interception (LI) will not be able reach, only way they will be controlled by countries would be by banning them.”

Seems like this sentiment is being echoed on the other side of table as well and not limited to the stance taken by Flipkart etc. Matrimony services’ major Shaadi.com is calling the move myopic already.

“Internet businesses like shaadi.com, have been successful in disrupting industries and delivering dramatic value to consumers based on a level playing field. It would be myopic to try and tilt that playing field to anything but neutral, since it will eventually lead to inferior experiences for consumers, and adversely impact the success of the internet industry as a whole!” surmises Gourav Rakshit, President & COO - Shaadi.com

Satya Prabhakar, Founder & CEO, Sulekha.com stresses that Net Neutrality must be ensured in an absolute sense. “Providing fast or free access to specific destinations, sponsored by the well-heeled companies, discriminates against all others and creates an uneven playing field, ultimately detrimental to the broader society. If internet.org wants to provide free access, it should do so for all web, mobile and app properties, not selectively to a few. This is like laying signal-free, concrete roads to just a few selected shops.”

Another growing e-commerce player Infibeam which started in 2007, too took a stand last week and stated it is against all the biased Internet Service Providers (ISPs) of the country. “Access to equal internet speed for any website or mobile app is a right of every consumer who is paying money for data to the ISPs. Hence, the ISPs cannot be biased and have to provide traffic equally. In India with over 15 ISPs, there are about 10 crore internet users. Despite huge number of internet subscribers and mobile users, the ISPs, which are also telecom operators are bleeding heavily. As per industry estimates, of the total revenue of the telecom companies, over 75 per cent is contributed by voice and rest is by value added services including data. Due to high investments and competition, the margins in voice are heavily squeezed. As an impact, the telecom operators are finding one or the other way to increase revenue and profit.”

It even asks boldly that if telecom operators are bleeding, should they become biased to make profits?

A retail vertical veteran, Sandeep Dhar has another interesting lens to zoom in here. Philosophically, net neutrality has communist undertones; he points out. “It is interesting to see capitalists supporting a communist ideology. On a more serious note, it has no bearing on an e-retailers market penetration. I don't believe that you need preferential access to boost your sales. I would focus on my product proposition. “

At the same time cellular associations in India have started putting things in perspective.

Without infrastructure and investment, there will be no Internet access. The operators have invested billions of dollars in license fees, spectrum fees and network roll-outs. Yet the Industry still makes negative return on the capital employed. The industry estimates the country would need an additional capital outlay of Rs. 300,000 to 500,000 crores over the next 10 years in spectrum, new technology, equipment, towers, optical fibre backbone, etc., to meet the PM’s vision of Digital India, and connect 1 billion Indians to the exciting world of Internet. The need of the hour, therefore, is to have a sustainable industry that has the ability to invest in growth of data services and connectivity to all – as COAI was heard arguing this week.

To connect a Billion Indians to the Internet means innovations across the ecosystem – affordable smartphones, more efficient networks, even more broad ranging applications (especially in areas such as education, health, governance) and pricing flexibility and a greater digital inclusion; is what it rightly puts the thrust upon.

COAI (Cellular Operators Association of India) is clear about its role here - to enable all services to reach customers across the country. “One of the key factors to enable this is that the same rules must apply to the same types of services, including Mobile and IP Voice services. We should ensure customers have the freedom to choose how they want to access the Internet. A customer should be free to choose the device, technology and access platform – paid or subsidized as long as the Internet is always open in terms of access in a non-discriminatory manner. We support this! The interests of a few should not dictate the fundamental right of a customer to choose what he/she wants.” It stated in a press note.

The right answers and on top of that- the right questions is what this debate, as we can see visibly enough now, has generated this month.

More than anything else- that’s what the industry and the Internet milieu essentially and precisely needs. Let’s stand for what is good, and not just for the sake of it or to be with the majority, but for standing at the right place.

Didn’t Voltaire also say - Every man is guilty of all the good he did not do?