Net Neutrality: Will Telcos Thrive On Ambiguity?

by CXOtoday News Desk    Apr 24, 2015


There have been raging debates on net neutrality in recent weeks from Airtel’s Zero to Facebook’s and anything that’s coming on the way to block the Web. Those debating are either ‘for’ or ‘against’ the topic. However, Net neutrality is not as simple as that, believe experts. There needs to be greater clarity in the process.

If Telecom Authority of India (TRAI) has its way, telecom providers will have a say in how the internet is used. The Internet won’t be free for all. Telecom operators will decide which websites are charged more or less, and the criteria for that is whoever pays more.

Simply put, some experts have drawn an analogy to highway. They say the Internet is like a highway and vehicles are like data. What telecom operators are saying is that they would help a car stuck behind to come to the forth, if the car owner is ready to shell out extra money. That essentially means, the Internet is going to be the preserve of those who can pay more to the telecom operators. For example: An ecommerce company can pay Airtel to get an edge over its competitors.The question arises as what is the basis for that payment to be made? Is it the bandwidth? Is it the number of users? Is it dependent on some ranking? While regulations to monitor Internet are essential, there is a need to ensure no one party is benefited.

Read more: Net Neutrality: What Industry Leaders Are Saying

Recently, Whatsapp upgraded its free messaging app to free calling app. That could be one of the reasons why telcos are feeling threatened in the Voice over Internet Protocol, or VoIP space which provides voice call over the Internet.The Indian telcos are already bearing with high spectrum charges and facilities like free calling and others by OTT players are sure to dent their revenue prospects.

Not giving in to pressure from telcos, a DoT committee is investigating the Airtel Zero plan while TRAI is discussing the scope for pricing over-the-top (OTT) applications, which comprise the larger social media services, which are part of the infrastructure of telecom operators to reach mobile consumers.

Talking from telecom operators’ side, Himanshu Kapania of Idea Cellular said at a COAI debate: ”We are not against any OTT players, it’s not a question of we vs they. OTT players are important for the growth of internet, all we want is same rules for same services.”

Sanchit Vir Gogia, Chief Analyst and Group CEO, Greyhound Research, says: “The pending TRAI decision on establishing a regulatory framework for web-based OTTs if gets passed will have serious implications on millions of Indians. While there is a lot of debate going on about the ramification of Net Neutrality and why it’s relevant in today’s digital economy, the two segments that will be clearly be affected are the Telcos and the customers using web-based/data based services.”

Read more: Here’s How Nasscom Openly Supports Net Neutrality

Unless TRAI comes up with a clear roadmap for implementation of regulations, there will be ambiguity surrounding the issue.As Pavan Duggal, cyber law expert, sums up in a statement to Hindustan Times, “The IT Act does not mention anything on net neutrality, the telecom policy on it is ambiguous and there is social concern. The issue is bound to go to courts.”

“For Telecom Operators/ISPs, the monetization of web-based OTTs will result in larger autonomy over the consumption pattern of users as well as a substantial increase in avenues for revenue generation,” says Gogia.

“The concept of web as we understand and avail today is free access to all services where the Telco’s/ISPs do not have any authority to block any web-based service provider. Thus by allowing ISPs to manipulate the web-marketplace in the guise of charging for OTTs (as per TRAI regulations) will lead to ISPs creating selective & differential pricing for all web-based services that we consume today,” says Gogia.

That’s precisely the theory behind Airtel Zero. But what is lacking as of now is specifics about how it is going to work.If it is about differential charges, will there be different rules to access 2G, 3G and 4G data? Will it depend on the devices used?

More relevantly, one can question how does it help economy or the country?Gogia says, this selective & differential pricing levied by the Telcos/ISPs will definitely take a hit on India’s emerging digital economy. “While rural India is still getting used to internet –based services for financial inclusion such as mWallets and online banking, the decision to monetize all web based apps will directly impact this part of the economy. Overall, all consumers of web-based services will become entirely dependent on their Internet service provider for access to basic web-based apps that were earlier free,” he says.

Is that total dependence good for Interent service providers? Will telcos thrive on the ambiguity surrounding Net Neutrality? Please share your thoughts.