Net Neutrality – Have We Understood It Right?

Net Neutrality – Have We Understood It Right?

I am a cab company and am now entering into a contract with a toll wherein my passengers will not be charged toll. I will pay for it in lump-sum and my cabs would be allowed to pass through the free gates, without having to stop. Is it a breach of toll neutrality?

I don’t think we have evaluated and thought about Net Neutrality the right way so far. Net Neutrality simply says that all data on the internet will be treated the same way, irrespective of the source and irrespective of the content. Providing a choice to the source to make the payment versus a user to make the payment is actually a reasonable way to make the web available to everyone.

There are numerous examples of how such choices have been made by organizations across the globe for a variety of add-ons to their products. Wherever you read “free”, read there is some neutrality violation.

I think we need to look at Net Neutrality from three different aspects:

1) Businesses: e-commerce giants like Flipkart are here to make profit. Period. To make that happen, they offer free shipping / free add-on products / special offers and discounts / free installations and what not. This may very well be another step towards increasing their business. As long as they pay for it and the customer gets benefitted in one way or the other, does it harm? I mean, c’mon as a customer I can (and in most cases will) always choose to buy from the one who’s offering me something extra!

2) Consumers: For most of those who would read this blog, a 3G pack for their mobile phone is like oxygen (just that it’s not freely available). But, think about the large chunk of this nation’s population that still cannot afford it. What do they do? Either stay deprived of this godsend gift or push out that extra cash. Is it not better to offer them something if not all?

3) Service Providers: Airtel charges me for every second I talk over the phone; for every byte of data used; for every SMS sent, and everything else. It’s a Telco with social responsibility to keep the nation connected, but it is not here to do social service. Airtel Zero may be their latest attempt to get stack loads of share from the booming online / e-commerce industry. But, if this whole move ends up proving advantageous to a major chunk of internet deprived Indian population, does it harm? Not to overlook the sky-high stacks they invested to get these 3G / 4G spectrums. My view gets good faith from the MD & CEO, Bharti Airtel Ltd., India & South Asia – Mr. Gopal Vittal – “As a company we do not ever block, throttle or provide any differential speeds to any website. We have never done it and will never do it.”

So what exactly is the issue? The issue that I do support is that Telcos can’t decide to ban some application or make some application load slower. They have to treat all applications and data as equal. But then again, can they ask one of the companies to pay a premium to load faster. For right now till we evolve further, let’s assume the answer is NO.

Other than this, the issue is the same that capitalism has always faced. When does something become monopolistic enough such that there are some control levers to be put in place?

Airtel charging Flipkart directly or even providing them some discount on the data usage since Flipkart’s usage becomes very large and Airtel doesn’t have to collect it from millions of users should definitely be their prerogative. Governments across the globe have always tried to (successfully or unsuccessfully) control monopolistic behaviour and I am not against it. TRAI needs to put that control in place and redefine some levels within which Telcos and Application Providers can operate. Free market rules need to be defined and abided by.

Maintaining law and order on New Year ’s Eve does not necessarily mean closing down every entertainment establishment on 31st Dec. It has to mean better provisions / laws / rules to ensure people are able to celebrate freely without ending up in chaos.

Disclaimer: I own a couple of apps and products which may severely get impacted if a Telco puts some other app as their default free or cheaper data cost app. But, that shouldn’t deter me from my principle of free and open capital markets.

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