The Internet has long been a level playing field for entrepreneurs, companies and individuals who want their voice to be heard. This may all change very soon if TRAI (Telecom Regulatory Authority of India) has its way. As per a proposal on its website, TRAI is in favor of Telecom Companies being able to charge for OTT (Over the Top) applications. This is going to destroy innovation as new startups will find it difficult to pay these fees.
What is going to be be much worse if TRAI has its way is that ISPs will have the discretion to prioritize a select bunch of apps and websites over others. You may be a regular buyer at Flipkart and Amazon and compare deals between them to get the best but if all other book selling websites started loading at a snails pace in your browser, how long will it be before Flipkart and Amazon are tempted to take advantage of this monopolistic situation by rigging prices? You may express your opinion on your website or on an internet forum but if that is outside the select list of websites that load fast, how hard will it be to shut you out and make sure your opinions are never read?
While this is an attempt by the Indian government to thwart net neutrality, internationally, net neutrality has been upheld and enforced by USA. US broadband service providers cannot, by law, strike deals with content firms, known as paid prioritisation, for smoother delivery of traffic to consumers. They also cannot block or speed up connections for a fee. All ‘interconnection deals’ where content companies pay broadband providers to connect to their networks, are regulated.
While here in India, in another development, Airtel has launched Airtel Zero, which offers access to a select few applications for free. Any other application will require a paid internet plan. Companies including Google and Facebook which have long taken the high road have no qualms about being part of Airtel Zero while continuing to make the right noises when it comes to net neutrality. More than 150 startups have shown interest to be part of ‘Airtel Zero’.
This isn’t something new. Some telecom service providers have been offering Google, Facebook, Twitter and Whatsapp at reduced prices or free, for a while now. Ironically, Google has long had the motto ‘Don’t be Evil’ and there have
often been questions about whether the motto still applies.
The TRAI proposal has accelerated the protests.
For a large percentage of internet users in India, the internet comprises of Google, Facebook and Whatsapp. Once a ‘free zone’ for internet access has been established by taking money from companies that want inclusion, it will be near impossbile for competitors to come up thus strangling competition and ultimately giving the consumer a raw deal. Overregulation, licensing and monpolization is what has led to almost all Indian banks having profit margins of over 70%. Restricting the choices of the consumer artificially is never a good idea.
The TRAI, in its proposal where it seeks to benefit from OTT services, justifies this, offering various arguments, all of which have been demolished by various writers across websites. TRAI claims that the companies have invested heavily in infrastructure to provide internet services to us. While that may be true, it is also true that a major chunk of their investment is in licensing ‘air waves’ that belong to the country. The government has taken tens of thousands of crores for these. Despite huge investments, they have turned this into an immensely profitable business.
The reality is that telecom businesses in India are cash cows for the owners!
Vodafone India reported an earnings before interest, depreciation, taxes and amortization (EBIDTA) of Rs 13,399 crores in FY14.
Bharati Airtel reported an EBIDTA of Rs.15,608.70 crores in FY14.
So, these companies have turned their businesses in India into huge cash cows.
One of the reasons these companies are so profitable is because they have stopped investing in innovation and providing better services to the consumer.
..and the concept of ‘Broadband internet’ in India is laughable!
‘Broadband’ internet acess in India is defined at 512 kbps as notified by TRAI.
It used be even worse. I remember having a 2.4 kbps connection when internet was launched in India. This went up to 14.4 kbps soon after. In the United States, ‘Broadband internet’ is defined by FCC as internet over the speed of 25 MBPS.
USA’s ‘broadband internet’ is 50 times faster than our broadband internet! Otherwise it’s not considered ‘broadband’ at all. The cost of accessing the internet is prohibitively high in India already.
In Mumbai, you pay MTNL Rs.1599 for a 10 MBPS line.
A 1 GBPS internet line is literally a hundred times faster than a 10 MBPS line! (1 GB = 1024 MB).
This is literally a 100 times what people in Hong Kong pay because you are getting one-hundredth the speed at the same price! The fastest Fiber-to-the-home line that MTNL offers is 100 mbps, 1/10th of the speed of the Hong Kong connection mentioned that this costs Rs.6999 or more than 5 times as much! Other companies including Airtel, Reliance, Vodafone, Idea, Tata etc also have prices similar to MTNL.
The consumers are getting a raw deal already from internet service providers in India. Now they want to make money from over the top services such as applications.
Telecom companies have been known to be using Voice over Internet Protocal (VoIP) technology to route phone calls and bill consumers at regular prices. They have also been charging extremely high prices for text messages. All of this is hurting the telecom companies now because there are apps like Whatsapp and Skype which will let you call for free and send messages for free. So they can’t profiteer as much as they would like to. This is a result of innovation. It’s what led to the decline of the Blackberry Messenger (BBM) after Whatsapp emerged as a free alternative.
Dividing the internet into parts, some of which are more equal than others is a dangerous trend and must be stopped. The internet in India has emerged as a strong voice of people influencing government policies, shaping opinions, toppling governments and bringing parties to power. It must remain the equalizer it is. The government shouldn’t be in a position to dictate which websites can be accessed by people at large and which can’t.
The Prime Minister, Mr Narendra Modi has been giving speeches about supporting small business, innovation and technology. This latest development is at odds with all these claims and declarations. If we have to have companies of the size of Facebook, Twitter and Google emerging from India, we must offer a level playing field to new startups and entrepreneurs. TRAI’s apparent stance against net neutrality will curtail competition and threaten the freedom of speech of the common man and needs to be protested against, vigorously.