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My explanation of the Harmonious Coexistence of Net Neutrality and Zero Rating

Gautam Gandhi
posted on 23rd April 2015
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If you’ve been online, watched TV, or read a newspaper recently, you’ve probably heard about Net Neutrality and the the “Save The Internet” campaign.  Indeed, in the last few weeks, the issue of Net Neutrality has become one of the hottest trending and most passionately debated topics in India.

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So what exactly has happened in the last few weeks to cause such an an uproar?

In March, TRAI issued it’s 116-page Regulatory Framework for Over-the-top (OTT) services, which covers all types of regulations including Network Neutrality. Many of us do not have time to read through the entire document and have been reacting emotionally to the idea that the internet might soon be over-regulated by the government.  I think we can agree nobody wants that, and hence some of the outrage around the topic of Net Neutrality. (If you are interested, you can read the entire TRAI document here).

Net Neutrality maintains that there should be an open internet, which allows free choice to consumers. Internet Service Providers (ISPs) should not block or discriminate against any application or content that rides over those networks. This includes discrimination on speed or levying an extra tax on certain internet traffic (source: Wikipedia)

Just as your phone company shouldn't decide who you can call and what you can say on that call, your ISP shouldn't dictate the content you view or post online. Additionally just as phone companies cannot give better voice quality or better connectivity to certain numbers, ISPs should not be able to throttle speed or create “fast-lanes” for certain businesses or specific apps.

We have already seen evidence of these practices in India. In December, when Airtel proposed the introduction of special VoIP packs, the company wanted to levy an extra charge to consumers for using--amongst other apps--Skype, Line and Viber. These extra fees clearly discriminate data traffic and violate the principles of Net Neutrality (source Reuters).

The other trigger to the uproar around the Net Neutrality debate was the news that Flipkart might be joining a “Zero Rating” program by Airtel called “Airtel Zero”, allowing data charges from the Flipkart app to be free to users. Zero Rating, sometimes also known as toll-free data, is the practice of a mobile operator not charging the consumer for data usage on specific applications (source Wikipedia). Companies such as Twitter, Facebook (with internet.org), Google (with Freezone & AndroidOne) and even Wikipedia have all been employing Zero Rating in India and other parts of the world for years now. This is similar to the accepted practice of 1-800 or toll-free numbers worldwide where the company bears the cost of the voice call, not the consumer. This is a common practice worldwide and does not violate the traditional definition of Net Neutrality.

So, why the outcry over the “Airtel Zero” program?

Details on the Airtel plan are scarce, and many people (including myself) have speculated about how it really works without access to all the facts. If we assume the Airtel plan was democratic in nature and equally accessible to all companies (and that is a big assumption), it would still only allow mobile app publishers to Zero Rate just Airtel users. They would not be able to do anything for their customers on Vodafone or Reliance.  There is also a distinct possibility that you give Airtel the power to choose which mobile apps it can favor by publicizing those heavily, and perhaps penalize others by imposing higher tariffs and not promoting them.  With a captive audience of 200M users, this may impact the ability of new market entrants to compete.

And what about Facebook?

Some people suggest that Facebook’s internet.org innitiative provides Zero Rating, however this platform is also flawed. The apps allowed in the program are curated by Facebook and the program is not open to all mobile app publishers. Also, presently, internet.org only works with one only one carrier in India--Reliance.

Ultimately, many netizens are fearful that programs such as “Airtel Zero” will negatively affect startups and less financially robust companies. Many of these organizations will not be able to effectively compete in the market because the costs of offering a Zero Rated service would be sustainable to only a select few.

Yes, this may be true but it is the basic tenet of a free economy. If we think about the startup industry in general, companies that are able to secure large amounts of venture funding have a distinct advantage because they are able to attract the best employees, and can afford to advertise--they inherently have a competitive edge over other companies.  The reality is that some companies will always have deeper pockets than others, but it is never constant: Flipkart will have more money than any new ecommerce startup, but there was a time, not too long ago, when Flipkart had less money than their competition.

In a free market, competition and choice are healthy. Most of us on our mobile phones are using Vodafone, Airtel and other private companies as our main carrier.  And not necessarily because they are the cheapest, but because they provide the best coverage or the best call quality in our area. We have a choice over which carrier we use. So, if Flipkart wants to pay for the data charges for their app, that’s their right, but it does not necessarily mean I will use it and or make purchases from them.

With the Indian mobile apps market set to almost quadruple over the next few years, and hundreds of millions of new users coming online, it makes sense for mobile app publishers to implement Zero Rating plans.  Because data rates in India are high compared to average income, many people are "data-rationing" by turning on and off online services to manage their data usage.  In fact, many smartphone users don’t even have a mobile data plan. By providing free data, mobile app publishers are able to remove this barrier to access, and ultimately enable more consumers to use their products.

I have spent a fair part of my career creating programs at Google concerned with expanding internet usage in India and getting more people online. Based on my experience, I believe a Zero Rating solution might work not only to accelerate the growth of internet users in India, but to foster business innovation, and increase consumer choice in our free market economy. I propose that we need a Zero Rating program which works across all operators, is open to all mobile app publishers, and provides benefits to all consumers, regardless of mobile operator or ISP. This program could then be regulated by TRAI to ensure compliancy. I believe that  if we can achieve this, the growth of ecommerce in India will surpass current expectations.

Whatever we do, we must strive to maintain an open internet, as an autocratic bureaucracy of the internet would stifle innovation for all. We also must congratulate ourselves that we are having an open and democratic debate about these issues. The voice of the people is being heard and considered, and legislation is not happening behind closed doors. This is real progress and a healthy step toward an open internet for all.

You can also see Net Neutrality debate with Vijay Shekhar Sharma, the Founder of One97 Communications on Young Turks and a discussion with Nikhil Pawa at India Internet Day.

Disclosure: Gautam Gandhi an ex-googler, currently he is an angel investor. Gandhi is also an advisor to Mavin, a startup creating an open access, data toll free platform across all carriers in India. All views expressed in the article belong to the author.

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