Telcos' demand threatens net neutrality, may spur Big Tech dominance: Startup founders

Telecom Regulatory Authority of India upheld net neutrality norms in 2016

In a resounding chorus of support for the preservation of net neutrality in India, startup founders, including PhonePe's Sameer Nigam and People Group's Anupam Mittal, underscored the significance of an open and equal internet landscape, in an interaction with Moneycontrol.

Nigam, Mittal, and Innov8's Ritesh Malik are among the 125 founders who are signatories to a joint letter to the Telecom Regulatory Authority of India (TRAI), wherein they have urged the authority to strengthen India's net neutrality rules.

This letter comes in response to telecom companies' demand (as part of TRAI's consultation on "Regulatory Mechanism for Over-TheTop Communication Services, and Selective Banning of OTT Services) that internet and OTT players pay network costs based on the traffic these platforms generate and other such parameters.

Critics of this demand have opined that this move, if accepted, will dilute India's net neutrality principles.

The collective voice of the founders underscores concerns that any deviation from net neutrality principles could lead to an uneven playing field, favoring deep-pocketed tech giants, and stifling entrepreneurial spirit.

"Net neutrality is key to protecting consumer's freedom of choice and continued innovation in the Indian internet sector. If telecom companies are allowed to charge Internet companies based on how popular their app is, it will skew the Indian Internet market even more in favour of large, deeper-pocketed tech platforms," Nigam told Moneycontrol.

"Big players with the capacity to absorb additional costs for long periods of time will squeeze out smaller competitors and startups. The Internet has been so transformative to humanity precisely because product innovation, not capital, has determined the market winners. This is why net neutrality is worth preserving at all costs," he added.

The letter to TRAI has been drafted under the aegis of 'Save The Internet', a net neutrality campaign, which kicked off in 2015 when a similar debate over the issue had erupted.

While explaining the reasoning for backing this campaign, People Group's Mittal said, "Net neutrality is the fundamental premise around which the Internet has been built leading to countless entrepreneurs, companies, and disrupters in almost every industry."

"In my view, there is no such thing as ‘selective net neutrality’. Once you start to go down this path, it becomes a very slippery slope that can significantly compromise a country’s entrepreneurial & competitive capabilities. Ergo, I am backing this campaign and net neutrality," Mittal told Moneycontrol.

Also read: MC Explains - Debate over net neutrality rears its head again

Earlier, Mittal was among the many Indian entrepreneurs who batted for Indian representation in the leadership of the industry body Internet and Mobile Association of India (IMAI).

Ritesh Malik, founder of the co-working space firm Innov8 and director of the industry body Alliance of Digital India Foundation (ADIF) said, "Net neutrality has undeniably played a pivotal role in fostering innovation and competition within the Indian digital sector. It has ensured a level playing field, allowing startups and established players to thrive based on the quality of their services rather than financial considerations. "

According to Malik, telcos' demand that OTT players pay network costs to the former can have an adverse effect on investment in the sector.

"I advocate against imposing licensing and revenue sharing regulations on Over-The-Top (OTT) players. Such regulations may inadvertently stifle innovation and investment in the sector. The concept of licensing OTT players is against the foundational concept of net neutrality, as it would mean treating all digital content partially, and discriminating in terms of access speed or the blocking of certain platforms while favoring others," Malik said.

Earlier too, Industry body IAMAI, which represents major Indian internet companies, had criticised telcos' suggestion of OTT players paying them for network usage.

"The SPNP  (sending party network pays) system for internet interconnection towards the cost of infrastructure development, would essentially mean charging twice for the same service as consumers already pay TSPs for the data they consume," IAMAI had said as part of their comments on the TRAI's consultation on Regulatory Mechanism for Over-TheTop Communication Services, and Selective Banning of OTT Services.

IAMAI opined that this proposed suggestion went against the net neutrality framework notified by the Ministry of Communications in 2018.

The Telecom Regulatory Authority of India is accepting counter comments for its OTT consultation paper till September 29. Save the Internet's letter to TRAI will be sent as part of this consultation process, following which TRAI will likely come out with its recommendations on the matter.