The common refrain among advocates of net neutrality is that violation of its principles is inherently anti-consumer and bad for competition. That may not be the case.
Of late, a lot of ink has been spilled, or pixels displayed, on the subject of net neutrality in India. The issue caught netizens’ collective imagination after Flipkart tied up with Airtel on a platform launched by the latter that would, in lieu of payment, allow the retailer to subsidize its users’ browsing charges.
However, following much criticism on social media, a video by satire group AIB, a general outrage that appeared to suggest how deals of such nature would eventually destroy the free, open and equal nature of the Internet, and voicing of opinions by many important people, Flipkart to beat a hasty retreat.
The debate has generated so much passion that that telecom companies are now being seen as greedy scoundrels out to destroy the basic fabric of the Internet for a fast buck. While attempts to deconstruct the issue in a balanced manner have resulted in shrill pro-neutrality advocates drowning out other voices. (The last time one recalls such mass hysteria being in action was in 2011, when you were likely to be judged pro-corruption if you didn’t back Anna Hazare’s anti-graft movement.)
But here’s why the collective outrage over companies “attempting to destroy” the Internet as we know it is misplaced.
According to Wikipedia, the Net Neutrality principle says that “Internet service providers (ISPs) and governments should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, or mode of communication.”
The principle seeks thus seeks to prohibit ISPs from either negatively discriminating against certain types of services (for instance, video-calling services such as Skype, Viber, etc) by charging for them separately or positively discriminating (such as Airtel’s newly-launched platform) by allowing data sponsors to put their users on to so-called “fast lanes”.
The common refrain among pro-net neutrality advocates is that the above constitute to being “anti-consumer” (in the first case) and “anti-competition” (second).
Are all bits equal?
Let’s tackle the first issue first. It stems from the notion that “all bits are created equal”. As a result, proponents believe that as long as Internet users have active data plans, they should have the freedom to access all types of data, regardless of type of origin.
The problem with this argument is: all bits aren’t equal. While so far the Internet has largely enjoyed a “neutral” run with users generally not required to pay ISPs to access specific services such as YouTube or WhatsApp, fact is different types of services put different levels of strain on a network infrastructure.
As a result, a user who uses her data plan largely for activities such as e-mail is subsidizing a similar data plan largely used by another user for streaming video or online gaming – even if both consume the same amount of data in a given timeframe.
Vincent Cerf, co-founder of internet protocol (or “father of the Internet”), who once noted that “nobody knows what net neutrality is”, summed this up best when he stated: “There’s also some argument that says, well you have to treat every packet the same. That’s not what any of us said. Or you can’t charge more for more usage. We didn’t say that either.”
There’s also a notion, also mentioned in the AIB video, that if operators plan to introduce data plans specific to usage type (such as for Internet-based calling – again proposed to be introduced last year by Airtel, later cancelled), users will be required to pay “extra”, over and above regular data charges.
But it must be remembered that even if operators were to hypothetically force users to buy specific plans for usage types such as e-mail, browsing, VoIP or video streaming, usage from their regular data plans would go down commensurately. (It would be like buying a custom postpaid plan where rather than paying a flat rental, you selected how many minutes of voice calls or number of SMSs you required and so on.)
Also, the notion that any use-specific plan would necessarily be priced costly implies an inherent mistrust in free-market principles that have so far worked wonders for the Indian telecom sector.
Is “positive discrimination” harmful for competition?
The second subject is trickier because of its rather subjective nature and because a number of people have rallied against it, including Sir Tim Berners-Lee, the founder of the worldwide web.
In essence, neutrality proponents contend that were various companies allowed to strike a “zero-rating” deal with ISPs to put their services on to “toll-free fast lanes”, it would inhibit competition, especially from smaller rivals who cannot afford such a privilege.
But the argument has problems at several levels.
Saying that to allow a large e-tailer such as Flipkart to subsidize users’ data charges would hurt smaller rivals would be assume that such zero-rated plans would necessarily be beyond others’ reach, as also to assume that over the long term, Flipkart would not need to pass on additional costs via pricier goods.
The argument is also a gross generalization. For, not allowing a company/service the freedom to reach its audience at a particular speed or cost can also harm competition. Ask that to Slovenian cloud-storage startup Hangar Mapa, which was able to mount a challenge on larger rivals such as Dropbox and Google Drive by waiving data charges off its customers (or users wary of incurring high data charges in transferring several gigabytes of data wouldn’t have switched.)
In an eloquently-argued piece, Forbes contributor Jeffrey Dorfman also laments the fact that the net neutrality regime by providing equal access to all services inhibits innovation thanks to the “lack of an incentive, of an ability to provide a special level of service for perhaps yet-to-be-invented internet applications”.
A fastlaning exercise may also serve a social purpose. Companies such as Twitter, Wikipedia and Google have opted for such services for years in a number of countries around the world.
Google was the creator of Project Loon, which involved providing rural people internet access with specially hosted high-altitude connectivity balloons. Facebook is the sponsor of the fastlaned non-profit project Internet.org that aims to acquire subsidized or free Internet access to everyone -- In India, Facebook has tied up with Reliance Communications for the same.
Finally, a lot of people, including the folks at AIB, have misconstrued the “fast” versus “slow lanes” argument, where it is implied that were an operator such as Airtel to tie up with Flipkart, it would not only involve putting Flipkart’s usage on the toll-free lane but also involve deliberately “slowing down” rivals.
But even when there have been so-called violations by use of the “fast lane” principle, a “slow lane” merely involves putting users in the “normal” lane, rather than to make an attempt to slow down traffic to rivals.
This can be gleaned from the statement of Ajit Pai, a commissioner of the US Federal Communications Commission (FCC) who disagreed with it when the latter took a famous stand on net neutrality by clamping down on Comcast after the operator blocked a torrents website due to network constraints.
When Pai was asked about perceived threats from ISPs to deceive consumers, degrade content, or disfavor the content that they don’t like, he said: “The evidence of these continuing threats? There is none; it’s all anecdote, hypothesis, and hysteria. A small ISP in North Carolina allegedly blocked VoIP calls a decade ago. Comcast capped BitTorrent traffic to ease upload congestion eight years ago… Examples this picayune and stale aren’t enough to tell a coherent story about net neutrality.”