Net Neutrality – Is it Neutral?

By Jatin Baweja June 18, 2015

What is Net Neutrality?

Net neutrality simply means that you are in control of what you do on the Internet. Net Neutrality is the principle that Internet Service Providers (ISPs) should not discriminate or promote any form of data over the internet. It prevents ISPs from charging differentially based on content, user, site, etc.


Why this fuss about Net Neutrality in India?

In December 2014, Airtel, a leading telecom network and ISP, changed its service terms for 2G and 3G data packs so that Voice over Internet Protocol (VoIP) data was excluded from the set amount of free data. So, Airtel would levy additional charges for making voice calls using apps like WhatsApp, Skype, Viber, Facebook, etc. Airtel’s move faced criticism on social networking sites and it withdrew the planned changes after Telecom Regulatory Authority of India (TRAI) announced it will release a consultation paper on Over the Top (OTT) services, including VoIP, soon. In March 2015, TRAI published a formal consultation paper on Regulatory Framework for Over-the-top (OTT) services, seeking comments from the public.

How are you affected by Net Neutrality?

As a Mobile Internet user:

Currently, for accessing internet on mobile, you only pay charges for your data pack. Now, if Net Neutrality is violated, your mobile ISP could charge you separately for accessing certain apps. On top of that, it can also charge you additionally for different services used on that app. So, your ISP can now charge about two to three times the amount it was charging earlier. Or, ISP could block certain sites altogether and you’d have to pay additionally just to get access to that website.
For example, WhatsApp offers IM and VoIP services, both of which are charged on per-KB usage basis. Now, your mobile ISP could charge you access fee for using IM on WhatsApp and separate access fee for using VoIP services on WhatsApp. Moreover, it may charge at different per-KB usage rates for using VoIP services on WhatsApp and some other VoIP service provider (say, Skype) just because one VoIP paid more to your mobile ISP than the other for promoting it over their network. It may also be possible that just because your mobile ISP wants to promote its own IM service (say Hike), it may even cut-off other IM service providers totally and you’re forced to use the ISP’s IM services. Now, you may switch to the mobile ISP’s IM services but your friends may not want to leave their old IM service provider.

As a Start-up/Small Business:

Violation of Net Neutrality would harm not only the mobile internet users but also the upcoming technology start-ups and small businesses. Let’s say, ISP-A charges amount ‘X’ and ISP-B charges amount ‘Y’ just for providing access to your app to their respective users. Now, as a start-up or a small company, you’d not be able to pay all ISPs the respective amounts. Let’s say, you somehow managed to pay this fees to 2-3 ISPs and were able to promote your site on certain ISPs. But, by the time you were able to do that, some large corporation, who had a similar idea, was able to promote its app over all ISPs and their app is now the one that users prefer to use. Moreover, if some global start-up wanted to promote its app in India, it would not bother to go through all ISPs or even one, and Indian users would be deprived of the app, until the time the start-up has enough resources to go global. There might be slim to none chances of the next Google or Facebook getting off the ground.

As an Internet Service Provider (ISP):

The ISPs spend billions of dollars to build networks for consumers’ use. Not only that, they first have to purchase the spectrum from the government at extremely high costs to build the network on. Companies like WhatsApp, Skype, Google, etc. provide services to consumers to use VoIP to make calls to each other over the ISP’s network, which costs a fortune to build, for free. This puts a toll on the ISP’s revenues and thus, the ISP would like to have a share in the profit with these service providers over the VoIP services provided. The ISPs simply want to charge for the infrastructure they have built. It’s similar to the toll centres on highways that charge for the roads built by them.

The consumers can hog a significant fraction of the bandwidth for an ISP over use of these services but with Net Neutrality in place the ISP would have no control over regulating the consumers. This could mean significant outages of other services. To compensate for this loss, the ISPs might have to increase the general rates for data consumption and all the net users, even those who don’t use these OTT services, have to pay a hefty price for simply browsing the Internet.

As an existing OTT service provider:

The companies which provide OTT services (Skype, WhatsApp, Facebook) might argue over why they should share their profits with the ISPs. They might question why the ISPs have the power to decide which service it would like to promote. The users should have the right to choose one OTT service provider over the other and ISPs shouldn’t be able to restrict any. The ISPs may ask any amount of profit from the OTT service provider and since there are large numbers of ISPs, all of them may ask a fairly huge amount from the OTT service provider’s profit. They may not be able to generate enough profits to sustain their services.

Is Net Neutrality totally fair?

As a consumer, we may think that it’s unfair to charge differentially for these OTT services differentially. As a start-up, we may protest that it hinders the growth of our product. As an ISP we may argue that it may eat away a significant portion of the revenue. As an existing OTT service provider, we may argue that it may curb sustainability.

Is it really neutral for all? Aren’t each of them right in their own place? Thoughts?

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1 comment

  1. Sajjad Manal says:

    Thanks.. The information was much more elaborated and easy to understand than wikipedia.