There was disturbing news last month when a committee appointed by the Department of Telecom (DOT) recommended several rules governing the Internet in India, under the umbrella of “net neutrality”.
Net neutrality is a term that was first coined by Columbia University media law professor Tim Wu in 2003. It is the principle that Internet Service Providers (ISPs) should treat all data on the internet equally — for example, not preferring to send e-Commerce packets faster than email packets. To ensure that this is done, supporters say that external governance is needed to preserve a “free and open” Internet that gives everyone the same access to any website hosting legal content, including video, music, photos, social networks, email, and maps.
But a lot has changed since 2003. Facebook, WhatsApp, Flipkart, Snapdeal, Ola, Olx.in and Quikr did not even exist back then. When these big e-Commerce companies began operations, most could never have predicted how they helped usher in a tectonic shift in the way Indians use information, buy from merchants or how they buy from each other. That this shift has happened not “because of” government policies and investment but “in spite of” them shows that “Laissez-faire” economic models — those based on classic free market principles of high market efficiency and limited government regulation — work exceedingly well.
Why’s it a bad idea?
Net neutrality is a bad idea for India because the term itself is intellectually dishonest. It involves the internet being governed, controlled and managed by the big hand of government which purports to know best, often with the full support of the large telecom companies that are in bed with it.
At July’s DOT panel meeting to discuss net neutrality, for example, the panel recommended, under pressure from the big telecom companies, that popular Voice over Internet Protocol (VOIP) calls — such as those made using Skype and WhatsApp — should be regulated, taxed and charged just like regular phone calls. The reasoning was that these applications are over-the-top (OTT) services, programs that ride over the existing infrastructure that the ISPs provide.
This argument is silly. Any physics student knows that a packet of data is a packet of data. Whether you encapsulate elements of voice, video, email or a photo in that packet, it still remains just that — a packet of data. On Google Voice, Skype and Whatsapp phone calls, these packets are transmitted through the internet using VoIP technology, charged for by the ISPs when they provided you with a broadband connection. So what difference does it make to the big telecoms that these packets contain voice information?
All about the moolah
The truth is that the big telecom companies have invested in large circuit-switched telephone networks and want Indians to use their infrastructure to make voice calls. The government benefits too because calls made on this infrastructure generate taxes. If we used Skype or Whatsapp to make Voice over IP calls at little or no cost because these are conducted as data packets over the internet, the telecoms (and government) lose revenue —just like these companies lose revenue when someone sends a WhatsApp text message rather than SMS.
And so, using the principles of crony capitalism, they prodded the DOT panel to essentially outlaw VoIP calls — a serious blow to start-ups and average Indians who rely on inexpensive VoIP calls to keep costs down.
VoIP technology is not regulated in the US by the Federal Communications Commission (FCC) and the benefits to the consumer have been huge. Making a call on AT&T’s network, to India for example, costs a whopping $0.28 per minute on top of the $5/month fixed fee to get this preferred rate. Rates to India mobile phones are even higher. In contrast, making a call to India on Google Voice costs $0.01 per minute, no matter which number you call, landline or mobile. With WiFi practically everywhere these days in US metro areas and 4G LTE mobile technology prevalent on all major US mobile networks, call quality is just as good as calls on the big phone networks.
Fair and equitable access?
There is another argument that supporters make to defend net neutrality — one about fair and equitable access to the internet for all. An extreme example of this case occurred last year in the US. Netflix, the big video streaming site, is said to account for nearly 30 per cent of all internet traffic during peak hours. Certain Netflix users on the Comcast network used to suffer annoying waits when their signals buffered interminably. In a landmark deal, Netflix agreed to pay Comcast for faster and more reliable access to Comcast’s subscribers. In other words, Comcast reserved bandwidth and pushed through Netflix signals on priority, insisting that it had made sufficient investments in its infrastructure to not slow down other signals. Think of this as the government adding a new lane on a highway but for the exclusive use of people who are willing to pay more to use it. Supporters of net neutrality contend that these kinds of agreements are amoral and wrong.
This argument is misleading as well. Think of the internet as a public good, just like the Railways; for as long as the Indian Railways been in existence, there have always been different classes of service on our trains. First class A/C provides more benefits and costs more. Sleeper class provides fewer benefits and costs less. Do net neutrality supporters advocate abolishing different service classes on our trains and make them all the same?
India’s internet revolution is alive, well and real, helping the country double its economy from $1 trillion to $2 trillion, in just seven years. Until now, New Delhi has largely been an innocent bystander, overwhelmed by the rapid speed of development, innovation and simplicity that are unique to India.
Let’s keep the government’s hands away from the internet.
Let’s say No to Net Neutrality.
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