Tuesday, April 07, 2015

The danger to net neutrality- telcos ready to loot

Few decades ago, there we no concepts of toll booths. Vehicle owners paid road taxes and could drive anywhere. Slowly the concept of tolled roads came into being. Argument was that these are nice well built, well paved roads using which one can save money on fuel, maintenance and also reach destination faster. But now, almost every other road is tolled. Depending on how big is your vehicle, you have to pay varying amount to cross the toll booth. Most of the claimed advantages have vanished, because any time saved on highway is lost waiting at next toll booth, road maintenance is just ok to bad, with most toll roads having some sort of construction going on somewhere. Once we’ve started paying, there’s no way out. Irrespective of traffic, irrespective of road conditions, we need to keep paying, which is revised upwards once a while.

Now a similar concept is being planned for internet usage. Internet companies want to charge not purely based on bytes of data consumed, but how it is consumed. If a website/app owner pays lump sum amount to mobile operator or service provider, consumers can access that website/app for free. If someone app/website refuses to cough up money, mobile/internet service providers can chose to charge exorbitant amount to access such websites, forcing customers to spend less time on that site/app or find an alternate app/website that doesn’t cost a bomb to access.

What this means is telecom operators will now heavily influence which websites/app we use and which we don’t. Small time players who can’t make their websites/apps toll free will eventually cease to exist unable to fight the bigshots. Extending this further, operators can find out which apps/websites are most frequently used or those with which one can’t live (Example, Gmail, twitter etc) and charge more for it, as users have no alternative but to cough up. If accessing blogger or wordpress is made expensive, bloggers will have to spend a part of their income (if any) on accessing their blogs to update next post. If mobile/internet banking is charged exorbitantly, one may have to abandon it and have to walk into a bank branch to avoid being ripped off.

The variation in charging user need not just be limited to websites or apps. It could be in terms of bandwidth or any other conceivable way. For example, if Vimeo pays more money to say Airtel, airtel might slow down youtube, causing irritation to consumers and making some of them switch to Vimeo. Similarly the way companies charge extra for special occasions, on the day of Class 10 results, accessing any website that offers online results could be charged more.

Why Telcos are doing this?
So far the primary revenue for telecom operator was Voice calls and SMSs. Internet was secondary. They would charge extra for special occasions like new year and use several tricky schemes to charge more. For what costs a few paises, customers were charged about a rupee (more for national & international sms). Over time, people have stopped sending SMS, almost. Apps like WhatsApp have made SMSs redundant. No one sends international SMS these days, everyone uses facebook or whatsapp to communicate. So mobile operator’s SMS revenue has gone down.

Now Apps like WhatsApp have introduced voice calls also. For very low cost, without any loss of clarity, consumers can call anyone in the world for almost free. This has started hitting the main source of revenue for mobile operators, who are now forced to think of new ways to generate revenue. Instead of innovating in right spirit (such as reducing call/sms rates to sensible levels or launching their own apps to counter skype/whatsapp) what these companies want to do is charge you more if you use specific apps or websites.

Such a principle is illegal in US and in most part of the world. Consumers pay for amount of data consumed. How it is consumed- on which apps or websites- shouldn’t influence billing. But indian telecom operators and the regulatory authority TRAI seem to be keen to ignore the idea of free and fair internet and are planning to trick consumers into paying more.

Telecom companies have developed a cunning plan to rob both internet users as well as website/app owners alike. TRAI do not seem to have any motive to prevent this, as it claims “There’re no laws regarding net neutrality in India”. IAMAI, lobbying body for mobile companies and NASSCOM, some of the prominent organizations who could have voiced their objection to moves that hamper net neutrality seem to be very silent on the matter.

Of course telecom companies will not apply this in full swing in one go. Below is how they will probably progress in implementing their strategy of charging at will:

Phase 1: Initially there will be schemes where corporates can opt in to be part of it. Recent Medianama report claims Flipkart has signed up with Airtel Zero, wherein Flipkart will pay a huge sum to Airtel for allowing airtel subscribers to access flipkart app and website for free. Consumers wont be billed for accessing flipkart, which might seem like a good thing in the beginning. But soon, this becomes the norm- every app/website owner will be forced to fall in line or be left out.

Phase 2: Some sort of differentiation will be induced between paying apps and non paying one- mostly speed. Say flipkart pays but Snapdeal doesn’t, then accessing snapdeal app will be slower and more inconvenient, while flipkart app works like a rocket. This will force Snapdeal also to pay Airtel and join the club. Small operators who can’t afford to pay airtel will slowly perish.

Phase 3: Some selective apps will be kept out of the data pack and charged extra. For example, What’s App will be billed at a different rate than rest of internet, irrespective of what data plan and limit you have. This will force consumers to search for cheaper alternative or force WhatsApp to pay to Airtel.

Phase 4: Ground work is set, now everyone is used to paying toll. So free access will be next to nothing. Almost every practical website or app will be charged differently at the will of telecom operator. Consumer has no choice but to fall in line.

Why this is bad for us?
  1. Your internet bill will shoot up exponentially, because now operators know your usage, compulsions and won’t hesitate to charge extra for things you can’t live without
  2. It becomes very painful to keep a check on your bill- how to keep track which one is free, which one is not and which one will cost a bomb?
  3. This whole process spoils the basic principle of net neutrality.  Smaller website and app owners who can’t afford to pay will be sidelined by bigger whales with deep pocket. There will be no level playing field for new entrants.
  4. Operators will push brands that pay them more, making other good services expensive to avail.
What can you do?
1 Spread awareness and voice your concern. Online or otherwise. You can share this post. Do tweet/post till it can reach decision makers and influence their decisions.

3 Tweet to companies like flipkart stating you won't buy from them if they don't opt out of schemes that violate the spirit of net neutrality.


Archana Chaurasia Kapoor said...

whoaaa!!! Robbing in broad daylight!!!! I keep getting messages saying that my speed limit for x no of bytes has crossed its limit and I should pay y amount to restore speed. I never do that because I dont care, but its surely very annoying.
Very informative post Shrinidhi. Thank you for sharing! :-)

Shrinidhi Hande said...

Thanks for your kind words. Do spread the news

SR said...

Excellent viewpoint, Shrinidhi.

At the same time, some "journalists" are taking the opposite view.

It is clear from comments of that article that most users are pro-Net Neutrality.

Shrinidhi Hande said...

Thanks SR...

The wild said...

Have you tried BSNL ?Ofcourse you might have to invest slightly higher in a yearly contract depending on location but even then beats all others handsdown

Shrinidhi Hande said...

Yes, I have BSNL broadband
Hope they don't change like Airtel

Technophilo said...

Is it not similar to DTH services asking to pay more for each pack like south, north or sports even after having basic pack? Hopefully Internet will not become such a thing in future.

I too wrote a similar post just to make sure everyone understand what actually net neutrality is all about.


Shrinidhi Hande said...

There's lot of public awareness now. I am sure TRAI and airtel will take notice

F-Munna said...

Excellent viewpoint, clearly understand net neutrality now.

Shrinidhi Hande said...

THanks Munna