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Friday, 17 July 2015 00:00
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That’s the real lesson from the net neutrality report


The battle, and that’s really what it was, between the purenet neutrality camp and the telcos has been a bitter one involving a combination of moral principles—having either ‘walled gardens’ or ‘gatekeepers’ will destroy the internet, a creature of freedom—and practices followed in various countries like the US. But, as the DoT committee report on net neutrality says—in line with FE’s stance since the battle broke out—‘the puritan view of Net Neutrality has practical limitations and it does not work in the real world’. India’s internet connectivity, unlike in countries like the US, is based almost entirely on what private mobile phone players have built; so, if they are to be hit, so will the provision of telecom services to 40% of Indians who do not have even voice services and 88% who do not have data services. As the panel puts it, ‘the over-reliance on mobile as the media for internet connectivity has public policy implications in so far as the approach towards Net Neutrality and investment in infrastructure is concerned in comparison to other countries’.

Which is why the report is far from perfect, and it gets its arguments—both for and against net neutrality—mixed up. If Airtel Zero-type products have to be judged—as being compatible with the principles of net neutrality—on a case by case basis, why isn’t the same privilege accorded to Internet.org which has been outlawed outright? And if paid prioritisation is a strict no-no, why are ‘managed services’ which are highly prioritised okay? Because, as the panel points out, managed services are the lifeline of businesses and services like the IT industry—it’s curious that Nasscom should have supported pure net neutrality since its lifeline violates every principle of net neutrality. It is the same lack of uniform approach that informs other parts of the report. So, the report cites the investment made by the telcos—R7.5 lakh crore so far, and another R5 lakh crore over the next 5-6 years—to justify why pure net neutrality has to be eschewed. A pricing arbitrage of 12.5 times is cited in the case voice calls migrate to, say a WhatsApp voice—this goes up to 16 times in case SMS gets replaced by WhatsApp. This is a powerful argument for licensing WhatsApp/Viber type of VOIP services for local and national long distance calls, but why is the same logic not extended to WhatsApp messenger services or to international calls? Because, in the case of the latter two, the user base is already very high —in other words, there are customer benefits to be had and, in any case, the train has already left the station.

While that does make the report look odd—a final decision on it will have to wait till Trai submits its recommendations—the fact is that India both needs to benefit from the advantages the app economy is providing while, at the same time, ensuring the internet  gets built out; essentially, it is about balancing various interest groups. The unalloyed net-neutrality approach, it has to be acknowledged, would really have benefited just a tiny fraction of Indians who have both broadband access as well as smart-phones. The DoT report would have been very different had, as in the US, the country’s broadband infrastructure been primarily a land-line one—spectrum shortage is a very important technical reason for why pure net-neutrality is a mirage—and if it had already been built out, and paid for by the government. Till those criteria are met, it is foolish to blindly ape US principles on net neutrality which, it must be kept in mind, are both evolving and are under legal challenge.


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