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Indian Libertarians

Net Neutrality: Where we disagree

smehra Thursday April 16, 2015

Net Neutrality debate has surged in India in the last couple of days and it pretty much went as I expected: there was no debate. Public will run to defend anything if it is marketed as “neutral”. Doesn’t matter if they fully understand the ramifications of it. Maybe I should market my position as being neutral too. Maybe I should call it Market Neutrality. But garnering blind supporters is hardly my goal here. So if you don't have time, I ask you to go over to Save The Internet site and blindly send the mail to TRAI. After all who can be against something titled “Net Neutrality”.

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To me Internet has always been about being “neutral”. It was the Internet’s biggest selling point. It is the reason why Internet has trumped radio, TV and all other forms of communication. On TV you cannot see what they don’t show you. Your choices are limited to a small number of channels and what their editors want you to see. On the Internet you have freedom to sail anywhere and watch what you want. It has also provided more reach for small scale content producers. To me if that is not the service you are providing, it is not the Internet. “Non-neutral Internet” is therefore an oxymoron. I don’t want my broadband provider to tell me what to access and what not to access (neither do I want the government doing that, but that is a different matter). But I also realize that I do not have an “inherent” right to the Internet.

Rights become meaningless if you start calling anything you personally want as a “right”. I recognize that Internet comes to my doorstep not by magic or because I have some mythical right, but because someone has invested capital in infrastructure that has allowed them to connect me to the Internet. Those "someones" we call the ISPs. The much hated industry as far as Internet domain is concerned. But just because you don’t have an “inherent” right to something doesn’t mean that you won’t get it. And just because you have been declared to have a right to something, doesn’t mean that you will get it. Food security bill has granted us an “inherent” right to food at the expense of farmers (the producers) but hunger isn’t eradicated. We have provided Internet to 300 million people in India without declaring it a right and the rate of increase is growing. Surely there is a demand for a service that allows you to “neutrally” connect to anyone you wish to. And surely this is the service we buy when we buy broadband services.

However, net neutrality debate is not about having a neutral access to the Internet. It is about restricting how the infrastructure, that the ISPs have invested in, can be utilized - and how much say an ISP has in it. The simple question is: Can there be other forms of special service packages besides Internet.

Surely no one is advocating that “neutral” Internet be removed as a service on the market. Looking at the demand for a “neutral” means of communication one can see why market would tend to provide that service. Take, for instance, the Blackberry Messenger. During the time it was popular, BBM was offered by various network providers as an “OTT” service. Sure, Internet was theoretically accessible - all the Telecom providers did was to restrict access to BBM service for a cheaper price. Usage-wise, it makes little sense. Why would transmitting data over to other sites be any more costlier than, say, transmitting a picture over BBM? If that is true, why would it even be profitable to restrict this access?

This is one of the biggest fallacies that plagues the economic thinking of most people. It is not the cost that determines the price, but the price that determines the cost. Nothing has an “inherent” cost to it. It is the consumers that put value to a consumer good that is reflected on to the producer goods. BBM venture was profitable in an era of slow Internet speeds and Android-less phones. It isn’t any more which is why you don’t hear about BBM.

But net neutrality was not destroyed just because BBM was being offered. Surely you could buy Internet from your telecom provider if you wished to access Internet in a “neutral” manner. But you could also buy specific packages that allowed you to pay less and access only BBM. The reason for this was that there was enough demand for “neutral” internet to keep it coming. But there was also enough demand for BBM only packages, which also kept coming. When consumers could afford the complete Internet package, when speeds increased, when we got to enjoy the completeness of Internet over linux enabled smart phones, we stopped buying these packages and that marked the beginning of the end of BBM. This is the market. This is its neutrality.

People usually compare “neutral” Internet to phone networks. A phone network provider should not care who you are calling to. And if that is the kind of package you have bought, that is what you should get. Any violation of this contract should be brought to Justice. But they also offered Closed User Group (CUG) packages for colonies, corporates etc - where you could pay less for calling within the group. That was also my choice to buy or not to buy. No one has even heard of these kind of packages today because calling has become dirt cheap.

At this point many people will say: Aha, but ISPs don’t pay extra for providing access to Google or Flipkart if they are already providing access to BBM or other OTT services. Yes, they don't. But what you are ignoring is that the reason such OTT services were cheaper in exclusion (such as BBM) was because these OTT service providers were paying on behalf of the consumer. They were investing capital into the ISP industry. Banning of these services could only mean one thing: This capital will no longer flow into the infrastructure of ISPs. Capital which is much needed to improve our net speeds.

This capital investment would also be needed if we are to provide Internet in places where there isn't any or in places where people cannot afford access to “complete” Internet. If someone cannot afford the complete Internet package for Rs 500, he may be able to fit BBM-only (or Flipkart-only or Twitter-only etc) package for Rs 200 into his budget. This way popular services could have a chance to reach the poorer section or simply those money conscious people who wish to use the Internet for a very specific purpose. It seems unfair and illogical to stop this transaction from taking place. Not only will this allow capital from marginal buyers to enter this sector but also fuel the increase of Internet penetration.

Coming to the Airtel Zero plan, from which Flipkart was “bullied” into pulling out. It was going to be offered as a package alongside your usual 2G and 3G data packs for people who do not wish to pay for those specific services but want them - and don’t want access to any other service. No one is destroying 2G or 3G here. No one is threatening your usual subscription to your ISPs. It was a harmless package, much like BBM, that allowed some specific services to reach people who could not afford to pay for the “neutral” Internet. People who give you “missed calls” because they are on a strict budget. Shame on those who have nearly killed this. Net neutrality “movement” has truly been a “middle class” privileged movement, that only cares about getting full access to the Internet - others be damned. The scare tactics used by this movement are almost nauseating with the entire “internet” acting as if their usual plans that they pay for will be replaced with Airtel Zero.

At least something good came out of it. Backed into a corner, Airtel had to resort to its Ace in the hole. After enjoying years of being a beneficiary to government’s monopoly over spectrum and “public” property, it now gives this statement:

 

“We believe that in the guise of net neutrality if we’re starting things that suggest neutrality, then next step would be to abolish licensing regime, and get on a free for all, in such a case, there is no need for companies to pay high premia for spectrum”.

Funny, this is something that I have been saying all along: That Spectrum allocation is simply a taxation on the consumers. True neutrality cannot be built upon cartelized Internet. Maybe Airtel said this to take a “jab” at net “neutrality” supporters, but I mean it seriously.

 

Real threat to the Internet does not come from those who build its infrastructure for us, but the government. It has always been the case. Net neutrality comes under threat when the government regularizes “fast lanes” making it impossible for an ISP to survive without resorting to it. Internet was not “neutral” because government made it so - it was “neutral” because it is the consumer’s choice. It comes under threat when government runs itself as an ISP and attempts to run down other companies with its hand in tax money. It threatens the Internet when it installs kill switches. It threatens the Internet when it listens in on the data being transmitted. It threatens the Internet when it censors due to lack of property rights. And finally, it threatens the Internet when it restricts capital flow into ISP sector by it’s so called net neutrality. Net neutrality cannot be enforced by the government. Government is never neutral.

Net neutrality advocates give useless analogies like “You pay your buffet base money, you go ahead and eat what you want, not what the waiter has to force you to choose.” No, unfortunately this is not all what net neutrality advocates are saying. They are saying that even if you want just the sweet dish the restaurant owners must be forced to offer only the complete Buffet. Unfortunately those who could afford only the cheap ice cream must now do without it.

PS: My views are mine alone. Not a representative of any organization I may be associated with.

PPS: Only Constructive criticism will be allowed in comments section.