Net Neutrality: Pros & Cons
Exponentially rising internet penetration is one of India's most remarkable achievements. The rise in the number of Indians who use social media platforms like Facebook, LinkedIn and WhatsApp have been widely debated around the world. The growth of e-commerce business in India has spawned many millionaires.
Some e-commerce ventures, however, are forming pacts with Internet Service Providers that question the very grounds of the principles that makes the web what it is today. If these pacts materialize, many websites would be blocked or accessible at a speed lower than regular, giving competitors an unfair advantage. But, the principle of net neutrality insists that Internet Service Providers must not block or give preferential treatment to individuals or commercial enterprises.
When the government handed out licences to telecom operators, such principles were not specified, leaving such matters open to interpretation. Internet Service Providers have been following this principle until it came under a threat. Now, certain ISPs have entered pacts with e-commerce companies, triggering a widespread debate. Over six lakh users flooded the telecom regulator TRAI with petitions against this move.
How would a violation of the principle of net neutrality affect you?
In the absence of net neutrality, a telecom company can influence which website you visit the most. This would be an infringement of freedom.
By allowing telecom operators to decide which site you visit frequently, you are giving up your right to make the most economical choice while shopping.
If many website take a long time to load, it would affect dissemination of information. Political parties and corporations can silence critics. This can have broader implications than we might expect.
Internet applications that offer free calls threaten the business of telecom operators who have been traditionally operating in this arena. Telecom operators will be able prevent you from using such applications.
In the absence of net neutrality Internet start-ups and entrepreneurs will find it more difficult to enter the market because they do not have the means to clinch such deals with ISPs. This can impede competition.
The internet will no longer be a treasure trove of data. This can lower the pace at which internet penetration is rising in India.
How would net neutrality affect telecom operators?
The biggest threat to telecom operators are free calling mobile applications. Such applications like Skype, WhatsApp and Viber are already threatening revenues of many telecom players. Voice revenues form more than 85 percent of total revenues in India where data usage is yet to grow.
Telecom operators have sent petitions to TRAI suggesting that it should regulate free calling applications. While it is mandatory that telecom operators should buy a licence and spectrum, such applications do not face such constraints
Telecom operators face less competition because the government hands out licenses to voice service providers. But, if mobile applications too offer this service, telecom operators would lose their competitive advantage.
TRAI has published a discussion paper on the possibility of regulating free calling services. However, many such service providers are not Indian companies. The paper has invited much criticism.
(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)