Net Neutrality: Implications on Business Markets and the Law

Author: Meenal Gupta, final year student of B.Tech in CSE with specialisation Cloud Computing at Galgotias University. She is also a Research Analyst

One basis for promoting and never going against Net Neutrality is that it will retain freedom of speech. In an era where everything involves some sort of prevention or restriction, it is of utmost importance to have one space left where there exists where one can deliver and consume content without limitations and the rate at which this content exchanged.

According to Columbia Law School Professor, Tim Wu, the best way to explain network neutrality is as when designing a network-

“that a public information network will end up being most useful if all content, sites, and platforms are treated equally.”

In a time where multi giants are gaining a monopoly, there is a call for startups to gain individual power and have access to resources like the ones already established. Their competition will decide the best value for money. India, being a hub of upcoming innovations and of stepping into being a part of the dynamic power structures, net neutrality is its tool to breed entrepreneurship. Content restriction is not dangerous in its own but the Internet Service Providers (“ISPs“) being given the power to alter and vary the current operating speed of different websites is equally a fall from being net, neutral. All of this boils down to imposition a higher cost burden on customers for Over-the-top (“OTT“) services that ISPs would impose depending on their collaboration with its different partners and companies. This Blog Post addresses implications of Net Neutrality, starting with its debate and later moving on to highlighting the necessity of these principles in the World Wide Web

India’s telecom companies were lobbying the Telecom Regulatory Authority of India (“TRAI“) to enact a regulation in a way that will change the way Indians are using the internet forever, Telecom Operators are actively seeking after Net Neutrality.

Net Neutrality means:

  • All content is equal and all sites must be equally accessible.
  • All content on the internet is equal and MUST BE equal always.
  • Once you have an internet pack, then you are allowed to access any website without discrimination.
  • No matter what telco operators you are with, you should be able to access data on the internet at the exact same speed.

The adverse practice and observation of Net Neutrality took its first flight in 2002 when a survey of operator practices were conducted in the United States. Several problems regarding discrimination of content/access material were reported from consumer complains about the operator in charge, of the distribution of a class of application and equipment. The complaints against the operators and the ISPs were with reference to a ban of applications and information from the source pool of the same during the distribution over the network, servers, virtual private network, Wi-Fi and in fillings at Federal Communications Commission (“FCC“) by application developers. The operators implemented significant contractual and architectural limits on certain applications which reflected the tendency to ban new and emerging applications due to the network attachments with internet in price discrimination. Operators pursuing legit goals were certain behind this practice- price discrimination and bandwidth management. Furthermore, this was likely to distort the market and future of application development.

Internet.org is a partnership between social networking services company Facebook and six companies (Samsung, Ericsson, Opera Software, Nokia and Qualcomm) that plans to bring affordable access to selected Internet services to less developed countries by increasing efficiency, and facilitating the development of new business models around the provision of Internet access. The app delivering these services was renamed “Free Basics” in September 2015. As of November 2016, 40 million people were using internet.org. Internet.org has been criticized for violating net neutrality, and by handpicking internet services that are included, for discriminating against companies, not in the list (including Facebook’s rivals). In February 2016, regulators banned the Free Basics service in India based on “Prohibition of Discriminatory Tariffs for Data Services Regulations“. TRAI accused Facebook of failing to pass on the four questions in the regulator’s consultation paper and also blocking access to TRAI’s designated email for feedback on Free Basics. On February 11, 2016, Facebook withdrew the Free Basics platform from India.

Since the concept of net neutrality contends for free and equal access over all content on the internet, pertaining to small startups or big business companies. This technically means that it upholds the principle that everyone should be able to communicate freely online. By offering equal access and ability to get your website and content in front of the same audience, it levelled the playing field for everyone, from startups and freelancers to small business owners.

The topic of ―net neutrality came to spotlight in India in December 2014 when Airtel, a mobile telephone service provider announced the additional charges for making voice calls from its network using apps like Whatsapp, Facebook, Skype, etc. However, the issue of net neutrality started creeping in 2006 itself when TRAI published a paper on it by inviting options from stakeholders whether regulatory inventions are required or left to market forces. Bharti Airtel’s Director of Network Services, Jagbir Singh in July 2012, recommended that large Internet companies like Facebook and Google should contribute a part of their revenues to telecom companies. According to him, Internet companies were enjoying huge profits from small investments, whereas the telecom companies were actually investing in building networks. This move of Airtel faced harsh criticism on social networking sites due to which later on 29 December 2014, Airtel announced that it would not be implementing planned changes, pointing out that TRAI would be soon releasing a consultation paper on the issue. On 27 March 2015, TRAI released a consultation paper on over-the-top services (OTT) and net neutrality for public feedback. The last date for submission of comments was 24 April 2015 and TRAI received over a million emails. Another scheme that violates net neutrality is the launching of Internet.org in India with Reliance Communications by Facebook in February 2015 that aims to provide free access to 38 websites through an app. To add to this list, in April 2015, Airtel announced ―Airtel zero, a scheme under which if an app contracts with them, Airtel will provide that app free of cost to the customer. Flipkart decided to join the scheme but pulled out of it, due to negative response from the public and being criticized for its action. All these schemes have time and again breached net neutrality in India.

Startups in India are bringing back the culture of starting a core development of a product/service/application from ground level, then galvanizing the same to keep up with the economy and the globalization. It is indeed the start of a new wave of the culture of innovation. The true beauty of this blooming force is that does not involve heavily expensive resources or capital. Rather, the internet in its wholesome form is the source and weapon of something that could potentially be extraordinarily strong. The introduction of the government’s Digital India initiative, hand in hand with the increasing internet penetration over the recent years, has resulted in the country’s digital population amounting to approximately 892.3 million active users as of January 2018. The traffic in the world’s second largest internet market at this stage was shared equally by broadband users and mobile internet users.

Digital marketing is evolving with the transfer of control from the middle operator to the hands of the business owner. The absence of net neutrality will do to the newly formed market of digital advertisement owned by the business owners themselves. Digital marketing has entered every segment leaving no significant use for a middle channel. Prior to this evolution, the middle man i.e. the media, newspaper, TV channels were the source and way to advertise and market any given specific product/service. However, now the increased digital access has paved a way to an increased awareness with a better understanding of brands and business owners, among the audience. When the middle man was used for the digital marketing or otherwise, it came with their tendency to set rules that would in some way curb the openness and creative independence of the business owner of a small startup to come out in a way they would want. However, now that the owner is in the market knowing and growing in sync with its audience, the open free internet provides a level playing field to smaller funded companies as well as counterpart business giants.

Digital India Plan is the blueprint of the current movement and speaks extensively of the vision for Digital India. The government is pushing forward for India to be digitally empowered. The plan aims at provision of government services accessible and receivable digitally, considering public accountability by the direct delivery of services. Digital India is a plan that would prepare India for being an automated nation that would function as technology-based governance. It would be a synchronized engagement with the Central and State government providing equal opportunities to all, digitally connecting them. It is noteworthy to highlight the need that the governments aim of providing “high speed” internet be assumed to be in sync with net neutrality because what purpose even does filtered content fulfil when the demand today and always should be a free and open pool of information. If all the 2.5 lakh Gram panchayats have the internet provision but they have to pay the price for accessing websites on it then what’s the use of such facility made available to them? There is a yearning need to ensure net neutrality so that the benefits of internet services reach each and everyone enabling everyone to freely explore the digital world towards his use and development.

Evolution and revolution of the current set of ideas are only possible if the freedom of using any/all information available online. Digital India Plan without net neutrality would have no protection when any small business would want to flourish and compete with a giant company because there will always be ways to curb the smaller ones with those with deeper pockets. Protection of innovation is possible when startups and big companies are set in the same level playing field. This is how will there be an economic justification when we wouldn’t be paying for mediocre services which would be just a product of monopoly subsiding creativity.

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