Net Neutrality

Net neutrality is
the concept of treating the Internet Services as a Public Utility
similar to electricity, water or gas supply.

Net neutrality is
endorsing a view to treat all data on the Internet at par without
discriminating or charging differentially irrespective of user, content,
site, platform, application or instrument

The term “Net
Neutrality” was coined way back in 2003 by Timothy Wu, a professor at
Columbia Law School in his paper “Network Neutrality, Broadband
Discrimination”. The Paper by Tim Wu rooted for neutrality among
applications, data, quality of service and also proposed some sort of
legislation to deal with these issues.

Though this concept was
coined in 2003 and has become part of legislation in many countries
since 2010. In India, the hue and cry began only in December 2014, when
one of the telecom operators announced additional charges for making
voice calls on its network using apps like WhatsApp, Skype, etc.

To
clear the prevailing confusion, in March 2015, TRAI released a
consultation paper on Regulatory Framework for Over-the-Top (OTT)
Services. The consultation paper was heavily criticised in all quarters
for being one sided and not having clarity in many areas.

Let’s
understand what this hue and cry is and how it is affecting content
companies like YouTube, Facebook, Skype etc., Vis network providers,
telecom operators, etc.

Though this concept was discussed all
these years, there was no pressure on either internet service providers
or telecom operators. However, with the advance of YouTube and other
video content companies, load on the network increased tremendously.
Similarly, photos and video on Facebook and other popular social media
sites too became all pervasive and miilions of MBs of content is now
being uploaded every day onto these sites. As a result, the internet
network started feeling the heat of overburden of content over
internet/telecom highway.

Most of the telecom companies argue
that they are investing heavily in internet highway and hence those
using this highway should either pay charges or share their revenue with
telecom/internet companies.

A major factor that has raised this
storm is the fact that social media companies with low investment draw
huge traffic and huge revenue from advertisements, etc., and as compared
to that, telecom/internet companies who invest heavily into
infrastructure and enable all those users to reach particular content
site get hardly anything.

One more factor which led to a dent in
telecom companies’ margins was the heavy fall in the number of sms
messages after evolvement of many free messenger apps. This was further
worsened by voice over internet protocol (VOIP) calls provided by
various apps, which has directly impacted the telecom companies earning
revenues from STD / ISD calls. This stream of revenue has literally
vanished after evolvement of these messenger apps.

Video content
sharing on almost all the social media platforms has put tremendous
pressure on all the carriage providers who are now reluctant to upgrade
their network capacity unless cost for the same shared by such content
companies.

In some quarters, arguments in favour of Net
Neutrality are cracking down as attempt to differentiate content from
network is not able to sail through.

Let’s understand this
problem from another angle. What if concept of Net Neutrality is not
there? Let us assume a life without Net Neutrality. In that scenario,
telecom companies will start charging content companies and will in turn
offer Sponsored Data or Free Data for such content companies over its
network.

Real trouble will start here when those content
companies with very little start up who are not able to share either
cost or revenue with internet/telecom companies will see lesser traffic
as these infrastructure companies will be partial to content companies
sharing cost/revenue as against those who are using their information
highway free of cost.

Recently, we are seeing free Facebook
plans by various telecom companies which are nothing but some type of
similar arrangement wherein telecom companies will be compensated by
content companies.

Now let’s analyse the entire scenario to understand as to who will gain and who will lose from this concept of Net Neutrality.

Presently,
without Net Neutrality, those content companies which don’t have to
share cost or revenue with infrastructure companies (which are heavily
burdened) are benefitted as compared to the infrastructure companies
which have to provide hassle free info highway which in turn pushes them
to invest more and more into towers and related infrastructure without
any corresponding increase in the revenue.

With Net Neutrality,
telecom companies will be further burdened to provide better information
highway which will require them to invest more and this concept won’t
allow telecom companies to enter into any arrangement of sharing cost
with or revenue from content companies for any sponsored data type
packages.

Now in last limb, let us understand how things will
worsen without this concept. In absence of any regulation of internet
highway, most telecom companies will enter into arrangement with content
companies for sponsored data and will not charge end users any fees for
usage of visit to such content companies. E.g., Reliance offering free
internet for Facebook or Airtel offering free internet for Flipkart.

Any
such arrangement will simply push users towards content companies which
are providing free access at the cost of new or low funded start-up
companies which many not be able to share cost or revenue with telecom
companies.

This can lead to a very big negative impact affecting
the whole internet revolution which started with free world wide web.
With all such sponsored data packages, telecom companies and content
companies can drive and decide as to what end user should read, watch or
listen.

To conclude, we can summarize that this subject is not
that easy to tackle. Implementing Net Neutrality can either kill
efficiency of telecom operators or their financial /economic viability.
With regulators and consumer forum just focussing on better quality and
better network and not addressing fallacy in revenue models of telecom
operator will hurt economy in long term.

On the other hand, the
risk of not implementing or regulating Net Neutrality may leave business
in the hands of large content companies and telecom operators, who will
mould, drive and drag users in the way they want. Such laissez faire in
the long term will choke the growth of any small content company whose
financial health cannot allow it to bear the cost or share the revenue
with telecom operators. Without Net Neutrality, users will lose the real
benefit of information technology revolution as they will be at mercy
of partial or biased approach of internet highway operators, i. e.
internet/telecom companies.

The whole world is exploring various
options for striking a balance between the two extremes. Most of the
western or developed countries which have implemented Net Neutrality are
facing tremors as veneer of this concept is cracking in the tussle of
carriage and content.

In long term, government, regulators and
industry bodies will have to come together and work for balance between
Net Neutrality along with reasonable compensation for telecom companies
who will keep pumping money into establishing and improving better and
better information highway. The next few months will prove very
interesting as the debate continues and the haze begins to clear.