Net Neutrality : A few thoughts

As someone who uses internet for bread butter and porn, this issue is pretty close to my heart. I see a lot of yuppies talking about net neutrality and claiming that “evil telcos” are planning something nasty. Here is a classic example of the propaganda from someone who seem to have achieved excellent in bullshit.

As usual exaggerated, unsubstantiated but sensationalist claims tend to resonate with common folks because finding facts and logic is hard.

Let us get the facts right one by one.

Telcos are not evil

Telecom companies are out there to make money and lots of it. They will use any policy that helps them make money. None of them are interested in harming anyone if that does not lead to their profit.

Telecom companies in India despite their poor customer service and shoddy billing have helped millions of Indian live a better life than the BSNL days. People today communicate more, earn more because of the improved telecom network.

We need to thank them.

Telcos against Net Neutrality

Telecom companies have purchased spectrum from Indian government at a very competitive price. When they were bidding for it, they did it with an assumption that they will make maximum possible profits out of it. Putting restrictions on the use of it would only mean betrayal. It is like selling a car to someone and after that person has paid in full, telling him that he cant drive it on roads of his choice.

Telecom companies are not per say against net neutrality. They want to maximize their profit. Contrary to what yuppies might tell you, telecom companies can not charge whatever they want. They can only charge what the market decides based on competition. If they could decide prices of calls and SMS they would have charged you Rs 5 per minute and not Rs. 1.

At the moment spectrum is scarce. If Airtel gives say 1GB internet for Rs 10 very likely the network will get congested pretty quickly. The very fact that they are charging very high for data shows the extent of this problem.

Clearly Airtel wants more and more people to buy their Data plans without congesting the network. Not many Indians can afford even Rs 100 for 100MB plan. However if Airtel makes it Rs 10 for just whats-app that can solve the problem by giving more poor people access to cheaper internet services (though selective) and relying on scale rather than price to increase profits.

This model has worked very well in India for shampoos, cold drinks and ice creams. It might as well work for internet.

What if we end up paying more ?

There is an unusual fear that is being created that if currently people are paying Rs 200 for 1 GB of unconditional data. With new modern plan people will end up paying Rs 50 for whatsapp, Rs 100 for Facebook, Rs 100 for Google and so on and when you add this up it will be above Rs 200.

This is unsubstantiated because in the current market with cut throat competition if Airtel is giving 1GB of data for Rs 100 then all its competitor too are doing the same thing. If Airtel’s “conditional internet” end up making internet more expensive very likely its customers will move to some other telecom operator.

Will it stifle startups ?

There was hardly any internet penetration 10 years back. Were not start-ups doing good at that time ? Now that we have more internet penetration startups should only benefit.

But the greater point here is that the current crowd which is using pure data, will continue to use the same may be at higher prices. But a large percentage of people who are not using data will start using internet too because of lower priced plans.

This is a good news because now the market size will increase.

Why are people outraging then ?

People buy arguments that evil companies are out to screw us over. They do no apply their mind. But that is only part of the reason. With conditional-internet the “pro” users like me will have to pay higher because we will be using more spectrum than other ordinary users. It is in my interest to oppose Airtel’s move and force government to act.

But government is nothing but a brainless system. It is likely to come up with regulations that will benefit no one but those in power. Do not be surprised if government comes up with ridiculous plans which will make event lack of internet a better alternative.



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