The Telecom Regulatory Authority of India (TRAI) has once again put itself on the side of the freedom of the Internet. Its recommendations (which will have to be approved by the government) define Internet Access in the broadest of terms, and make it very clear that an Internet Service Provider (ISP—the data connection you use, like Jio or BSNL) cannot discriminate between websites or mobile apps that are accessed through it, essentially enforcing net neutrality.
How does this translate to a free Internet? Let’s go back a few years. In December 2014, Airtel introduced what they called Airtel Zero. Under this plan, Airtel would provide free access to its subscribers to certain websites and apps. The cost of browsing the websites that fell within the plan would be paid by the websites themselves. It seems innocuous enough, but as even a pretend-economist will tell you, there is no free lunch.
So what was the catch here? If websites could pay their way to the ISP’s heart, then the more established companies will buy themselves preferential treatment, and newcomers like start-ups (say, a fledgling e-commerce portal) will find themselves not even able to get onto the field to battle a Goliath like Flipkart, because Flipkart could eventually pay a hefty sum to be the sole e-commerce company on the plan (Disclaimer: Such exclusivity was not in Airtel’s plan, but is a logical consequence of such plans). Now a consumer will also be able to access the newbie e-commerce portal through the plan, but since she’ll have to pay extra, she might likely not.
Or take Reliance Jio, which was widely thought to be looking to replicate the model by luring customers in with cheap data plans, and then offering them their own bouquet of in-house offerings for free (Remember that Network 18, which owns brands ranging from the TV 18 group of channels—both news and entertainment, digital news outlets like Firstpost and Moneycontrol; Bookmyshow, Yatra, Viacom Motion Pictures, and so on, are controlled by Mukesh Ambani-owned entities).
But if it’s free for the consumer, what’s the worry? Ponder how the website in question could distort the market. Assume it is a news channel which now pays to get preference over all other news channels. Because it is free for the consumer, the average consumer will naturally prefer it over its rivals. Soon, the said news channel would have a disproportionately large share in the market, not because of high quality programming (or even pandering to the audience) but simply from paying its way there.
With the new-found popularity among viewers, it will be honey to the advertiser-bees. With more advertisement, the said channel will now have a huge advantage over its competitors to the point that these competitors could virtually get eliminated from competing.
Mind you, the analogy is not a media company which has invested in a huge distribution system to increase its reach. It is, on the contrary, a media company that has paid its way into a position where it is the only one that is capable of such reach, thanks to everybody else being deliberately held back. Or imagine a race where some of the athletes have to run with a heavy sack tied to their waists.
Airtel withdrew the plan after a PR backlash. But the idea refused to die. Soon, Facebook introduced a plan, Free Basics, which wanted to give the Internet free to all users provided they signed in through a Facebook account. Now what could be the catch in there? A very minute reading of Facebook’s Terms of Service would tell you that when you access Facebook, you allow Facebook to not only track your activities on Facebook, but even on your browser outside of Facebook.
Now, as we know, Facebook gives its services away for free. In return, it monetises the data collected from your browsing activities (with your consent), and sells it (in a non-identifiable format, it will strenuously tell you) to advertisers and other companies that might want to analyse your habits. You would be surprised how much companies can glean about you simply by analysing your browsing, information which they can then use to target their sales efforts at you.
For example, during an election season, people of different political persuasions see different types of ads. With Free Basics, the social media giant was getting access to data from a section of the Indian population that would never use the Internet otherwise—data from the rural heartland, a veritable trove of data that has never been mined before. Free Basics was nipped in the bud by an earlier TRAI recommendation.
Tuesday’s recommendations have effectively shut out any of these unwelcome practices from returning to the Indian telecom market in the near future.
And it is all the more commendable as it comes at a time when the US is all set to reverse Obama-era policies enforcing net-neutrality. Already, American ISPs such as Comcast are said to be readying plans to create fast-lanes for certain services to get preferential access. For example, Netflix can hypothetically pay for faster speeds for subscribers streaming its movies. Effectively, Amazon or HBO, its rivals, will be forced to also pay up because its subscribers are not going to endorse a not-as-fast service.
Make no mistake. Few of our economic sectors enjoy perfect competition. But in an area that could drastically define the future of all business —the Internet—there can be no argument that the Internet should be free.
Abraham Mathews
Advocate who practices in the Supreme Court, and also a chartered accountant
Email: matabrahamc@gmail.com