Net Neutrality is a Must for Digital Democracy

Published: 23rd May 2015 06:00 AM  |   Last Updated: 22nd May 2015 11:06 PM   |  A+A-

For the first time, after Independence, we saw another struggle for freedom, an open war for equal access to the Internet, a call for net neutrality. Unlike the revolt of 1857, the massacre of Jallianwala Bagh, Salt Satyagraha and other events that led to Independence, this war is being fought online against over-the-top (OTT) service providers like Airtel offering zero rating plans.

On March 24, the Supreme Court upheld an individual’s right to express her opinion on social media in the Shreya Singhal vs Union of India case, striking down Section 66A of the Information Technology Act, 2000. Three days after the landmark judgment, the Telecom Regulatory Authority of India (Trai) uploaded a consultation paper on a regulatory framework for OTT services, inviting comments from people before April 24.

While the judgment was hailed as a reiteration of the freedom of speech and expression on the social network, the paper triggered a controversy, with some people from the telecom sector supporting the move and others launching a campaign for saving the Internet. For the first time, India Inc. stood firm and voted for net neutrality against some OTT service providers, who announced zero-rating plans for creating an online VIP culture.

As the name suggests, net neutrality implies a neutral Net. It underlines the principle that both Internet service providers and the government should treat all data equally, “irrespective of the content, application, platform or website or even the kind of equipment used to access the Net”. In other words, it does not allow any discrimination for any user nor promotes a differential system of charging users.

Imagine a situation where the top telecom companies are able to tie up with some giants operating in, say, retail sector offering free access to their websites. Take, for instance, Airtel in collaboration with Flipkart or Amazon offering access to its website, without charging a single paisa for data usage or Facebook’s offering free access to selected websites. At first glance, the idea looks fabulous.

Now think about other websites. They will provide free access to only a few selected websites, which have paid them huge amounts for giving them priority at the cost of other websites. What about small telecom providers, who will never be able to compete with the giants? Think about a person who recently floated a website for his new business, which is unable to pay Airtel, Vodafone, Idea, etc.

Considering the fact that people easily fall prey to what is given for free, a small or new businessman’s website will never get displayed, as people will have to pay for getting access to the site. It will not be easy for him to establish his business. Eventually, such Internet service providers (ISPs) will create two types of Internet—free and paid—with a few hogging the limelight, creating monopoly, hindering the freedom with which market forces operate and promoting what is prohibited under the Competition Act, 2002.

The Trai consultation paper made a strong case for regulating the OTT service providers, various apps and other content available on the web. Even the cost-benefit analysis of telecom and ISPs was mentioned—how various applications like Skype, WhatsApp and Viber have affected their financial position. The paper says, “WhatsApp’s subscriber base in India has risen to 70 million and it has a free subscription model. Hike messenger in India claims to have a subscriber base of around 35 million as of August 2014 sending 0.5 billion messages per day.” This has affected SMS traffic, which has fallen from 5346 million in June 2013 to 4367 million in June 2014, with financial implication to the tune of Rs 3700 to Rs 4000 crore per annum.

A similar anaylsis has been made about Skype and other applications offering calling services, though the quantum of loss shown is less than that from SMS. However, on an in-depth analysis of annual reports of major telecom ISPs like Airtel, Idea and Vodafone, it was found that the revenue from data usage has been growing with each passing year.

Even the data available on Trai’s website speaks a different story from what the organisation has narrated in its consultation paper. From June 2013 to December 2014, if a telecom operator had been making a loss of 29 paisa and Rs 4.29 per month per user from SMS and call revenue respectively, it has been making a profit of Rs 12.17 per month per user from data usage. The average revenue per user per month has risen from Rs 111 to Rs  118.44.

Now, let’s consider another plea of the telecom operators that they have to invest huge capital for purchasing spectrum. The fact is that the return on capital employed and the return on equity are way above what they would have got if they had kept the money in fixed deposits. In case of Airtel alone the ratios are 13 and 20 per cent (excluding foreign subsidiaries) respectively. Besides, the money has to be paid over a period of 20 years.

Prudence suggests the cost of an investment starts reducing once it achieves the break-even point—no-profit-no-loss position. It is highly likely that the revenue earned from such investments shall be much higher than the cost per user with each passing year.

The so-called gloomy picture painted by the telecom providers and seconded by Trai to present a case against net neutrality fails to impress. While Trai got a huge response from people favouring net neutrality, it had to face a lot of criticism as it displayed more than 10 million email ids (belonging to people who voted for net neutrality) on its website, opening them for spammers and marketers; something unexpected from an agency intending to regulate use or misuse of the Net. Be that as it may, the government is yet to announce its stand on net neutrality.

While free Internet access is likely to impress users in remote areas where people have minimal or no access, people like you and me, who like to check everything online, compare quotes even before purchasing an insurance policy, will be affected badly as we may no longer have access to the web service of our choice, if the telecom provider we subscribe to does not have a tie-up with that company.

Even Trai’s licensing policy shall give freedom to telecom providers to choose the kind of speed with which a website shall download. In a country where equality is the cornerstone of its Constitution, it will be highly unjust to create another avenue for crony capitalism, with telecom operators as the rent seekers.

For a government which has been promoting the idea of a Digital India, it’s not an easy task to vote against net neutrality. A lot of work has already been done in the US where the Federal Communication Commission voted in favour of net neutrality. The ball is with the Indian government to reinforce what the world is voting for—an unfettered world wide web.


The writer is a company secretary and director, communications, Deepalaya. Email:

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