Making more money from the internet

Apr 07, 2015 Editorial

On December 25, 2014, Airtel, India’s largest mobile operator with over 200 million active subscribers dropped a bombshell: it wanted to charge customers extra for using services like Skype, Viber and Google Hangouts even though they had already paid for Internet access.
If customers wanted to use a service that used Internet data to make voice calls – something known as VoIP – they would need to subscribe to an additional VoIP pack, the company said.
Airtel was double-dipping and customers were furious. The tweets flew thick and fast. In less than four days, Airtel backtracked on its plans. It would wait, it said, for a consultation paper about net neutrality that the Telecom Regulatory Authority of India (TRAI) would publish soon.
Net neutrality sounds like a scary term but what it means is simply this: on the Internet, all bits are equal. What you do with the data you pay for – watch a YouTube video, send a WhatsApp message or make a Skype call – is entirely your prerogative. In an ideal world, your Internet service provider should not prioritise certain kinds of bits over others.
A neutral Internet is a utility like electricity – if your power company, for instance, doesn’t have a say in how you use the electricity it provides, why should an Internet service provider get to decide what you do with the bits you pay for?
Right now, thanks to the rise of apps like WhatsApp, which eat into operators’ SMS revenues, and video-streaming services like YouTube and Netflix, which consume massive amounts of bandwidth, these principles of openness and freedom are being challenged around the world.
In the United States, for example, video-streaming service Netflix was forced to pay Comcast, the country’s largest Internet service provider, to retain its access to consumers or risk being throttled. The US Federal Communications Commission (FCC) only recently voted to regulate broadband as a public utility – no splitting the Internet into fast and slow lanes as operators had wanted. The FCC was promptly sued by the United States Telecom Association, a trade group that represents some of the country’s largest Internet providers.
Indeed, the paper begins by classifying everything on the Internet as we know it – Skype, Viber, WhatsApp, Snapchat, Instagram, Hike, Amazon, Flipkart, Ola, Facebook Messenger, BlackBerry Messenger, iMessage, online games, music streaming services like Pandora and more – as OTT, telecom industry jargon for “over-the-top” services.
“It’s ridiculous,” says an Indian administrator. “All these services are the whole reason why we pay these service providers for Internet access in the first place.”
So how will having a non-neutral Internet affect you? For starters, you can say goodbye to paying a flat fee for using a certain amount of data each month and accessing whatever you want. Your Internet will be sliced up into “packs” – extra money for a YouTube pack, for instance, another charge for a WhatsApp pack, another to access Google search, and on and on it goes.
It’s important to remember that it’s not just telecom companies that are interested in a non-neutral Internet in India. According to the TRAI consultation paper, 83 percent of India’s Internet users access the Internet from their mobile phones. This massive audience is crucial for multi-billion dollar corporations like Twitter, Facebook and Google.
In February, Reliance Communications and Facebook partnered to launch Internet.org in India, a service whose ostentatious aim was to bring the Internet to the next billion people. In reality, Internet.org grossly violated net neutrality by offering free access to a handpicked list of websites and social networks for free, while making users pay for others; Google bundled free data with its Android One phones; and WhatsApp tied up with multiple providers across the country to provide “WhatsApp Packs.”
Right now, businesses and companies are free to operate whatever services they want over the Internet. “Features become full businesses,” says one entrepreneur. “That freedom will get constrained by this approach to maximise revenues by restricting. Telecom operators should be seeking to maximise revenues by making us use more of the Internet. They’re slicing the pie instead of growing the pie.”

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Making more money from the internet

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