Got a Page 3 in the Economic Times Today (Sunday – 19th April 2015) for my views on Net Neutrality. I think it’s a conspiracy. Please read, with a real life example I’ve provided:
What is this brouhaha about pro and anti-net neutrality? I assume you know what net neutrality is. It simply means that consumers should be able to access all web content at the same cost and terms without discrimination.
I believe that there is a deeper conspiracy of keeping the net anti–neutral:
The Disruption of Disruption:
In the year 2000, I was invited to a glittering event at The Regal Room (Trident, Mumbai) to attend the first ever ‘Entrepreneur Awards’. I was not a nominee but was invited to be a part of the audience.
I was seated at the “Zip Fone Table”. Zip Fone was this amazing new styled Phone Calling Booth that had started springing up all across the country. It was slick, clean and best of all had ‘video ads’ running in in the center of its chassis. Zip Fone was the disrupter of those shabby ‘STD’ booths we had, where call charges were suspect and the service really poor. This new phone service combined advertising revenues, aesthetics and transparency as a brand new service.
On the table was seated the founding entrepreneur of Zip Fone. When I asked him how he had spent his last year he said, “Alok, just signing term sheets after term sheets. There is so much investor money chasing me, I am on a non-stop money raising spree.”
Circa 12 months later. Mobile telephony kicked into the country with a bang and the Reliance Infocomm ‘Hungama Offer’ made every man, woman and unborn child an owner of a mobile phone.
Zip Fone was destroyed almost overnight, like one of the cars in the latest Fast & Furious movie. The landline business imploded faster than a death star. Mobile operators had disrupted Zip Fone, which was a disruptor itself.
Come 2015 and the very same mobile operators are on the brink of disruption by the untamable and ubiquitous Internet. Look at the penetration, usage and popularity of ‘WhatsApp’. A simple green buttoned app has the power to completely decimate the business of SMS (neat revenue source for mobile operators) and ruin the business of voice calls (their main revenue). Other Internet linked ‘apps’ yield the same power.
Net Anti-Neutrality is a conspiracy aimed at self-preservation. By making Internet access biased (more or less expensive), mobile operators are scrambling to protect their existence.
Nobody learns from History. And History repeats itself!
In the late ‘90s, two teenage boys proposed an incredible hypothesis: Every young person in the world had some kind of digital music stored on their PCs and always wanted to listen to more stuff. Why couldn’t they ‘swap’ music files between themselves (called peer-to-peer – P2P) and thereby not bother finding or buying music that they wanted? Note that the boys did not care about the legality of sharing IP or the fact that they were hijacking the official sales channel of music.
This simple, innocuous question posed by Sean Parker and Shawn Fanning became the fastest growing business in the world called Napster until it was brutally stopped in its track by heavy duty lawsuits brought out by the Recording Industry Association of America, the band Metallica and others.
This was a classical ‘knee jerk’ behavior of the big bully corporates who always felt threatened by innovation and chose to block monumental ideas rather than work with them.
While Napster was shut down, a few years later Apple introduced the iTunes service, which in many parts was inspired by Napster. Unfortunately most music companies had gone almost bankrupt by then and had no bargaining power in its creation. History would have been very different if these music companies had partnered with Napster and made it their own music distribution channel!
In the effort to make the net anti-neutral, I see the same ‘self destructive’ conspiracy emerging in telecom operators who just cannot come to terms with the ideology of the Internet and its players. Rather than blocking most players (by making them more expensive) they should partner them and re-invent themselves!
Mirror Mirror on the wall, who is the most neutral of them all?
What is being net neutral? Internet jihadis like me argue that there should not be any price discrimination for consumer access between two or more Internet services and it’s up to the consumer to decide which one she would like to use.
But to their point, mobile telephone companies argue that the massive costs of building infrastructure and their networks cannot simply be compromised by startups who become digital parasites; and by creating technology like WhatsApp ride on operator networks, hijack it and then squander its margins by giving away almost all telephony services for free.
The answer lies in the thin veil of disclosure. Does the consumer know the choices on offer or is the lure of ‘free’ vs. charged very subtly hidden away?
To illustrate my point, consider two friends who access the Internet using the same mobile network. Both friends are flying for their college reunion from the same city and meet on the plane. Both have used the Internet to book their flight tickets. When they compare costs, the lesser tech-savvy guy is shocked. He has paid 25% more for the same ticket than his friend. On inquiry he learns that the website he used to buy his digital ticket is really the culprit. He did not bother to check other sites because they were ‘not free to browse’ on his mobile phone unlike the one he used.
This is when net partiality rears its demonic head, because the participants of all things unfair will abuse their position sooner than later. And therein lies the undisputable case of having complete net neutrality.