Net Neutrality - A Novice Perspective

8/19/2019 Net Neutrality - A Novice Perspective

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Project Report on:

NET NEUTRALITY

Subject: Management Information SystemsSubmitted to: Dr. Abhishek N. SinghInstitute of Management Technology,Nagpur

Group No: 8 (Section F)

Nikhil Gokhale 2015349Nitesh Girdhar 2015350Nitesh Roy 2015351Pankaj Ahlawat 2015352


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Net Neutrality, two most prominent words of 2015, in India. Agitations, online petitions, laws,reversal of laws and lot of chaos happened in our country over these two words. So, what exactlywas net neutrality? Why were so many Head Honchos and ISP giants against it? What wasFacebook ’s contribution to the entire fiasco? The following report shall help the reader tounderstand the basics of the topic, enlightening the reader on the above mentioned points in a way

best suited as to why every individual in India would have suffered it TRAI wouldn’t have passedthe new law.

So what is Net Neutrality?

Net Neutrality-

Definition- The principle that Internet service providers should enable access to all content andapplications regardless of the source, and without favouring or blocking particular products orwebsites.

Net Neutrality also known as network neutrality, Internet neutrality or net equality is the principlewhere ISP and governments should treat all data on the internet equally without discriminating iton the basis of user, content, type of communication, attachment or the origin of the website. It isgaining huge support all around the globe as the users want all the contents on the web to beavailable to them without being differentiated on the basis of being charged differently. Netneutrality is an important component of “Open Internet”. Open internet means every content onthe internet should be freely available to every internet user and can be operated on easily andaccessed by every individual or company. Net neutrality is against the concept of bandwidththrottling (diverting traffic to a particular network) and rate limiting (rate at which traffic is sentto a network). Issues pertaining to net neutrality are-

1. Discrimination by protocol- It is the process of favouring or blocking information basedon type of protocol being used for communication.

2. Discrimination by IP address- Originally developed to filter malware is now used todiscriminate between different types of data.

3. Favoring private network- This is what free basic is all about.

So what was Facebook ’s contribution to the fiasco? And what is this free basics?

Free Basics:

Free Basics introduced by Facebook provides people with easy access to limited services on theirmobile phones in markets where internet access may be less affordable.

Internet.org which was launched earlier in August 2014 was renamed as Free Basics in September2015. According to Facebook, it provides an open platform that gives Indian developers theopportunity to make their services and websites available free of cost to those who cannot afford

http://www.business-standard.com/search?type=news&q=Internet.orghttp://www.business-standard.com/search?type=news&q=Internet.org


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internet access. However, this free access is limited to partner websites and applications. It waslaunched two years ago globally in partnership with Samsung, Ericsson, MediaTek, OperaSoftware, Nokia and Qualcomm.

The websites are available for free without data charges, and include content on things like news,

employment, health, education and local information. The main motive of free basics is byintroducing people to the benefits of the internet through these websites, to bring more peopleonline and help improve their standard of living.

Mobile Operator Partnership Program:

Free Basics provides Mobile Operators with a sustainable program that addresses each step of thenew subscriber journey. The program begins by educating people on the benefits and value of theinternet. Initially it is free for till he understand the internet and are engaged, this initiative would

help their partners to sustain their new users — over 50% of people who use Free Basics pay fordata and access the broader internet within 30 days.

They provide a robust infrastructure to the operators which makes it easier for them to completethe integrations and technical work required to launch Free Basics on their network.

Free basics in India:

Facebook launched the initiative in India in February 2015 by partnering with RelianceCommunications. RCom offers the Free Basics service under a ‘Freenet’ button on mobile phones.

It started with free access to select 33 websites across Gujarat, Maharashtra, Andhra Pradesh,Telangana, Tamil Nadu, Kerala and Goa. This was subsequently increased to 80 websites.

Free Basics Violates Net Neutrality

Ultimately decided by TRAI that Free Basics violated net neutrality by essentially creating a"walled garden" in which Facebook would control who could get in. Facebook, a longtime netneutrality supporter, has argued that some Internet is better than no Internet and it in no way seesFree Basics as a violation of net neutrality. Charge customers higher rates for VOIP services. Byusing free basics customer will be able to access to small subset of internet which is against the

objectives of Net Neutrality. Customer won’t be able to access that aren’t approved by theFacebook itself.

India and Net Neutrality:

India, a country with 400 million internet users. Differential pricing for each website or internetservice provided could cause a huge hike in the revenue of the Internet Service Providers (ISPs).


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Currently the leading ISPs in India (according to internet subscriber base) are: Airtel (82.59Million), Vodafone (66.84 Million), Idea (37.17 Million), Reliance (35.56 Million) , BSNL (32Million) [1] . It is a clear picture that with a small decision of differential pricing could cause hugeimpact on the revenue models of the ISPs. ISPs like Airtel, Vodafone and reliance did actuallyvouched for this differential pricing in the name of covering up their operational expenses andlosses incurred due to VoIP apps like WhatsApp and Skype and lowest tariffs around the globe.But these claims were proved to false by various industry experts and the economic head honchos.

In February 2012, at the World Mobile Congress held in Barcelona, the CEO of Bharti Airtel, SunilBharti Mittal suggested that services like YouTube should pay an interconnect charge to networkoperators, saying that if telecom operators are building highways for data then there should be atax on the highway [2] . They also claimed that the websites like YouTube and the like wouldactually take a lot of data and the users would ultimately complaint to the ISP regarding the unfairconsumptions. Profit sharing with Facebook and google too was one of the suggestions of Directorof Airtel. As a result of debate Skype was termed as illegal in India by V. Srinivasan, Chief GeneralManager, BSNL (AP) [3].

Come 2014, the Telecom Regulatory Authority of India (TRAI) abolished the claims of ISPs for profit sharing. However by the end of the year, Airtel had actually introduced plans to exclude theVoIP data from their internet packs and tried to charge extra for per KB consumption by the users.This was done as there was no preceding law under TRAI for charging differently for differentapp usages. However, succeeding this there was a huge media outburst and retaliation towardsAirtel on social networking sites like Facebook, Twitter and Reddit. Looking at the lucrativemarket in India, in February 2015 Mark Zuckerberg, the CEO of Facebook brought about an ideaof FreeBasics in India along with Reliance. Although this sounded like an initiative to avail internet

services to the common man and the rural population it actually came with a flaw. The flaw being:

1) Limited number of sites could be listed to the free internet bookmarks,

2) Facebook gets to choose which site shall be on this list,

3) the content on the websites would be the lite version i.e. no videos, photos would be present onthe websites.

4) the users first have to log on to Facebook and then only they’ll be able to avail the services ofFreeBasics.

With the dawn of 8 th February 2016, the TRAI launched its official law saying: the ISPs cannothave a differential pricing strategy to any consumer. Thus making Free Basics and platforms likeAirtel Zero Illegal in India. They also contemplated the following:

No service provider can offer or charge discriminatory tariffs for data services on the basis ofcontent.

https://en.wikipedia.org/wiki/World_Mobile_Congresshttps://en.wikipedia.org/wiki/Barcelonahttps://en.wikipedia.org/wiki/Bharti_Airtelhttps://en.wikipedia.org/wiki/Sunil_Bharti_Mittalhttps://en.wikipedia.org/wiki/Sunil_Bharti_Mittalhttps://en.wikipedia.org/wiki/YouTubehttps://en.wikipedia.org/wiki/YouTubehttps://en.wikipedia.org/wiki/Sunil_Bharti_Mittalhttps://en.wikipedia.org/wiki/Sunil_Bharti_Mittalhttps://en.wikipedia.org/wiki/Bharti_Airtelhttps://en.wikipedia.org/wiki/Barcelonahttps://en.wikipedia.org/wiki/World_Mobile_Congress


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No service provider shall enter into any arrangement, agreement or contract, by whatever namecalled, with any person, natural or legal, that the effect of discriminatory tariffs for data services

being offered or charged by the service provider for the purpose of evading the prohibition inthis regulation.

Reduced tariff for accessing or providing emergency services, or at times of public emergencyhas been permitted.

Financial disincentives for contravention of the regulation have also been specified. TRAI may review these regulations after a period of two years. [4]

Impact of Net Neutrality on :

I SPs (I nternet service Providers) : No gatekeeping on the usage of net packs. Users can freelyaccess any data from any website, anytime, anywhere without worrying about paying extra, slowspeed, or losing their favorite web site from the internet. Which otherwise would have caused few

vital and most used websites and apps like Wikipedia, WhatsApp to either be given slow ornegligible speed. Forcing the users to either switch to another similar sites or paying exorbitant touses their already free services.

Websites: Wikipedia, a website which runs on donations is a vital website for any informationgatherer. Sites like these who would have not opted to pay extra to the ISPs could have receivedvery low speed. Thus making it extremely difficult for the coming generations to avail the servicesof such a common knowledge sharing website. Blogs, local News Channels and other allied smalland fragmented website benefitting the smaller strata of the society could have been forced to closedown. Opinion leaders could not have been able to spread their thought process over products and

thereby causing loss to both the brands in the marketing world and the consumer base. Online JobPortals like Monster.com and the like could have been suffered from the wrath of the decision ofgatekeepers and thus limiting the access to the HRs around the globe and able but unemployed

personnel.

Users: Price Differential would have been the biggest burn in the pockets of the Indian Internetconsumers. every website would had been charged differently. Forcing the consumers to limit thechoice. Online shopping to Knowledge sharing websites would have been charged in such a waythat benefit the ISPs rather than the people. Certain free and vital apps like Lime, WhatsApp andthe like would have been charged extra per KB of usage. The ISPs could get the authority to limityour net usage as per their will and wish. The rural India would have been in the most loss, as thelimited net speed upon that the charges would have discouraged the users to speed ahead in all thefields alike agricultural knowledge provided by the Government of India, HUL’s Project Shaktikiosk etc. which would have benefitted the farmers to huge extent.


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Impact of Net Neutrality to Apps, Cross platform mobile messengers (Whatsapp) :

Benefits to ConsumersThe news is both good and bad for users of free online messaging services like WhatsApp, Viber,Hike, and Skype, and worrisome for social media giant Facebook.A high-level government committee supports the free-messaging services and goes to the extentof saying all impediments in their path must be removed.The FCC believes these three bright-line rules will protect the virtuous cycle of industryinvestment and innovation in Internet content and hardware infrastructure and ensure there is fairaccess to consumers for what they pay for: Access to all locations of the Internet where there islegal content they want access to; and for content providers, fair access to the ISP’s network sothat the content can be delivered to the consumer. To enforce these rules, the ISPs are ordered to

provide transparency to consumers and content providers about the services received and the

network management practices. Notice the non-discriminatory rules apply only to legal content, which leaves the door open forISPs to block or throttle illegal content, providing a new avenue to combat piracy and cybercrime.Prior to this, regulators disapproved throttling of any content, including illegal content that violatescopyright.

Adverse Effect on ConsumersIf there is no Net Neutrality, one will have to pay the price for telecom majors choosing to focuson network building (earning huge sums of money in the process) rather than focusing on buildingapplications that OTT services like Skype and WhatsApp have milked to the maximum.

Now, if the OTTs don’t pay what telcos want them to, your messages will deliver slower a ndvideos will take longer to download.The main controversy regarding these bright-line rules is that the paid prioritization ruling willthwart innovation and infrastructure investment by ISPs. The argument is that, by not allowingISPs to charge extra fees to heavy users of the network like Netflix, they will have less incentiveto invest in infrastructure because it is harder to monetize, and consumers will instead foot the bill.So consumers: get ready to pay more for Internet access, and expect lower download speeds dueto congested networks.

Calling your friends/relativesIf you use Skype, Viber, WhatsApp or any other VoIP platform to call your friends or relativesliving abroad, then you can continue to do so. VoIP calling abroad will continue to operate as itcurrently is. Unfortunately, there is a difference in the suggestion by the DoT panel report ondomestic VoIP calls. Effectively, it might just be cheaper to call your friend abroad than in thesame city. Although the decision is seen by many as the government siding with these apps; inreality, it’s more about safeguarding interests of the telecom industry. Telecom service providers


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within India have invested heavily in spectrum and the industry believes it is vital to ensure a fairlevel playing field in the domestic voice market.Effectively, using OTT services such as WhatsApp, Viber or Skype to place voice calls in thedomestic market would hurt the domestic telecom market.

You could message as much as you wantThe above differentiation between India and global calls has been made only for voice services.For messaging, the DoT report has emphasized on user’s right to a free internet. It would continueto enable free and fair access to the ability to message domestic or locally using OTT services. Soyou can continue to use WhatsApp, Skype, or the number of similar services out there to messageas much as you want.

The Verdict:

TRAI’s landmark ruling against differential pricing, believe it or not, is for your benefit. TRAI has asked operators to charge users only for the data they use in turn banning zero-ratedservices. And here is what it means for you:1) The ruling states that “no service provider shall offer or charge discriminatory tariffs for dataservices on the basis of content.” Thi s means that your internet service provider will not be able tocharge you separately for making VoIP calls using an app like Skype and can only charge you forthe data you consume in terms of upload or download.2) Also, this means that data packs offering certain free usage of sites or apps like WhatsApp andFacebook will cease to exist. There will be only one kind of data pack which will offer certainmegabytes or gigabytes of usage in return for a specific amount of money. This means that you

can watch videos on any website or use any app or service for the same price on the operator’snetwork.3) TRAI also ruled that “no service provider shall enter into any arrangement, agreement orcontract, by whatever name called, with any person, natural or legal, that has the effect ofdiscriminatory tariffs for data services being offered or charged by the service provider for the

purpose of evading the prohibition in this regulation.” This clause of the ruling makes sure that nooperator can find any loophole to tie up with a person, service or app and charge you more foroffering such services.4) TRAI also made sure that there is an open road to access this services at a lower price in anemergency situation. In its ruling it noted that “reduced tariff for acces sing or providing emergencyservices, or at times of public emergency has been permitted.” This means that companies, onlyduring emergencies, can zero rate their services to provide assistance to resolution of the issue.


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References:

1) http://www.trai.gov.in/WriteReadData/PIRReport/Documents/Performance_Indicator_Re port_Jun_2015.pdf

2) http://www.cnet.com/news/mobile-operators-stop-picking-on-us-or-else/

3) http://www.thehindubusinessline.com/info-tech/as-debate-over-net-telephony-rages-govt-to-reexamine-services-offered-by-skype-google/article4404537.ece

4) http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/Regulation_Data_Service. pdf

5) https://info.internet.org/en/story/free-basics-from-internet-org/ 6) http://www.business-standard.com/article/companies/10-things-to-know-about-facebook-

s-free-basics-net-neutrality-115122300326_1.html 7) http://www.hindustantimes.com/tech/govt-net-neutrality-report-backs-whatsapp-viber-

skype/story-8T242C0T8ua9O0HtbWUl9K.html8) http://www.forbes.com/sites/nelsongranados/2015/06/11/net-neutrality-goes-into-effect-

what-consumers-should-expect/#586c2ab45e539) http://www.rediff.com/news/report/faq-whats-net-neutrality-how-does-it-affect-

you/20150416.htm10) http://tech.firstpost.com/news-analysis/net-neutrality-report-you-can-make-skype-

whatsapp-calls-abroad-not-within-india-industry-reacts-274348.html11) http://www.hindustantimes.com/tech/what-trai-s-verdict-on-net-neutrality-means-for-

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