TRAI’s new rules will mean the death of neutral Internet: Here’s why

neutralityAs you read this, India is celebrating the victory of ‘net neutrality’ over evil plans by Facebook and telecom companies to convert the Internet into a walled garden where they allow only those websites who pay monies to them.

And you can’t be blamed for it either.

But guess what, the telcos are not crying either. That’s because of a specific exemption to TRAI’s net neutrality rules meant to protect walled gardens like Free Basics and telecom companies’ own ‘special’ Internets.

In one line, what the TRAI has NOT done is ensure net neutrality, but merely ensured that anything that is not neutral is not marketed as the Internet.

PROHIBITION OF DISCRIMINATORY TARIFFS FOR DATA SERVICES
3. Prohibition of discriminatory tariffs.-

(1)No service provider shall offer or charge discriminatory tariffs for data services on the basis of content

(2) No service provider shall enter into any arrangement, agreement or contract, by whatever name called, with any person, natural or legal, that has the effect of discriminatory tariffs for data services being offered or charged to the consumer on the basis of content.

Provided that this regulation shall not apply to tariffs for data services over closed electronic communications networks, unless such tariffs are offered or charged by the service provider for the purpose of evading the prohibition in this regulation.

(3) The decision of the Authority as to whether a service provider is in contravention of this regulation shall be final and binding.

Free Basics and upcoming copycat networks from telecom operators will be perfectly legal under the new rules.

After all, what the telecom operators want is the ability to create and offer new Internet-like services over which they have total control using the spectrum that they have leased from the public. They get to decide which websites and apps are on it, they get to decide how much these apps and websites have to pay them etc., and it’s all perfectly legal under the new rules.

The new rules specifically say that telecom companies can create their own new Internets as long as 1) they don’t connect this new network to the open Internet, and 2) they don’t call their Internet as the Internet.

So, the next time you go to buy a data recharge from an operator like Bharti Airtel, don’t be surprised to see two options – you can recharge to get the regular Internet, or you can recharge to get Airtel’s ‘fast’ net.

If you recharge to get Airtel’s fast net, for example, you might not see 90% of the websites you are used to. For example, Google may not be there. But there will be another search engine, perhaps called Tootle. This special net will have only websites and apps chosen chosen by Airtel for inclusion.

If this sounds like Facebook Free Basics, that is because it is. Under TRAI’s new rules, Facebook’s Free Basics is perfectly legal as long as they obey one specific rule — the Free Basics network has to be a self-contained experience. The rules merely say that Free Basics cannot ‘transmit or receive any data over the Internet’.

In other words, you cannot send a message to another Facebook user who is connected only to the main Internet. But if the other user is also present on the ‘Free Basics’ net, you can ping and chat with him or her as you would normally.

Similarly, Facebook or Airtel or Idea will not be able to bring you a news article from a website that is present only on the main Internet. But you will be able to browse those websites that are owned by the operator, or have agreed to pay money to the operator to be placed inside the his version of the Internet.

In many ways, it will be not be even as ‘neutral’ as Free Basics. Facebook, at the end of it, was not charging websites to be on the network, but telecom companies will either seek a stake in the company or charge monthly fees to be on it. In fact, many telcos already own content companies and apps.

Airtel owns Wynk, while Reliance Jio’s parent owns websites like Firstpost.com, Bookmyshow.com, Homeshop18.com, Overdrive.in, IBNlive.com, Tech2, Eenadu.net, Moneycontrol.com, Pradesh18.com etc.. Access to these websites (and TV channels like CNN IBN, CNBC TV18) owned by the group can be made totally free for Jio subscribers under the new rules, just like Wynk music, Wynk games etc can be given free for Airtel’s subscribers.

IS THIS A THREAT TO COMPETITION?

Now we come to the question of — is this a threat to the ‘main’ Internet? Isn’t ‘free’ a good thing?

More importantly, will this really kill innovation and start-ups? The answer is — only if TRAI doesn’t come out with further measures to prevent reservation of bandwidth by operators for their own networks.

If reservation of bandwidth is not prevented, normal websites and businesses will end up on a slow, paid platform, while the operators’ apps and websites will be present on a potentially free, super-fast platform.

In such a situation, even after a subscriber chooses to pay data charges and opts for the real Internet, he may not get the speed and experience that he can from the operators’ own special Internet due to the throttling of neutral Internet to favor operators’ own offering.

Just ask yourself – if Airtel or Reliance Jio offers their Internet-like service free of charge, will you use it? Yes, of course. Will you then shell out Rs 250 per GB for the real Internet? Some will, most may not.

Now suppose, after paying Rs 250 per GB for using regular Internet, you get a bandwidth of only 20-40 kbps. You open the telecom company’s ‘free’ Internet, and see that websites open in a jiffy and videos stream without pausing. Which one will you continue to use?

And if millions of consumers start spending more and more time on the telecom company’s net instead of the Internet because of the speed, eventually all websites and apps will be forced to establish their presence there.

TRAI’S OVERSIGHT?

These two points — pricing and ‘slow-lane-fast-lane’ approach capture the main oversights that TRAI seems to have made.

The new rules say nothing about differential pricing of closed communication networks vs the Internet, and reservation of bandwidth for such closed communication networks vs the Internet.

In fact, far from banning Zero rated websites, TRAI has simply mandated Zero rated networks in which there can be any number of Zero-rated websites.

Similarly, if an operator reserves the lion’s share of his bandwidth for this Zero-rated network, the regular Internet — and all the websites and apps that use the regular Internet — will simply not be able to compete, with the result that the open Internet we see today will become an exotica.

There are two ways that the regulator could have rectified this mistake, if it was indeed one.

First — it should NOT have said that its differential pricing rules DO NOT apply to closed communication networks. By saying that its rules do not apply to telecom companies’ own special networks,  it has made the entire regulation toothless in combating walled gardens.

Because of this exemption given to closed networks of the telecom operator and companies like Facebook, they will now be able to use cheap pricing to drive people away from regular Internet and onto their proprietary network.

At least initially, the walled garden networks are likely to be offered free of cost and the expenses of running this private Internet is likely to be recovered from those using regular Internet.

If the exemption was not there, telcos would not have been able to drive people away from the Internet towards their network by using lower prices. This is a major loophole in the regulations.

Some may argue that no walled garden, even if ‘free’, can compete with the richness of the Internet as far as content and quality is concerned. They are right of course, and this is where TRAI’s second oversight matters.

Even if differential pricing was to be banned, the second loophole alone — differential bandwidth allocation — would have enabled operators to push their captive networks at the cost of the public internet.

Under the new rules, nothing stops a telecom company from trying to lure people away from the regular Internet and on to its special Internet by making its own net faster than the regular Internet by reserving bandwidth.

The result? We may soon end up with even slower Internet than what we have now.

ARE TRAI RULES USELESS?

Far from it, the rules have achieved two things. First and foremost, they have prevented ‘non-neutral’ sites (so-called zero-rated websites) from polluting the ‘real’ Internet. TRAI has forced the operators to totally segregate their sponsored Internet from the real Internet. Because of this, the basic structure of the Internet has been protected and tampering with it has been made illegal.

This is, however, only half the task, as this protection currently extends only to the Internet, and not to the ‘data network’ that has been built on the spectrum leased to the telcos. The data network will continue to have differentially priced websites — the only difference is that they will be from telco’s ‘intranet’ and not from the Internet.

What TRAI’s rules have done is set the stage for two more future regulations to take shape, including a likely one that requires telcos to treat both Internet traffic and its in-house intranet traffic equally without giving one priority over the other. Another less likely regulation is one that will enforce this equality in pricing as well.

The TRAI has also, in subsequent clarifications, said it would address other aspects of net neutrality in the future, indicating that at least the traffic neutrality rule for Internet vs intranets will be implemented. But given that no operator currently is offering any proprietary Internet of their own, activists are yet to take up this issue.

ALSO SEE: TRAI’s net neutrality rules could see zero-rated networks replace zero-rated websites in India

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