Understanding NET neutrality and its effect on start-ups

Net neutrality is to have all data on the internet to be treated equal with no discrimination on the basis of content, user or design by governments and Internet Service Providers (ISP’s). 

For example few start-up firms which want to compete with existing giants need to make the users understand why they are necessary and unique through their content on the website or digital marketing flat forms. Instead, if they pay more bucks to ISP such a way those competitors website is being loaded slowly and their content load fast. Where is the transparency about the quality of the product? They are not allowed to make deals with ISP’s to charge customers less money if they visit their website.

Net Neutrality means that Internet Service Providers should charge you on the amount of bandwidth you have consumed, and not on which website you visited.

In 2014, one of India’s largest telecom companies, Bharti Airtel decided to charge subscribers extra for using certain apps like Skype. These apps compete with the core business of telecom providers (voice and messaging) that are much cheaper.
There was heavy protest from customers, so Airtel delayed its decision, and said it would wait for the Telecom Regulatory Authority of India’s (TRAI) Consultation Paper on Regulatory Framework for Over-the-top (OTT) services.  

Later, Facebook brought to India internet.org, a pre-selected list of websites that are offered free to subscribers of Reliance Communications. There wasn’t much controversy at the time.

TRAI released a 118 page consultation paper on March 27^th 2015. The paper asked the opinion of public on a questionnaire consisting of 20 questions about how to regulate the internet. Questions on Net Neutrality have also been asked. By April 14^th, more than 2.4 lakh mails supporting net neutrality had been sent to TRAI through the website savetheinternet.in.

Airtel launched a new product on April 6th, Airtel Zero. The product comes with a collection of apps that have made deals with the Telecom Company.

On April 14^th, Flipkart left the platform after initially agreeing to be on it, saying that it wanted to ensure net neutrality.

TRAI will be open for comments till April 24^th, and counter comments till May 8^th.

Its effect on start-ups?

Telecom Service Providers cannot digest the way apps are using telecom networks (for free) to take away core telecom business, like messaging and voice calling. Telecom companies have to invest billions to get spectrum and build cell phone towers, and some internet services directly threaten their profits.

If ISP’s start charging for specific apps, however, it would make them the watch dogs of the internet; a role that can be easily misused. It wouldn’t just be an issue of telecom service providers versus internet based companies.

Absence of net neutrality would tilt the playing field against start-ups with better products in favour of established internet based companies who can afford to pay lots of money to telecom providers to only to show case their product.

Every internet user benefits from net neutrality. It enables a person to access which ever website they want based on their bandwidth payment or their tariff plan, and not on the content of the website. You don’t have to pay ISP’s more to watch serials and less to watch movies , for example.

Start-up companies also get benefitted.  One of the main reasons for new innovations in the software industry is because of the openness of internet. The internet has lowered transaction costs and levelled the playing field between companies with big budgets and start-ups with better creative ideas.

Today, a start-up can launch a great app and immediately draw a global presence.

 Net neutrality and watching it as a global issue.

Net neutrality is a global issue. The Federal Communications Commission of the United States recently voted in favour of strong net neutrality rules, to ensure that ISP’s don’t give priority to companies in exchange for money.

Last year, Chile banned zero-rated schemes (where bandwidth for certain websites is given free to telecom customers) and Europe is changing a 2013 proposal in which privileged access was allowed for ‘specialized services’, because it was too vague and directly threatened net neutrality.