At present, any person is free to start a website, app or any other content service on the Internet, and telecom providers like Bharti Airtel, Idea Cellular, Reliance Jio and Vodafone are not allowed to block his or her website or service or demand money.
“The current question is whether for the same volume, customers can be offered differential tariffs, and the difference be bartered from the Content provider or application provider website… The question posed by TRAI is whether the TSPs can offer such plans and obtain in barter the charges from the Application providers.”
Under the new ‘Zero Rating’ new scheme proposed by telecom operators — and debated by the TRAI — there would be a new non-neutral Internet where both content producer as well as content consumer will have to pay.
Any website or user that refuses to pay will be blocked, and the website will not be accessible to the subscribers of that service.
Since nearly all the wireless spectrum in the country are in the hands of 5 or 6 operators, a website that does not pay these six companies will not be able to reach practically any consumer in India through the ‘non neutral’ Internet.
Zee TV said this will be a big blow to start-ups and will prevent any new website or app from coming up, as they have to start paying Airtel, Vodafone and the others even before they’ve got their first customer.
Traditionally, Internet services (including Google, Youtube, Facebook, news portals etc) generate revenue through ads which barely cover their operating expenses. If forced to also pay telecom companies, such independent websites and apps could become totally unviable.
As a result, Internet users will be forced to get their news, videos, messengers, social networking and so on from websites and apps owned and operated by Airtel, Idea, Jio etc..
Airtel, for example, has unveiled its own music downloading software called Wynk and gives special data benefits for those who download the software. This hurts the chances of third party music apps like Hungama, Gaana etc. Similarly, Reliance Jio has Jio Chat, which competes with WhatsApp, Facebook Messenger etc.. Similarly, at least one telecom operator has plans to enter the ecommerce business, which will hurt Flipkart and Amazon.
Allowing operators to charge more for third-party apps and promote their own could also hurt the quality of services as telecom operators’ apps and websites — which may not be of the best quality — will be able to keep other competitors from succeeding in the market due to differential pricing.
“Non-discriminatory internet access Internet is key to India’s startups and innovative service providers. We need them to grow to global levels, rather than allow the Indian landscape to be dominated by selective international players who are able to pay for content.. in no case there should be differential pricing which is not equally applicable to all sites which provide the same application or service,” Zee said.
“Zero-rated mobile traffic is blatantly anti-competitive price discrimination designed to favor telecom service providers own or their partners’ apps while placing competing apps at a disadvantage… Telecom providers cover the costs to users of accessing certain hand-picked sites and apps which are their own. This is a TSP and Content Owner combination and should under no circumstances be permitted.”
“The principle of Cross ownership between TSPs and their own sites for Application or content needs specific attention and should be specifically prohibited. In some cases, TRAI may need to lift the “Corporate Veil” and ensure that the rules are not being violated by restructuring entities,” it added.
In the early days of value added services, telecom operators used to run such a system, where they kept 85% of the revenue generated by such content services for themselves and only gave 15% to the company who actually provided the videos, songs, games and so on. This resulted in very high cost of consumption, such as paying Rs 5 to listen to one song and so on.
However, with the rise of the Internet, telecom operators could no longer charge content companies as they could not block any website or service without legal sanction. As a result, now they get revenue only from their consumers.
Net neutrality “is the principle that calls for the Internet to remain free and open – with no “fast lanes” that would allow some content providers to take priority over others. The core principles that best outline the scope of the concept are:
(i) All sites must be equally accessible: ISPs and telecom operators shouldn’t block certain sites or apps just because they don’t pay them. No gateways should be created, in order to give preferential discovery to one site over another.
(ii) All sites must be accessible at the same speed (at an ISP/Telco level): This means no speeding up of certain sites because of business deals. More importantly, it means no slowing down some sites.
Non-discriminatory access is the heart of net neutrality. Differential pricing if allowed would result in discriminatory regime thereby violating the very essence of net neutrality,” Zee TV said.
The media giant also pointed to new draft rules proposed by the US regulator on net neutrality.
“The FCC has proposed to reclassify broadband internet access service as a telecommunication service under Title II of the US Communication Act and centred its net neutrality proposal on three so called Bright Line Rules: 1) no blocking 2) no throttling 3) no paid prioritization commonly referred to as ‘fast lanes’… On the same lines, Zee Network would like to oppose any selective Zero rating or differential rating plan where, for example, one Streaming Website of content is offered at Zero Cost, but other Streaming Websites which offer similar streaming are charged.”