Business Today

Net neutrality: Flipkart's decision to pull out from Airtel Zero is a breather for start-ups

The most strong point against anti-net neutrality is that it will create monopolistic companies. Young start-ups will simply not have the advertising muscle of companies like Flipkart and also the money to pay the telecom companies (telcos).

twitter-logo Taslima Khan        Last Updated: April 21, 2015  | 10:56 IST
Net neutrality: Flipkart’s decision to pull out from Airtel Zero is a breather for start-ups
Assistant Editor, Taslima Khan

Taslima Khan (Assistant Editor)
Two of the world's largest Internet companies, Facebook and Google, have either taken a hypocritical stance on net neutrality or have been against it outright.

At least home-grown e-commerce company Flipkart has played its role in backing net neutrality. The buzz is that Flikpart actually yielded to mounting pressure because of social media backlash but it is no doubt a positive development for India's  start-up community. The fact that Flipkart pulled out of Airtel Zero reveals that it very well remembers its own start-up days. Flipkart benefited from the principle of free Internet. Indeed, had free Internet not been in place, it would have been tough to beat competition from existing e-commerce sites like Indiatimes.com. Flipkart's Head of Commerce Mukesh Bansal believes that net neutrality is as good as democracy is for the country.

On the contrary, Google and Facebook don't seem to appreciate net neutrality. Google has even taken a hypocritical stance in India. While in the US the company strongly favours net neutrality, in India it has very sheepishly been part of several anti-neutrality practices. In 2010, Google tied up with Airtel for offering better speed for YouTube users during the Indian Premier League season. Facebook's internet.org, which works with Reliance Communications, is offering to pay the bandwidth costs of using Facebook as well a group of other websites. None of these are Facebook's closest competitors including Google. For a country where bandwidth is still a big challenge, internet.org seems to dictate to a new user which app to use and which not to. For those who get introduced to the Internet through internet.org, it can be misconstrued as Facebook and the group of websites that are part of the package.

The most strong point against anti-net neutrality is that it will create monopolistic companies. Young start-ups will simply not have the advertising muscle of companies like Flipkart and also the money to pay the telecom companies (telcos). The telcos are saying they have lost revenue from voice and messaging. But statistics do not bear this out conclusively. For instance, the revenue they get from mobile Internet packages is actually going up. We cannot yet conclusively say that having a pro-net neutrality policy will necessarily leave the telcos at a disadvantage. Also, we are talking about three telcos. Three companies together have a 50 per cent stranglehold over the market: Airtel, Vodafone and Reliance Communications. So, to say that the interest of these three companies should be above that of everyone else is difficult to accept. To pitch the interests of the companies that are crying foul over the interests of a vast majority of Indians who do not have access to the Internet, or would have discriminated access, is not fair.

In an ideal world, there would be intense competition between telcos. But here we have only three major companies, and so there will be bidding between bigger companies like Flipkart or Amazon to be part of plans like Airtel Zero. That will kill innovation.

Hope for start-ups rests on the fact that, across the world, legislations favouring net neutrality have been framed wherever civil society is strong and where there has been political pressure for it. The remarkable thing is that countries like Brazil and Chile have taken a stance that the rights of consumers are above those of telecom companies, even though both countries don't have excellent telecom infrastructure. In any legislation you can't make all sides happy but the attempt should be to have as many people in your target group as possible. In India, surprisingly, there has been good political support for net neutrality in the last one week. We have MPs like Rajeev Chandrasekhar and Anurag Thakur who are quite enthusiastic about it. Also, political parties like Aam Aadmi Party and Congress are supporting it. The broad understanding is that the electoral base should be protected as opposed to telecom companies.

 

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close