Net Neutrality: How Airtel Zero will destroy India's internet

Even as the debate around net neutrality is picking pace and the Telecom Regulatory Authority of India (TRAI) is expected to come up with its rules on the matter, Airtel has gone ahead and launched Airtel Zero. The plan, as Airtel explains, is to allow app developers and web service providers to pay money to the telecom giant so that their services and apps can be extended to consumers for free.

This means Flipkart, which is supposedly a part of Airtel Zero, can be accessed by Airtel subscribers for free and they would not have to pay for data charges.

In a country like India where internet is expensive (it's another matter that it is expensive because telecom operators are lazy and greedy), something like Airtel Zero looks like a win-win situation for all. For example, an Airtel official said to the Hindu Business Line, "Since we announced Airtel Zero on April 6, more than 150 start-ups – the majority being small start-ups – have contacted to enquire about the product. For the record, every one of them told us what a great platform we will be providing to them and for a change they will have an 'equal opportunity' to run with the big boys. On an average, Airtel Zero will help reduce their marketing costs by almost three quarters. Not bad, I would say, though some may still feel otherwise."

The problem is that it is a short term view. If allowed, Airtel Zero, which is bound to be followed by other telecom players with similar plans, is going to destroy the internet in India. It is going to make internet use in India look like the direct-to-home market - offering different plans for different services.

To keep it short and concise, here is what Airtel Zero is going to lead to in India's internet space:

1) Every telecom operator will offer something similar to Airtel Zero. The start-ups that are going gaga over Airtel Zero, including Flipkart, won't only have to pay Airtel. They will have to pay all other operators too if they want to reach all web users in India.

2) The companies that don't pay money to telecom operators will see that their service costs consumers money - and possibly a huge amount of money because even general access to internet may become more expensive. In the long run, these services will lose out to the ones that are already paying money. This will decrease competition, stifle innovation, and eventually lead to fewer choices and higher prices in the market.

3) For now, Airtel says that the Zero data plan just gives start-ups some marketing push. But it is almost a certainty that in the future, start-ups will have to pay more for Zero data plans and any service that doesn't  pay the telecom player will be discriminated against. For example, those who pay will be in the fast lane as opposed to those who don't. It is a slippery slope and once we allow companies like Airtel to go down this route, there will be no end to it.

4) There is a very strong possibility that Zero data plans from various telecom operators will balkanise the internet. For example, the Flipkart shopping experience will be best on Airtel while the Jabong one could be better on, say, Vodafone. For consumers, this means less choice in the long run because once they have been conditioned with "free access", it will be easy to keep them confined to their limited virtual world.

In the last ten odd years, Indian telecom companies have shown that they don't care all that much for good service. For example, the quality of telecom e-service, nowadays, is utterly poor in India. Instead, all they are interested in is squeezing out every paisa they can from consumers. This is the reason why they have not invested in internet infrastructure in the country. Indian internet connections are among the slowest, costliest and most unreliable in the world. A large part of India still doesn't have proper web connectivity. In fact, finding a decent connection even in a city like Delhi is a major problem.

Now, telecom operators are arguing that because of the poor wired connectivity here, India needs to focus on wireless internet. And, they say, it requires that we deviate from the norms prevalent in developed countries where wired connectivity is good. Basically, in the last ten years, telecom operators, with ample help from TRAI, have made efforts to keep India's internet scene poor. They have exploited consumers and now they want to use the "poor internet connectivity" in the country to push for plans like Data Zero so that they can go after internet companies and app developers, who have more money (at the moment) to pay for data, compared to the average consumer.

But don't be under any illusion. If data Zero plans are allowed, instead of innovating or improving services, telecom operators will focus on squeezing out every paisa from app developers and internet companies just the way they have from consumers. And that will continue, most likely with the full blessing of TRAI, until they zero in on some other devious plan to make abnormal profit.