Airtel Zero is free and other net neutrality myths busted
Airtel made its first serious attempt to deviate from the concept of net neutrality in December last year. The company came out with a proposal that it would start charging consumers extra for Voice over Internet Protocol (VoIP) calls made using apps like Skype and Viber.
An outcry followed from users. Airtel was slammed hard and bad on Twitter and Facebook. People took note of how unfair the proposal was, and the telecom company backed off and said that it won't go ahead with the proposal - at least not immediately. A few months later, Airtel is again in the middle of the debate on net neutrality. But this time, it has come up with something that, at least on paper, seems less outlandish than its earlier proposal. The new plan has also been sugar-coated with "free".
We are talking about Airtel Zero. In the last few days, whenever Airtel or industry veterans like Cellular Operators Association of India (COAI) director general Rajan S Mathews have talked about the Zero plan, they have generously highlighted that it makes the cost of internet access for many people "zero". The argument is that zero is good because it allows people who don't want or can't spend on internet to access applications. Zero cost for consumers also makes it easier to defend something like Airtel Zero unlike the extra charges for VoIP, where Airtel was trying to earn the "extra" bit directly from consumers.
The reality is that there is nothing zero or free about Airtel Zero.
A wise economist once popularised the phrase, "There is no such thing as a free lunch". This was true when Milton Friedman first said it in the '70s, and it is true now.
With Airtel Zero, the telecom company is just passing the cost from consumers to the app developers and start-ups. Someone is still paying and is probably paying more for the data that these apps will consume. In the grand scheme of things, Airtel Zero is not philanthropy. It is not Airtel that is giving consumers something for free - the company is getting its fairly hefty cut. So it can stop pushing the Zero plan as something of a favour that it is bestowing on consumers.
Still, an argument can be made that free is free. Why should consumers care who is paying for it? If they can get it for free, it must be good for them. No?
The answer to this question is also a resounding no, although the real price for Airtel Zero, which the consumers are going to pay, is not all that evident.
Any scheme like Airtel Zero adds a variable to the fairly direct relationship that app developers have with their consumers. It adds the free factor into the mix. No doubt, for a lot of consumers free access to Facebook, Twitter, Google, Flipkart or a media site will be of incredible use. But "free" basically conditions consumers to use only the stuff that doesn't cost them. This means in the long run, apps that pay to the telecom companies will get ahead of the ones that don't. The world is already a fairly unequal place, and instead of trying to fix the barriers that we have in the real world, Airtel and the others are busy arguing about adding new ones in the virtual world.
The argument is that the real world already has these barriers, so why shouldn't the virtual have them too?
Once free apps get the preferred placement on the home screens of smartphone users and competition begins to die, we will start seeing what happens when the market is dominated by few players. Prices will go up. All the money an e-commerce website or any other app spends on paying a telecom company will be recouped from consumers.
As Milton highlighted, "there is no free lunch".
What about some other myths? Let's bust them too...
India's internet is different so net neutrality doesn't apply here
No, India's internet is not different. And neither are Indian web users. India's internet is slow and almost non-existent amid the very poor market conditions. TRAI and telecom operators are responsible for this mess. To fix this, telecom companies need to improve their service, invest in infrastructure and then directly charge consumers a fair price for it.
Free access to apps is just like toll free numbers
This is another favourite argument of those supporting Airtel Zero. However, the analogy doesn't work because the internet is different from the telephone, which is mostly a passive medium. Yes, you can have two way conversations on it, but you don't spend Rs 10,000 buying blazers on a telephone. On the internet you do. It is much more dynamic and giving internet service providers in a say how people access their apps or websites is extremely risky.
Airtel Zero is open to all
No, it is not. It is open to app developers who have money to pay to telecom operators. Airtel Zero doesn't mean discrimination in terms of access. I recently asked the company about Airtel Zero and app access when the consumer has no bandwidth on the data plan. Airtel said, "Yes, even if consumers exhaust their data limit, they will be able to access Airtel Zero apps as the platform offers completely free digital access for the customers." The normal apps, meanwhile, won't work. There you have it, no discrimination in terms of access!
As voices grow louder against this attack on internet freedom in India, arguments in favour of net neutrality are floating on the web in response to TRAI's consultation paper on the issue.