In today’s Finshots, we tell you what’s net neutrality and why everyone’s suddenly talking about it again.

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Let’s take it from the top — what is net neutrality, anyway?

Well, at its core, it is this idea that the internet doesn’t discriminate. It treats everyone who uses it equally. And it treats all traffic flowing through it in the same manner.

So an internet service provider (ISP) shouldn’t care if you’re using data to binge on a Netflix video, send a text message over WhatsApp, or read an insightful Finshots story. You give them money. They give you data. And you do whatever you want with it.

On the flip side, the ISP can’t ask Netflix to pay a special fee just because a video consumes more internet bandwidth than a WhatsApp message or a Finshots story.

Everyone’s equal on the internet highway.

But imagine if this wasn’t the case. Imagine net neutrality didn’t exist. And think for a second how it would look if the ISPs could impose differential charges. To paraphrase the legal scholar Charles Duan, it would be like “Blue Dart delivering packages from Amazon faster than Flipkart. It would be a highway with a special lane for Maruti Suzuki and not for Mahindra. It would be if Ola dropped you off faster just because you were going to Indiranagar and not to neighbouring Jeevanbhima Nagar.”

Basically, ISPs will pick favourites.

And you can see how things could be quite problematic, right?

Heck, Jio could slow down speeds for Netflix and pump it up for Jio Cinema. Just to drive users to its own platform. And this preferential treatment could throttle the growth of small companies who are trying to innovate on the internet. If they don’t have deep pockets, they’ll suffer the wrath of the ISP. They could crash and go out of business. I mean, imagine if the ISPs in the 2010s felt that YouTube was hogging the bandwidth. Or they felt that people were messaging each other on Facebook and it was a threat to the SMS. They could’ve chosen to limit the reach of these platforms. Or they could’ve squeezed them for money. These platforms may not have existed today.

For instance, even Netflix had to deal with this in the US. They figured that people who were trying to stream its content were struggling. The speeds were slow. And the problem seemed to stem from the fact that telecom firms Comcast and Verizon were throttling speeds. So Netflix was forced to pay up just to remain competitive. And once the money hit the telcos' bank accounts, Netflix customers saw a 67% jump in internet speeds while streaming.

Now that’s too much power in the hands of the ISPs. They’re gatekeeping the internet. They’re the ones deciding what we should get as consumers. It just doesn’t seem fair.

So is the whole world in agreement with Net Neutrality then?

Well, not quite. For decades the US has been flip-flopping on a law to codify it. It still doesn’t have one. On the other hand, India has one of the strongest laws in support of Net Neutrality. And it gained attention in 2016 when Facebook tried to launch something called FreeBasics — where it would tie up with certain telcos and offer people data-free use of its platform. The regulator put a stop to it.

Anyway, so why is everyone suddenly talking about net neutrality, you ask?

Well, telecom companies such as Jio have shot off another letter to the regulator. They want OTT players like Netflix to pay up for using telco infrastructure. They say that the ones hogging all the bandwidth should shell out extra cash for this. And that telcos all over the world feel the same way about the matter.

And in return, Indian tech companies and startups have shot back. They call this unfair. They point out that the only reason India’s startup ecosystem has exploded is because everyone has equal access to the internet. The biggies aren’t getting preferential treatment. And they say that since more people are consuming data, it has actually boosted telco revenues and not hurt it.

But of course, telcos have their rebuttal to that too. For instance, they say that they’re asking only for a usage fee for infrastructure. And that no one will get special treatment. So they claim that it won’t break any net neutrality rules. Also, they’re willing to give the small startups a free pass. They want to levy a fee only on the biggest users of internet infrastructure.

Now we’re no public policy experts so we’ll leave it to you to be the judge of this debate

But before we go, there’s one more niggling question that The Ken pointed out recently.

You see, Telcos and OTT players are already bedfellows. For instance, Jio has just signed a deal with Netflix to bundle its content through its prepaid network. And Airtel also has a Netflix deal on select postpaid plans.

Doesn’t that mean that telcos are already promoting certain content at a special price?

Sure, you could argue and say it’s the telco who is paying a discounted rate to the OTT. It’s not the other way around. But there’s still some preferential treatment in exchange for money.

Does that sound like it impinges on the principle of net neutrality? What do you think?

Until then...

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