Don't read this about #NetNeutrality - Part II by Sushant Sreeram

Airtel 'Zero' and is it actually as evil as it has been made out to be.

(AP Photo/Kevork Djansezian)

(AP Photo/Kevork Djansezian)

Here's what the Airtel website says about how Airtel 'Zero' will work:

1. Mobile app makers register with ‘Airtel Zero’ to give customers toll-free access to their apps
2. Airtel informs customers about these toll-free apps
3. Customers download and access these apps at zero data charges – and enjoy their favorite online tasks (e.g. entertainment, shopping) for free – even at zero mobile balance

As I mentioned in my previous post, I mentioned how I saw the Airtel 'Zero' initiative as a win-win-win for Airtel-marketers-consumers and I stand by that, with a caveat. But was there then such a brouhaha over it? Well, I don't want to comment on how public sentiment gets built in India but look at it this way - what if Flipkart wanted to pay every user for every minute he/she spent on the app [while Airtel continued to charge usage of that app at normal rates]? Would that have been OK? Of course right. It's similar to any loyalty program [offline or online] where the more you shop, the more incentives you get. While the user-behaviour expected in this case isn't one of shopping but of activity, it would nonetheless have been seen as a 'marketing tactic' by Flipkart as it would have barely made the headlines in the paper. Why, then, was it different the moment Flipkart decided to give that same money [that it could have given you and me] to Airtel instead? And here come the caveats:

If Flipkart, as a participant in the Airtel 'Zero' program, was paying Airtel the same that an end-user would have paid Airtel, then there isn't a risk of Airtel's shifting interests. But this parity probably wouldn't have happened:

Airtel, in their #airtelpledge mentioned 'toll-free' 9 times and went on about how the 'Zero' platform is similar to a toll-free number system. So allow me to take the same parallel. I looked up Reliance for their toll-free services and it mentions [apart from a INR 10K deposit and a INR 3K one-time cost], a variable cost of INR 2.40/min for operating a toll-free number. While at the same time, the cost of a local call on Reliance's prepaid 'One India One Rate' plan is between INR 0.30-0.40/min. That's right, Reliance makes between 6 to 8 times more money for every call that is made if that call were to be made to a toll-free number than if the user were to pay normal mobile rates and call up the same number. Note: I have taken the example of Reliance but the argument holds across. Extending this to the above case, Flipkart most probably would have ended up paying more per Kb than what a end-user would have paid Airtel under normal [i.e., non-'Zero'] access.

In an organization, the moment one revenue channel starts delivering better than another for the same resources consumed, it is but natural that the organization diverts its attention to ensuring that revenue channel gets all the resources it needs, correct? Sometimes, even at the cost of the other 'low' performing revenue channels [esp. when resources are limited]. Let's translate this: in a scenario where the bandwidth available for Airtel is limited and it has to, as a for-profit organization, keep growing profits, is it hard to imagine a future where a disproportionate amount of the bandwidth is allocated to powering apps/services by brands that pay Airtel directly [a.l.a the 'Zero' platform] considering we have already established they are probably gonna be paying more per Kb than you and me to Airtel? And what then happens to other apps/services that are not part of the 'Zero' platform? They need to now travel along a much narrower highway as the 'Zero' apps need a much broader higher [for higher profits].

As the non-Zero apps/services try traversing the narrowed highway, they get frustrated and these companies also decide to jump onto the 'Zero' platform as it allow for better access [even though it comes at a cost]. What if all the 'ones who can afford it' jump onto the 'Zero' side? The narrow lane keeps getting narrower for non-'Zero' apps [as a larger part of the highway is now required to accommodate the ever-increasing 'Zero' participants 'cause remember: the total width of the highway a.l.a bandwidth can't go up significantly]. And if recent claims are anything to go by [here and here], this is perhaps already happening. And this differentiation is exactly what defeats the principle of Net Neutrality.

And it is thus that Airtel 'Zero' that seemingly is a win-win-win for everyone involved can end up messing with the tenets of universal equal access to the internet.

Don't read this about #NetNeutrality - Part I by Sushant Sreeram

Well, I couldn't convince you could I?

I am serious about the not reading part. Will get to that in a while.

Over the last 4 weeks since the Airtel 'Zero' / Flipkart fracas broke out and my Facebook wall started getting inundated with 'views' and 'opinions' and 'expert thought' type things, I have watched myself behaving like one of those bobble-head dolls when it comes to my take on the issue as people have professed support both for and against. And that's because it's taken me time and reading to truly understand what is being discussed. And I have a feeling some of us haven't fully understood it.

At first glance, Airtel 'Zero' appears to be a clever move by Airtel to create a win-win-win for self-consumers-marketers where Airtel wants to make more money-consumers don't want to keep paying more money [even as they consume more data]-marketers, on the back of some pretty aggressive fund-raising, are willing to pay good money to build audience reach and engagement [esp. with Mobile Apps].

A good example would be the company Freecharge that Kunal [whose chops I have a lot of respect for] and Sandeep started in 2010. The idea was simple - brands want to acquire customers and get them to keep coming back, and are willing to incentivize this behaviour and even pay for distributing the incentive. So effectively, users who recharged their pre-paid mobile accounts on Freecharge received all their money back in the form of gift vouchers from these brands that have partnered with Freecharge. Soon, word spread about 'this site that was giving everyone a 'free' recharge and the rest is history.

Back to Airtel 'Zero', Flipkart, I am guessing without any access to non-public info, decided to test this out as just a marketing tactic to drive MAUs of the app [remember: no reason to believe free data access would mean better visitor-to-buyer conversion rates]. And that's around the time when sh** hit the fan with folks across the internet calling this a violation of Net Neutrality. But is it?

Net Neutrality, a term coined by Tim Wu, a Columbia University professor in 2003, implies internet service providers [or any other intermediaries in the chain] don't discriminate one form of data consumption from another either basis data-type, location of the user, device type of the user, or pretty much any factor. Basically, the Net Neutrality principle is the universe's way of telling ISPs to do a good job of proving humanity access to the internet [and pls do make money while doing it] and not get into the specifics of who/how someone is using it.

You convinced Net Neutrality is necessary? Yes, you can skip the rest of this post :-) You aren't convinced? Follow me.

In 2011, Eli Pariser, the co-founder of Upworthy [Notice those "you will not believe..." headlines on your news-feed? Well, Upworthy is kinda the creator of that] gave an amazing TED talk on how Google's [and by my extension, the internet's] efforts to personalize each user's experience was creating world-views unique to each of us. Example, if I visit NY Times and a week later search for news surrounding an event, guess which site is most probably going to rank pretty well in my results. I am not kidding. I don't when it comes to Google. Here. Now, let me say 'personalized search' is great at making my life simple. After all, if Google [or any search engine for that matter] can figure out I visit pretty frequently, I'd be glad if Google gave me results for relevant searches that prominently included links from NYT.

Now here's the critical part - my 'personalized experience' is essentially guidance on what content I consume which will define my view on that topic. And so with your personalized experience. Now combine all the topics that you and me consume information on and all the different takeaways you and I have about each of those topics and you can bet good money you and I are going to see the world very differently, you and I are going to be operating within the same universe of facts but interpret them and other truths surrounding them differently.

Just like someone reading this post will have a view on the concept of Net Neutrality different from someone who didn't. And that, I am hoping you will agree, is a sub-optimal outcome for nature.

And this is why I was trying to tell you not to read this post. To maintain information symmetry in the universe. But now that you have gone ahead and read it [either that or you scrolled down looking for funny videos], share it [to keep things on an even keel you know].

But what does all of those have to do with the on-going discussion about Airtel 'Zero', Net Neutrality, and the TRAI consultation paper? Part deux coming up.