Through Another Lens: Understanding Telecom Operators’ Concerns [Net Neutrality]

FULL DISCLOSURE: I am the founder of Yippster, an operator billing solution. This may bias my views on the subject. On the other hand, I have had a better chance to interact with telecoms and understand their point-of-view.

Mobiles in India are the Unique Identifiers
Mobiles in India are the Unique Identifiers

The Telecom sector, a major pillar of India’s digital future, also has concerns which are smothered by the mainstream narrative on ‘net neutrality in India’. I wrote this Q&A from my understanding of their concerns:

What started this passionate debate in India?

TRAI released a consultation paper, asking public opinion on ‘Over The Top’ (OTT) services. The term OTT is not well defined and may have different ‘types’. Depending on who you ask, OTT can mean everything on the internet, or just a few services like WhatsApp.

What’s so special about WhatsApp?

WhatsApp is often cited as the ‘little start-up’ guy that telecoms are trying to bully. In reality, Facebook paid USD 22 Billion or Rs. 1,37,115 Crores for it. This figure is greater than the net worth of many telecoms.

What!?!

Exactly. From a telecom operator’s point of view, WhatsApp is no longer a ‘startup’. It is also the ‘type of OTT’ that telecoms dislike because it gives telecom-like services to its users ‘over the top’ of telecom’s infrastructure. Telecoms believe this is unfair practice and should be regulated.

Why do telecoms think that WhatsApp’s services are unfair to them?

For a telecom to ensure one user connects to another, SIM cards, towers, and other expensive stuff is required.

For WhatsApp to connect one user to another, it has to hope that the telecom operators are doing their job.

Can you elaborate on how WhatsApp works ‘Over the Top’ of telcos?

Telecom operators spend a lot of money doing a lot of things, but for the present discussion, they do three important things: a) buy licenses to assign mobile numbers, b) acquire large number of users, and c) assign said mobile numbers to these users.

WhatsApp straight up uses these numbers as usernames, as if it owns this system. Compare this to its parent company, Facebook, where a user’s account cannot be used by another service without Facebook’s authorization. Further, WhatsApp uses these numbers to offer telecom-like services: its users can send a message or call anyone with a phone number. No prior ‘friend request’ required, no privacy concerns. In other words, WhatsApp is less like an internet-only social media network and more like a pseudo-telecom network ‘Over the Top’ of real telecom networks

What is the harm in letting WhatsApp exist as it is?

WhatsApp is a popular service that genuinely saves cost for users. But WhatsApp will not exist if there were no telecoms (and phone numbers), making it a parasite from telcos’ perspective. Their concern is that, like any respectable parasite, WhatsApp will feed on its host until there is no host.

Eventually, we may be left with fewer telecoms. Or no telecoms at all. In which case, everybody will be on BSNL/MTNL and we will all party like its 1989 (watch this video)!

https://www.youtube.com/watch?v=HyPB-PVOyNw

Then why the intense one-sided debate on net neutrality?

Because it mixes the issue of OTT players like WhatsApp with other internet services and websites.

How did that happen?

The same TRAI paper also asked some broad questions on a scenario best described as ‘telecoms ruining the internet for everyone’. The said ruining would happen if telecoms decide to ‘throttle’ (slow down) internet data which passes through their networks to certain internet services and websites unless these services/ websites pay telecoms a fee.

You said ‘if telecoms decide to’. Is this actually happening?

No, the last part is not actually happening; telecom operators are not ruining the internet. If they were, they would deserve the flak, and this hash-tag driven rage will make sense. To get a perspective, compare the premise for this debate in India to the one in the US, where a major ISP, Comcast, did throttle the traffic of Netflix, a popular video streaming service.

To be clear though, telecoms in India do want TRAI to regulate services like WhatsApp.

Can you imagine what will happen if a telecom operator, especially a big telecom operator, decides to ‘screw the internet’?

Yes. Smaller telecom operators will look at this as an opportunity and offer a net neutral internet. Consumers, using MNP, will switch to those supporting net neutrality. Market economics will play out, most certainly in favour of net neutrality.

Why are telecom operators being vilified for something they have not yet done?

Telecoms are big companies doing the government’s job of universal connectivity. Big companies which do government’s jobs are generally objects of wrath. In this case, pre-emptive wrath for an imaginary problem.

Addendum:

I wrote this article to shed some light on the telco side of the story, but some readers have pointed out that I offer no solution at the end. I am thinking of some options, and I will be happy if readers can also think of some and email them to me at anant.kochhar@yippster.com

Addendum 2

One solution maybe to regulate WhatsApp-like OTTs which use telecom-assigned phone numbers as their primary method of user signup, and which have crossed a certain threshold of users, so that they are no longer considered ‘startups’. Because WhatsApp is so huge, regulations may actually be necessary from a security and privacy point of view as well.