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<b>Devangshu Datta:</b> For a neutral net

In America, every interested party is trying to get the net neutrality rules reviewed. Currently, the internet remains the common carrier - let's hope this lasts

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Devangshu Datta
Last Updated : Apr 15 2015 | 5:09 PM IST
There was a time when I carried important phone numbers in my head. Nowadays, I am hard put to remember my own number because my mobile performs that secretarial task. Nor can I guess the provenance of an incoming mobile call. If the number is prefixed by "+91", it may be from any Indian network, serviced by any telecom service provider (TSP).

If two people "dial" my mobile number almost simultaneously (do 10-year-olds know the origin of "dialling"?), my TSP will connect calls on first-come, first-served (FCFS) basis. If I dial out, the TSP will not hesitate before connecting to another TSP's network. Every TSP will also connect to emergency numbers. Similarly, the Railways carries goods and passengers on the FCFS basis (with quotas reserved for government).

These are applications of the common carrier concept. One of the trickier aspects of privatisation is the need to deal with natural monopolies in the infrastructure space. Setting up power, water, telecom and gas supply networks and transport systems like a metro, a bus rapid transit system (BRTS) or the Railways requires a lot of working out of legal rights of way across public and private land. Railway stations, power sub-stations, junction boxes, mobile towers, pipeline networks and so on need to be built in convenient spots with appropriate clearances.

Once an entity has set up that infrastructure, that incumbent becomes a natural monopoly. Any newcomer must jump through all sorts of legal hoops for right of way and statutory permissions before it can even try to set up physical infrastructure.

So how do you introduce choice and competition for the benefit of consumers, and prevent that incumbent monopoly from abusing its position? By using common carrier principles. Gas pipeline providers, for instance, have to keep a certain capacity available for third-party gas. Power suppliers are asked to carry power from other generators. TSPs provide voice access on FCFS. Railways provides reservations on FCFS. Of course, every sector has its peculiarities and the devil is in the details when designing specific common carrier rules for a given sector.

What happens on the internet? This is where we head into what is becoming contentious territory. As of now, if you have a data plan with an internet service provider (ISP), you can go to any website or streaming service (unless the website is blocked for some regulatory reason).

The ISP cannot decide, for instance, that it wants to give preference to one email service provider over another. The surfing pattern is the consumer's choice. For instance, if you surf to YouTube a dozen times for every time you go to Dailymotion, that is your business. Your ISP may have a tie-up with Dailymotion. But it cannot force you to go there more often, by refusing to carry YouTube or throttling speeds. The ISP must stay neutral.

An ISP may often be a telecom SP and it could also be the television SP. ISPs would like the common carrier policy to change with respect to the net. They resent the fact that popular websites, web services and social media utilities access consumers on their networks, without paying for the privilege. In effect, they would like to remove net neutrality and to charge both consumers (who are already paying) and the websites (which are currently not paying) to access their networks. This is not as absurd as it sounds simply because TV has got away with this model: advertisers pay and so do viewers.

India doesn't currently have clear laws regarding net neutrality. Indian telecom service providers keep pointing out every so often how it would be a good thing if web services "shared" their profits. America is currently going through a pitched battle with every interested party attempting to influence the regulatory authority, the Federal Communications Commission, to review the net neutrality rules. Currently, the internet remains common carrier - let's hope this lasts.

Twitter: @devangshudatta

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Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

First Published: Nov 14 2014 | 10:44 PM IST

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