Why does #SaveTheInternet hate free?

We don’t. We love free stuff as much as you do. We love Wikipedia for the stupendous volume of human knowledge it is, and can only wish that everyone in the world has access to it for as low a cost as possible (all costs considered, from phone to data plan). We love our free torrents too.

Who can hate free stuff? Why would we deny someone else getting something for free, whether it’s free data or free services?

Our concern is with who gets to decide what you should have for free.

WhatsApp is free. The WhatsApp folks (now part of Facebook) have figured out how to give you the service for free while thriving as a business. That’s wonderful and we love it. Skype is free too, and also thriving (now as part of Microsoft). We love that too.

So who is Airtel to step in between and tell you they will charge you extra for using WhatsApp or Skype? They did just this in December 2014 and your outrage prompted TRAI to step in and put out their ponderous consultation paper asking if they should formalise licensing arrangements, among other things. Your further outrage prompted this #SaveTheInternet campaign.

We all clearly don’t like TRAI or any telco interfering in a pricing decision between a service provider and you, so consider this further and ask why a telco is interfering again to make something free for you.

Free stuff is great, make no mistake, but if the earlier plan was to charge you extra, what new scheme is cooking to make it free now? Are telcos doing this from the goodness of their heart, or is there an ulterior motive that we have trouble seeing because it has FREE signs plastered all over? The common arguments often advanced for zero rating schemes:

  1. Services like Wikipedia are free. How dare you deny anyone access to Wikipedia? (We aren’t.)
  2. Free data will spread access to the Internet. Limited access is better than no access. (We don’t disagree.)

Our question is simply this: who’s playing the gatekeeper who decides what is free and what is not, and what kind of oversight do we have on them? Gatekeeping on the internet makes one powerful, so one should be concerned the position is not abused. Is it even possible to regulate it?

Case in point: how does Internet.org decide what sites are available for free and what aren’t? Mark Zuckerberg explained on his Facebook post that Facebook works with local governments to pick sites, but to date we have no idea what local government picked the sites that are available in India—we don’t even know which body to file an RTI request with—nor do we know what criteria was used to select them. When Cleartrip withdrew from Internet.org April 15, they said:

But the recent debate around #NetNeutrality gave us pause to rethink our approach to Internet.org and the idea of large corporations getting involved with picking and choosing who gets access to what and how fast. What started off with providing a simple search service has us now concerned with influencing customer decision-making by forcing options on them, something that is against our core DNA.

So while our original intent was noble, it is impossible to pretend there is no conflict of interest (both real and perceived) in our decision to be a participant in Internet.org. In light of this, Cleartrip has withdrawn our association with and participation in Internet.org entirely.

Internet.org’s philanthropic claims have been questioned widely:

Or if you think Internet.org is only for poor people and doesn’t affect you, consider Airtel Zero. Airtel wasn’t beyond some creative twisting of facts in their recent pledge, so any claims of Airtel Zero being an open platform with fair and transparent pricing deserve scrutiny. When Flipkart backed out of Airtel Zero, they said:

We at Flipkart have always strongly believed in the concept of net neutrality, for we exist because of the Internet. Over the past few days, there has been a great amount of debate, both internally and externally, on the topic of zero rating, and we have a deeper understanding of the implications. After reviewing implications of zero rating deeply, we reached the conclusion that it doesn’t meet our standards of net neutrality and violates the principles that we stand for

Just what did Flipkart see in Airtel Zero that bothered them so much? Here is Flipkart’s CTO Amod Malviya going into more detail. Take a moment to read it.

Still confused? Aravind Ravi-Sulekha identified the precise issue days before media attention took off, so you likely missed this.

Aravind notes that you as a customer have a choice of which telco you want to do business with. The choice is completely yours from within the limited range of telcos and plans on offer, and telcos compete to present you the most attractive plans. Since telcos use licensed public spectrum and are effective monopolies on that slice of spectrum, limiting competition, TRAI has a job to ensure competition remains fair and free of cartelisation. (Their effectiveness at this is a different matter.)

However, for app developers hoping to zero rate their apps to gain more users, there is no competitive pressure on prices. If Airtel wants Re 1 per MB for zero rating (that figure being the example from their press release), the app developer has no choice but to pay what Airtel is quoting, “fair and transparent”. There is no negotiating around this figure because there is no other way to access the telco’s users. App developers have a binary choice: pay up or drop out. As Amod notes, app developers will be compelled to pay up to compete with other apps in the same category, so it only requires one to kickstart the scheme—and Airtel has indeed done this, offering free data with their Wynk music app.

Vodafone or Idea may offer Rs 0.50 per MB to compete with Airtel, but all zero-rated plans are free for the end user, so there’s no compelling reason to switch. If users don’t switch, the lower price offer has no value for app developers. Developers have no recourse but to recommend you try their app on another telco’s network.

(In this case, accidentally.)

What can a regulator do to ensure fairness in such a situation? No one has a clear proposal.

Actual data rates today are in the range of Rs 250 per 1 GB or roughly 25 paise per MB, a quarter of Airtel’s example rate. If app developers have to pay four times what a user pays—and unlike a user have no choice—that burden will indirectly be passed back onto users, while ensuring data rates remain high. Users are now paying 4x as much for data on a purpotedly free plan, routing their money via an app developer’s pocket so the telco appears untainted.

In summary, we don’t hate free. We just think schemes like Internet.org and Airtel Zero are disingenious, handing power without oversight to the sort of entity that has a known history of abusing this power. Everybody deserves Wikipedia for free, but not if it destroys the Internet in the process.

Do we have a better idea that improves internet access without potential for abuse? We don’t, which is why we are asking you to engage with the problem instead of blindly accepting the telco agenda.

Update: One recurring refrain is that bandwidth-hogging apps like VoIP and video strain already scarce spectrum, so they should be regarded separately from light activities like browsing. However, a byte is a byte, no matter whether it's a byte of video or text. Every byte strains spectrum in the same way, so the obvious solution is to charge heavy users more, and this is exactly what telcos are already doing. It’s making them a lot of money too.

(This post may be reproduced freely under the Creative Commons Attribution CC-BY 4.0 license.)

Kiran Jonnalagadda

Kiran Jonnalagadda believes in open source and free markets and helps people in technology share their knowledge via HasGeek.com. Posts signed with Kiran’s name should be considered Kiran's opinion.