No Ifs, No Buts: Digital India Needs a Neutral Internet

The Net Neutrality debate has been raging fiercely in India over the past several months. At MakeMyTrip, India’s online travel and digital-commerce pioneer, we have been observing it quietly but with great interest. We have also been working as part of several organizations to influence the debate toward a fair, neutral internet.

Our Position

As a key player in the Indian Internet industry, we have worked closely with the Internet and Mobile Association of India (IAMAI), of which we are a member. MakeMyTrip completely endorses that organization’s position (submitted to the Department of Telecom [DoT] Committee on Net Neutrality), which:

• opposes VoIP licensing in any form;
• argues for strong safeguards against misuse of network management by operators; and
• oppose zero rating of any type, paid unpaid or any form of prioritization.

IAMAIpFocus

In its document, the IAMAI focuses on six points from the DoT report: 

• The term ‘OTT’ is misleading and incorrect, for it presumes the entire Internet and online services ecosystem to be a telecom service, with every online service riding ‘over the top’.
• The core principles of Net Neutrality are well defined and confirmed by the DoT report. This is a positive aspect of the report, in that it recommends steps to protect and enforce Net Neutrality via existing regulatory measures.
• The DoT correctly suggests keeping most internet content and services (including messaging and chat apps) outside the regulatory ambit, as their proliferation needs to be encouraged. Yet it wants to regulate and license VoIP for domestic use, based on several fallacies such as regulatory arbitrage. The regulatory and licensing framework applies only to telecom’s physical infrastructure rather than content or services using it. There is no question of Internet apps and services ‘bypassing a regulatory regime’ that was never applicable to Internet apps and services in the first place. It talks of pricing arbitrage when there isn’t one: VoIP provides a lower cost service due to innovative technology. The DoT suggestion will end up punishing Indian consumers and developers of VoIP applications who have created low-cost, data-efficient tools.

• Zero rating: The DoT proposes to allow this subject to regulatory compliance. We disagree. We completely oppose zero rating, paid or unpaid prioritization or discrimination, as that will ultimately limit competition as well as consumer choice.
• The DoT report calls for Net Neutrality-compliant traffic management practices, with disclosures and oversight to maintain QoS and transparency. But ‘traffic management’ should not be misused to prioritize services. A strict regulatory framework is needed to ensure this.
• National security is too important to mix up in this discussion, and should be taken up separately. 

Suggested Revenue Loss

The IAMAI report supports its contentions with facts and a range of data to show that the story of operators ‘revenue loss due to VoIP apps’ is complete fiction.

Data now contributes to 10 per cent of revenue; this is projected to 23 per cent by 2016. Data revenues would grow at a 40 per cent CAGR over 2014-2018, leading to an over 12 per cent  increase in industry revenues over the same period.

Leading financial analyst Deepak Shenoy’s blog post shows, from TRAI data, that ARPU (average revenue per user per month) has gone up by Rs 5 in a 15-month period.  While call and SMS revenue is down by about Rs 3.40 per user per month, data revenues are up by over Rs 10.40. As Mr Shenoy writes: ‘This is not cannibalization; this is a new business model!’

Any form of restriction, discrimination or favouritism could jeopardize the telecom industry growth rate, starving the goose that lays the golden eggs.