Thoughtscapes: March 2015

You will have to pay to access Google, Gmail, Yahoo; MSN; banks like SBI, HDFC or ICICI; Flipkart and Amazon; Skype and Twitter, or any apps requiring internet access.

Free Internet

Facebook and Reliance Communications Ltd have tied up to bring internet.org to India in an initiative described by Mark Zuckerberg as one to "bring connectivity for everyone". What this means on-ground is that Reliance customers in Mumbai, Maharashtra, Gujarat, Andhra Pradesh, Chennai, Tamil Nadu and Kerala will have "free access" to 38 websites with zero data charge across both the 2G and 3G platforms. Any access to any other website will incur charges.

Among the 38 websites and services users will access are Facebook and Facebook Messenger, search (via Bing) or Sports (ESPN Cricinfo), Olx, Cleartrip, BBC, Reuters, ESPN, India Today, Hungama, news aggregator NewsHunt, Wikipedia and local government relations site AP Speaks. Other general services include travel, weather, sports and parenting information.

This means you will have to pay to access your favourite search engines like Google; email accounts such as Gmail, Yahoo or MSN; banks like SBI, HDFC or ICICI; insurance companies, e-commerce sites like Flipkart and Amazon, social networking tools like Skype and Twitter, or any apps requiring internet access.

This is like a phone company telling you that they will give you a free phone, but you can only talk to 38 phone numbers who have partnered with them to draw you to their services. It is like going to a library and being told you can access books for free as long as they are on the list of the pre approved 38 that are made available. Such a service is not net neutral or does not treat all content on the network identically.

The cost of free

Nothing in life comes free, and nor does internet on internet.org. In fact the cost of internet.org is too high for India to bear. It destroys the ability for you to allow your website to be accessible to the whole world, ensures a start-up can never have a level playing field, and can even disable a small business from reaching to their customers. This will mean that, for example, a freelance journalist will face a barrier in reaching out to a wider audience via her blog, or stop an e-commerce website from reaching its market.

The many small businesses that provide service to a few are called the long tail of business. The long tail can reach out to their customers through a net-neutral internet. Research over the last 15 years has shown that the long tail of business generates at least as much revenue as the few large companies that provide services demanded by the many. This means that the long tail of business doubles the economy. This long tail is exactly what has the potential to double India's GDP.

Unless internet.org is checked from ending net-neutrality, it will not be long before other ISPs follow internet.org in ending net neutrality by making exclusive deals with websites for access, speed, pricing or bonus features. In the absence of a net neutral internet, the long tail of business cannot reach out to their customers. Without the long tail of business earning revenues the economy can no longer double.

Clearly internet.org will kill what Finance Minister Arun Jaitley has claimed is India's potential of more than 9% growth rate.

The business models of ISPs

Traditionally, consumers of the internet are customers of ISPs. The ISP serves the need of their customers to access any website on the internet. It is this value proposition that has caused the internet to grow rapidly. The internet did not grow because someone gave it for free. It grew because it provided value to the customer.

No ISP is a charitable institution. Not even internet.org. Without revenues that exceed the costs they would not be in business. So how can internet.org be in business? It is evident that they no longer look at the consumer of internet as their customer. Instead they look at the business wanting to reach out to customers as being their customers. They are not here to give the poor or the excluded internet access. They are not here to bring connectivity to everyone. They are here to provide their customers with customers. They are here to bring customers to the few who can offset the costs of reaching to the customers through them.

In this case, internet.org customers may well join for "free" access. As customers access the "free" 38 sites, Facebook will shrink its own user posts as a large chunk of them are drawn from other websites on the internet, which will no longer be accessible. internet.org's customers will no longer reach the network of networks, but the network of internet.org. As internet.org grows, the internet will shrink. So while internet.com will attract customers in the short run, they will shrink the industry in the medium term. Their own private interests will be better protected if they protect access to all websites on equal terms.

It is clear that internet.org is misguided or is working under the assumption that they do not care if the size of the internet shrinks as long as their share in the pie is bigger than when the internet is larger.

Business models using internet channels

If you are a financial institution who hoped to use the internet as a channel to deliver financial services you should be seriously worried. How many ISPs are you going to pay to ensure your websites are available to your customers?

If you are an e-commerce company providing services or goods you should be prepared to shrink your business or even fold up. It is surely not possible to pay all those ISPs to keep your business afloat as some of them may even begin claiming a percentage of your transaction.

If you are an entertainment, media or education organisation, you will no longer be on a level-playing field, as not only will you have to pay to reach your audience but your audience will face hurdles of cost, speed or preference in reaching you.

Start-ups can no longer hope to have a flat world as they need to work across countries with their own ISPs to access customers across the world.

Governments cannot assume that their websites are equally available across the country or perhaps even display identically.

Unless internet.org and other similar projects are checked, the end of internet as we know it may have begun.

Options for the government

Selective free access to certain websites is against the principles of net-neutrality. This is a suicidal step for the Indian economy, India's IT and telecom businesses, the government's ambitions of Make in India and disenfranchises and excludes every Indian in the information era.

FB founder Mark Zuckerberg met Prime Minister Narendra Modi in October 2014 and is said to have discussed internet.org as a means to "bring connectivity for everyone". What he meant was bringing 38 websites to everyone. internet.org also constitutes monopolistic and restrictive trade practice under the Monopolies and Restrictive Trade Practices Act, 1969 and unfair trade practice by providing misleading advertisement and making false representations. Under this Act the government cannot only prohibit the concerned undertaking(s) from continuing to indulge in a monopolistic trade practice but also regulate the service to ensure net neutrality.

The government must rise to the occasion to protect public interest by ensuring that in order to continue its activities internet.org is made to offer equal access to all websites on identical terms.

38 websites Mark Zuckerberg believes "bring connectivity for everyone"

1. Aaj Tak: Read news in Hindi

2. AccuWeather: Get updated weather information

3. amarujala.com: Read news in Hindi

4. AP Speaks: Engage with local government

5. Babajob: Search for jobs

6. BabyCenter & MAMA: Learn about pregnancy and childcare

7. BBC News: Read news from around the world

8. Bing Search: Find information

9. Cleartrip: Check train and flight schedules & buy tickets

10. Daily Bhaskar: Read local news

11. Dictionary.com: Search for meanings of words