Imagine paying for tweeting or updating your Facebook status from your phone, or for accessing Gmail on your computer. Imagine having to pay for all the free internet services. A decision due to be taken over the next couple of weeks will drastically impact your usage of the Internet.
The World Conference on International Telecommunications (WCIT), scheduled to be held this December, will decide a new set of standards and regulations for telecom, by updating the International Telecommunication Regulations (ITRs), and bring under its purview the Internet. The version of ITRs currently in force were agreed upon in 1988, and did not anticipate or include provisions for internet, mobile phones or even the possibility of receiving data from across the globe in one single device by any user. So expect changes as several policy decisions are negotiated and agreed upon at the WCIT in December 2012 by the member countries of International Telecommunication Union (ITU).
Although India’s draft proposal appears to be a closely guarded secret (Why?), here’s an overview of some changes that will affect Internet users and businesses across the globe.
Impact on Internet Services
Skype, Whatsapp, Facebook, Twitter, E-commerce sites like Flipkart, Jabong etc: These are Over The Top or OTT services that run above the basic Internet network and have so far not been charged for by the internet service providers. Some telecom operators feel that these have been eating into their margins.
With a larger goal of managing the increasing traffic and quality of service, the internet service providers may be allowed to charge for services that run above the basic internet connection, and other businesses like Flipkart, Jabong, Facebook, Twitter, Skype. Remember that, in India, Airtel has been particularly vocal on some of these issues, saying that companies like Google and Yahoo should be paying it for providing customers access to their services.
· For users: If the user is charged additional charges for using these services, the propensity to use and/or buy on the Internet could go down. This may affect businesses like Flipkart, Jabong, Facebook, Twitter, Skype
· For eCommerce Businesses: If businesses are charged for allowing free, better or preferential access to these services, or if they have to pay more for marketing their business, the cost of operating these businesses will increase, which would lead to an increase in cost of goods for the consumer.
· For Media & Content Businesses: News may no longer be free. News businesses are already struggling with the cost of creating content not being adequately compensated for by online advertising, and an increase in cost means that subscription fees might become applicable.
· For advertisers: If OTT businesses are advertiser driven, then this could lead to an increase in advertising costs on these platforms. For example, placing an ad on Facebook may become more expensive to compensate for this pricing.
· Neutrality of competing businesses: For example, a telecom provider like Airtel that has its broadband services and mobile internet services, may charge Skype for the running services on top of the data/Internet connection. Airtel could very well leverage their portfolio of services while they increase the prices of Skype and similar services. This might also change the call pricing dynamics in the country. While this is a possibility, it may work out differently as well.
Impact on Quality of Service:
With respect to net neutrality, currently a minimum Qualify of Service (QoS) needs to be maintained, and this was a standard set in 1988. Under the principles of net neutrality, no particular service gets preferential access over another. However, the possibility of multiple services going to a single device based on IP was not something that was accounted for and so even service providers don’t have control over the quality of each of their services.
· Relationship between Content And Services Companies & Telecom Operators: Agreements may need to be made between Internet Service Providers like Reliance, Airtel, Aircel, and content & application companies like Youtube, Network 18 group etc for ensuring better QoS for their applications and content which in term will affect the other players in the market. For example, if a service provider like Airtel gets into an agreement with a content aggregator like Youtube ensuring high quality of service exclusively to their website, the smaller content providers are likely get seriously hit. Also, the cost a partner pays to be a part of Youtube may also go up skewing the market dynamics.
· Impact on User Behavior: The end user cares about the quality of content which he/she reads/listens to/watches. He/she would switch to a service that provides better quality, in our example, Youtube, leading to a monopoly in this space.
Impact on International mobile roaming rates:
International call rates tend to be high, with the intent of subsidizing domestic call rates: This is set to change.
Possible impact on Mobile VAS: With a uniform roaming price policy, several VAS providers will have the advantage of making their services available to a larger market. However, this may affect large providers forcing them to bring down their pricing
Impact on Users:
· Internet Subscription Fees: The subscription fee to a basic internet connection may become lower but users may be required to pay additional costs for other services that run above them like Skype, Gtalk, Gmail, Facebook, Twitter etc.
· Access to News: Users may be paying to subscribe to the services of information disseminating services like e-newpapers, magazines etc
· Additional costs may be introduced while users shop on ecommerce sites like Flipkart, Jabong, or book a ticket on Bookmyshow.com etc which might not usually come to the consumer’s notice due to the strategic positioning of this information on their websites in really small fonts.
· The choice of content providers that users have, may drop drastically due to the bad quality of access offered to most.
What’s interesting is that, apart from the possibility of such implications, the Indian government has drafted a proposal for India without consulting some of the key civil society stakeholders. Only some businesses have had the chance to see the draft which was in fact drafted without consulting them.
Rajeev Chandrasekhar, MP, RajyaSabha has in fact written a letter to Kapil Sibal, Minister of Communication and Information Technology regarding the discrepancies in drafting this proposal. If Chandrasekhar’s observations are true then the entire nation is up for a long ride with policy implications that will affect the entire nation until the next WCIT which might take another 25 years. We never know.
Note: If you have a copy of the draft proposal that has apparently been circulated by the Indian Government, please do mail us a copy on email@example.com. Sources will be kept confidential.