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Regulating app-based services harmful to start-ups: Vishal Misra

Interview with Associate Professor, Dept of Computer Science, Columbia University

Sudipto Dey
This article has been modified. Please see the clarification at the end.

New York-based Vishal Misra, associate professor in the department of computer science at Columbia University, and a serial entrepreneur, has been one of the early voices in academic circles to raise questions about the issue of network neutrality since 2008. In an email interview, Misra tells Sudipto Dey Indian regulators should focus their efforts on maximising consumer benefits, and not try to arrive at a middle ground between app service providers and telcos. Edited excerpts:

What is your take on India's approach to regulating OTT (over-the-top) or app-based services?

The job of the regulator is to create the best possible scenario for consumers, to protect their interests. However, the tone of the Trai (Telecom Regulatory Authority of India) document (a consultation paper on regulatory framework for OTT services and applications), as well as public statements, appears to be to 'find a middle ground between OTT providers and telcos'. Neither should be the primary concern for the regulatory body; it should do what's best for the consumer.

How different is the debate over net neutrality in the US?

There are similarities and differences. The similarity is the issue has really caught the public's imagination, and there is a large body of activists fighting for the cause at both places. The difference is in the actual issues, though broadly, at both places, they come under the definition of 'network neutrality'.

In the US, the issue is that of last-mile monopoly for wired broadband. A significant fraction of the US population - 74 per cent, according to figures released by the Federal Communications Commission (FCC) - is served by no more than one internet service provider (ISP), capable of providing broadband speed (defined by FCC as 25 mbps). This gives those ISPs significant bargaining power over content providers such as Netflix. As a result, Netflix has had to sign paid peering arrangements with all four top ISPs in the US. Netflix and ISPs are engaged in a very public battle over this issue, termed a network neutrality issue. Very soon, common citizens took up the cause (aided by celebrities such as Jon Oliver). There has been very little debate in the wireless space in the US over net neutrality.

In what ways is it different in India?

In India the battle is primarily in the mobile space. Most Indians primarily get internet access through mobile providers, and all of these happen to be cellular service providers, too. The advent of OTT services such as WhatsApp and Skype dried up the SMS and call revenues of mobile operators. Now, they are trying to recover the lost revenue by pushing to impose a toll on app-based services for using their network, in some ways similar to paid peering arrangements.

Moreover, ISPs in India are offering limited packages such as a 'Facebook pack' or a 'WhatsApp pack', which goes against the internet philosophy of a single, open network with non-discriminatory access.

Along the same lines, telcos are offering Zero Rating, where for some apps/services, the consumer is not charged for the bandwidth. This is being offered either as an openly commercial product such as Airtel Zero, or something that purports to bring internet access for free to the poor via the Facebook-promoted portal

The sites present on require a lot of imagination to come under the definition of 'essential services' that Mark Zuckerberg (Facebook chief) has said he wants to bring to the underprivileged. All this has led to a lot of suspicion in the minds of activists over the intentions of telcos and tech giants such as Google, Facebook and Twitter, which are promoting Zero Rating in India.

If I had to describe the net neutrality issue by a sound bite, I would say it is about 'competition' in the US, while in India, it is about 'discriminatory pricing'.

How do you see the debate on regulating app-based services in the context of the nascent Indian start-up ecosystem?

There are two issues here - regulating app-based services and zero rating. Both are harmful to the Indian start-up ecosystem. Regulating app-based services would mean apps from independent entrepreneurs start at a disadvantaged position, compared to similar (or possibly inferior) services that might be offered by telcos. Even if telcos do not offer similar services, start-ups would need to sign zero-rating deals with all telcos to remain competitive. This is an additional tax to be levied on start-ups.

If this becomes prevalent in India, there is no saying what tit-for-tat measures other nations might impose against Indian start-ups, constraining these severely in competing in the global market.

You batted for presence of a public broadband to tackle the issue of universal connectivity. How relevant is it under Indian conditions?

No question the track record of government-managed services has been spotty, but the India of today is very different from the India when I was growing up. There is a sense of optimism and can-do attitude in the youth.

Additionally, the internet is a critical part of their lifestyle. I am sure if the government makes it a priority, there is no dearth of talent and dedication in India to make it a reality.

In an ideal scenario, the last-mile infrastructure is publicly-owned and it can be leased by any ISP to provide broadband services to consumers. ISPs should compete on the quality of their service, not hold consumers captive by owning the last-mile infrastructure.

Will it not make more sense to promote competition among players, going by the example of proliferation of mobile telecom services in the country through the past two decades?

Yes and no. It makes more sense because the private sector has shown a better track record in execution. However, digging the last mile is a very capital-intensive exercise.

Once an ISP owns the last mile, it is much better for another ISP to go to elsewhere and dig the (first) last mile. This could create islands of ISP monopolies, much as it has happened in the US.

Also, having multiple last-miles is a waste of resources, as only one is needed. A much better alternative is to have a publicly-owned last mile that can be leased out, much like the British Open Reach system, for which British Telecom owns the last mile, but it is leased in a non-discriminatory fashion to any ISP that wants to offer a consumer broadband service. The wholesale part (last mile) can be publicly owned, while the retail part (broadband access) can have competition among players.

In an earlier version of this article, Vishal Misra's last name was mispelt. The error is regretted.

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First Published: Apr 19 2015 | 10:33 PM IST

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