In an open letter, the founders of over 120 startups, including the likes of Nikhil Kamath of Zerodha and Vijay Shekhar Sharma of Paytm, have urged India's telecom regulator, TRAI (Telecom Regulatory Authority of India), to uphold the principles of net neutrality and refrain from implementing any discriminatory measures that could lead to excessive regulation of internet services.
Their demand is to have an open internet.
“Each of us set out on this entrepreneurial journey dreaming of creating world-leading companies from India. There is no reason why an Indian company cannot be the next Google, Facebook or Amazon. We know that you share our dream; you put it into words: Make in India. We share another dream with you, the dream of a Digital India. We dream of this as Indians, and also as businesses that wish to serve a fast-growing Indian market. The Internet gives us all the potential to do that.
But for these dreams to come true, we need an open Internet,” an excerpt from the letter read.
The Internet is a single, global market where anyone can offer a product and be reachable by every user, said the letter. This results in global competition and exchange of ideas, and drives innovation and progress.
According to the startups, if internet-enabled start-ups or online service providers had to first obtain a government license, or pay each Internet Service Provider (ISP) in the world—there are tens of thousands of them—this global market and competition, and the innovation and progress, would all disappear.
The letter said if ISPs—which now includes telecom operators—are allowed to strike deals that favour some online services over their competitors it will prevent promising start-ups from using the Internet and end all of them flourishing.
“The western companies that dominate the Indian internet ecosystem today will use their deep pockets to perpetuate their position. The few start-ups that can afford it will be forced to find growth in foreign markets before they can return to India with the funds to pay ISPs. The rest will have to shut shop. This would be catastrophic for our budding start-up ecosystem,” said the letter.
Cellular operators claim that providing internet access is not profitable enough to expand infrastructure. However, the startups that put together the letter feel that his claim contradicts their own annual reports.
The fact that they haven’t increased prices and continue to advertise their internet plans heavily demonstrates that these claims are untrue.
According to the letter, some telecom operators and large foreign companies try to pit the idea of a Digital India against the principle of an open Internet.
“They attempt to justify a form of discrimination called zero-rating by saying it allows them to offer free internet for the poor. We must point out that these offerings are neither free, nor for the poor. They are not free but bundled with a paid mobile connection, just as when a toothbrush is given free with toothpaste, it is really priced together as a bundle. The handful of sites that they offer in their packages—a few dozen at most—is a mere sliver of the over 100 crore websites that the Internet currently offers,” the letter claimed.
These offers according to the startups will also cause a collapse of competition as crores of Indians will be locked into a few services—those that the ISPs have relationships with—resulting in a decline in quality of service and progress.
There are other ways to bring new Internet users gently into the net without losing money.
One example suggested in the letter is that of free-to-the-end-user bundles that are supported by advertising, similar to what the television industry does. Such plans leave it to the user to decide how his Internet plan is used, which is a powerful incentive to start-ups to provide services that benefit the novice and the disadvantaged.
“Our desire for a level playing field on the Internet is shared overwhelmingly by consumers. Over the last two weeks over 10 lakh of India’s best-informed citizens have written to TRAI to ask it to uphold equality on the Internet. Many foreign nations share these views as well. Several, most recently Brazil, have passed laws to ensure network neutrality or non-discrimination by ISPs; many more countries like the US and European Union are in the process of doing so,” said the letter.
While advocating for the strict enforcement of network neutrality and urging the prohibition of all discriminatory practices employed by Internet Service Providers (ISPs), the letter also drops some suggestions. This includes zero-rating, throttling, blocking, paid prioritization, toll-gating, and any similar tactics.
The startups also requested TRAI to transparently publish all responses, counter-responses, and additional materials related to the consultation on its website and also called for open-house debates in major Indian cities following the conclusion of the consultation.