Explained: What the US U-turn on net neutrality means and how it will affect India

More than two years after Facebook’s Free Basics mess brought net neutrality to the headlines, inspiring a public movement to keep India’s internet free, the issue is back. After months of speculation, the United States Federal Communications Commission announced on Tuesday that regulations to protect net neutrality would be repealed in a month. The move is bound to inspire plenty of commentary and pushback, and will have repercussions around the world, including in India, where the country’s telecom regulator is getting closer to framing more regulations on net neutrality.

In a proposal titled “Restoring Internet Freedom”, Federal Communications Commission chairman Ajit Pai said the rollback would mean that the United States government would “stop micromanaging the internet”. Pai has been a staunch opponent of net neutrality and a decision like this has been expected for some time now, though that has not stopped critics from arguing against a move that many believe will harm consumers and businesses alike.

The proposal has led to a fierce backlash from activists. For example, the social network site Reddit, which has been a strong supporter of net neutrality in the past, has replaced the thumbnails of all links that mention net neutrality with a banner proclaiming, “If you’re not freaking out about Net Neutrality right now, you’re not paying attention.”

What is net neutrality?

Net neutrality is the principle that all data on the internet should be treated equally. That way, no internet provider can artificially slow down or speed up a website or service. They also cannot put different price tags on different parts of the internet.

This can be roughly compared to electricity: just like an electricity company cannot charge for power based on which appliance is being used, internet providers cannot discriminate between the different kinds of internet traffic they transport. For a broader explanation of the concept, read this.

The main idea of net neutrality is to ensure that everyone has equal access to the internet. If any one internet provider is able to create a corner of the internet that is cheaper than the rest, it could promote certain businesses and platforms – like Netflix or Facebook – over others. This fragmentation of the internet, in which some websites or services are either cheaper or more expensive or served to you faster, is what net neutrality guards against.

What were the US’ net neutrality rules?

The net neutrality rules enforced by the Federal Communications Commission’s Open Internet Order in 2010 prevented internet service providers from blocking websites and services, or slowing them down arbitrarily. In 2014, a United States court rolled back these rules, saying such an extent of regulation can only apply to so-called “common carriers” like electricity companies.

The following year, after intense public activism, the Commission cancelled a plan to allow internet service providers to build “fast lanes”, where websites that pay the service providers can be given preferential treatment. A fast lane would allow a service like Netflix to be faster to access than say YouTube, simply because it has made a deal with the service provider. Internet service providers were then re-classified as common carriers, allowing the Commission to continue to regulate them.

These protections from President Barack Obama’s time are now set to be rolled back by Pai, who was then one of five commissioners in the Federal Communications Commission. Pai had vowed to repeal the regulations when he was sworn in as chairman in January. His repeal has to be voted through by the current commissioners. Since the commissioners are partisan appointments and three of the five are Republican appointees like Pai, the repeal is likely to make its way through.

What happens without net neutrality?

Without net neutrality, American internet service providers will be allowed to demand fees from websites to treat different websites and services preferentially. This would make way for the fast lanes. This system would benefit larger and established companies more, as they are in a position to negotiate a better deal with the service providers than smaller companies, who have so far benefited from the level playing field of the internet.

The United States rules already breach another tenet of net neutrality, which guards against what is known as zero-rating. Under this, service providers can offer certain internet services to consumers for free, without counting those as data usage at all. American phone network T-Mobile, for instance, has a programme called Binge-On under which mobile data customers can stream a limited set of video and music services for free, without it counting against their data allowance.

It is this aspect of net neutrality that caused a furore in India two years ago, when Facebook offered to introduced zero-rating in the country first through internet.org and later Free Basics, which provided a scaled down version of some websites for free. Although such programmes seem consumer-friendly, they too privilege certain services over others. For example, an internet provider might allow someone to use Facebook for free while charging them for Wikipedia. In effect, this also creates an unequal playing field and makes it easier for larger, richer firms to prevent smaller ones from growing.

With the Federal Communications Commission proposal likely to permit both fast lanes and zero-rating, America’s internet is expected to change radically in favour of large, incumbent players.

What does that mean for India?

Last year, the Telecom Regulatory Authority of India issued a prohibition on pricing different websites and services differently. This led among other things to the exit of Facebook’s Free Basics service from India. Before this prohibition, internet providers like Airtel and Idea offered special tariffs that discounted usage of services like WhatsApp and Facebook. This regulation followed the net neutrality principle by outlawing the practice of setting different prices for different parts of the internet.

More recently, the regulator is in the process of winding up a wider consultation on net neutrality. This time, it is looking at how internet providers manage data traffic, and whether this can lead to discrimination that violates net neutrality. It is also looking into how internet service providers can be more transparent about how they handle data. While internet service providers have resisted regulation in their submissions to the regulator, many seem to be in agreement that treating some content preferentially over others should not be allowed.

If the Telecom Regulatory Authority of India issues a regulation like it did last year, there would be more clarity on practices like having different speeds for different websites and services, as some internet service providers in India are reported to be doing. If the regulator takes a decisive stand on such matters, service providers may be required to implement strict safeguards to protect neutrality, and disclose information on whether their traffic management techniques lead to any significant differences in internet access that violate net neutrality.

But whichever way India’s telecom regulator goes, the American decision will still have a huge impact. A large number of the worlds biggest internet platforms and services emerged from the level playing field they had access to in the United States, with the American market as their primary initial audience. This holds true for everything from Google to Amazon to YouTube to Facebook. The end of that level playing field in the United States, at the very least, suggests that those seeking to innovate may have to go to other countries where they do not have to compete with those who have more money.