The Pai rule
Earlier this year, I wrote a column about Indian-American Ajit Pai (no relation to the author), who was made head of the Federal Communications Commission (FCC) by US President Donald Trump in January. Since Pai was already a serving FCC member since 2012, his appointment did not need to pass scrutiny by the US Senate or Congress.
Pai is a Republican who holds right-leaning views on how “open” the internet needs to be. He prefers that the internet be a “free market” rather than a resource that is neutrally available to all who seek access to it. Net neutrality, as per Wikipedia, means that “Internet service providers and governments regulating the Internet should treat all data on the internet the same, not discriminating or charging differentially by user, content, website, platform, application, type of attached equipment, or mode of communication”.
All data over the internet travels in “packets” and these packets can contain anything—voice, emails, instant messages, advertising, e-commerce, and news. An open internet allows for all packets to be treated the same, regardless of what information the packets carry, or from where they have originated. Under net neutrality laws, it is legal to charge for greater consumption of these packets, which means a heavy user of data packets would pay more than light users. But it is not legal to discriminate, whether through pricing or other methods, based on what the packets themselves contain, where they come from, or who is accessing them.
Last week, Pai issued proposals to dump the net neutrality laws that are currently in effect in the US. Despite the oxygen-like importance of internet access in the US, not everyone in the US has access to broadband, and these rules would slow down efforts to provide broadband for all. India is even further behind. Thankfully, the principles of net neutrality were established in India last year by the Telecom Regulatory Authority of India (Trai).
The Obama administration made attempts to address this disparity of access, which included initiatives to develop infrastructure. Pai is now attempting to cut these measures. His proposals will reclassify basic cellular internet access as sufficient to establish “neutrality”, even if it is more expensive, offers different connection speeds, or is otherwise inferior to other internet connections. This essentially means a user with basic 2G access is considered to have the same access as someone with 4G/LTE or a fixed broadband access point. Instead of continuing to make high-speed internet more widely available in the US, Pai’s regulations would just move the target closer for internet service providers on what qualifies as “equal” or “neutral” service.
Pai’s rules would allow a carrier such as Verizon or AT&T to restrict access based on what businesses are willing to pay them. For instance, if a web search engine paid more for services to these providers than other search engines, then its search results would be given priority and would reach consumers sooner than content from another engine would. Carriers could even ask their users to pay a separate fee to access a different search engine. This would have a direct impact on revenue, since search engines make money through advertisements, and a larger, captive user base means more revenue.
The internet world is already incestuous. For example, Verizon owns Yahoo, which it acquired earlier this year. AT&T is trying to acquire Time Warner in a copy-cat acquisition but has run into a tough spot with regulators—for reasons other than net neutrality. In the absence of net neutrality regulation, Verizon could discriminate against customers who utilize a search engine other than Yahoo by reducing connection speeds, or even stop them from accessing another search engine such as Google or DuckDuckGo.
Itemized internet packages are already a reality in countries that don’t have net neutrality legislation, and were the route that Facebook and others tried by using the cunningly named term “free basics” to circumvent the imposition of net neutrality rules in India. Thankfully for Indians, Trai, after reaching out to the Indian public for feedback, took a decision in February 2016 that prohibited telecom service providers from levying discriminatory rates for different packet types, thereby effectively establishing net neutrality regulation in India.
Countries like China and the UAE tightly control internet data based on where it’s coming from, and based on what kind of information the data packets contain. For instance, the UAE does not allow subscribers to make calls over web-based alternatives such as Viber, instead mandating that VoIP traffic can only flow through home-grown telecom operators. China’s internet market is famously closed, thereby allowing home-grown internet firms a distinct advantage. In other countries which do not have net neutrality laws, providers offer mobile internet packages comprising different types of services. Citizens of such countries might have to pay a certain amount to access Facebook and WhatsApp, and a separate amount to chat with friends via iMessage or Skype.
Under Pai’s rules, if an internet service provider decides that it does not want to allow users to access a certain type of content, it could slow down connections to those sites, and even block them completely. This amounts to privately sponsored censorship, at a time when many observers feel that the internet should become more open. Today’s world is one where fake news, misinformation and polarized views are increasingly easy to broadcast—and if firms can ensure captive audiences beyond what they are already capable of doing simply because of their large user bases, we are more at risk. In the non-internet world, this is akin to saying that if I subscribe to newspaper X which holds a certain set of views, newspaper X can block me from subscribing to newspaper Y, which holds a different set of views. The very idea is ridiculous.
Pai’s rules do not augur well for Americans.
Siddharth Pai is a world-renowned technology consultant who has personally led over $20 billion in complex, first-of-a-kind outsourcing transactions.