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Home >Opinion >Columns >Ajit Pai’s exit might restore the US internet’s neutrality

I have written earlier in this column about Indian-American Ajit Pai (no relation to me), who was made head of the US Federal Communications Commission (FCC) by President Donald Trump. Since Pai was already a serving FCC member since 2012, his appointment did not need to pass scrutiny by the US Senate or Congress. I had argued at the time that Pai’s appointment did not augur well for Americans.

Pai is a Republican who holds extreme 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’, which 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. Put simply, the principle of net neutrality stops internet service providers such as AT&T, Verizon or Jio from manipulating network traffic for discriminatory purposes.

Pai put an end to all that, to the glee of both Big Tech and Big Telecom. He dumped Obama-era net neutrality laws. Despite the oxygen-like importance of internet access, not everyone in the US has access to broadband, and these rules would slow down efforts to provide broadband for all. The Obama administration made attempts to address this disparity of access, which included initiatives to develop infrastructure. Pai cut these measures.

Pai’s rules also allow a carrier such as Verizon or AT&T to restrict access based on which 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 from another search engine.

In contrast, countries like China and the UAE tightly control internet data based on where it’s coming from and 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 voice over internet protocol traffic can only flow through home-grown telecom operators.

The internet world is already incestuous. Telecom providers like AT&T and Verizon have openly moved to acquire Time Warner and Yahoo. There is now news that the US justice department, which is finally rigorously pursuing Big-Tech monopolies, allegedly has proof that Apple, Google and Facebook have separately colluded with one another to boost advertising spending and their own revenues, while using what some consider to be unethical business practices. For instance, Google paid Apple billions every year to be the default search engine on its Safari browser, which is embedded in all iPhones. Facebook and Google colluded in a more subtle way, according to leaked details of the lawsuits, with Google tweaking its algorithmic engines to move traffic to Facebook, and Facebook returning the favour. The good news is that probing and regulating Big Tech, albeit from different starting points, is a priority for both Democrats and Republicans. The question is how much they will be regulated, and how soon.

China’s government has moved to stymie Jack Ma’s Alibaba and its allied businesses like the Ant Group. It has accused Alibaba, China’s largest e-commerce group, of monopolistic processes. The site has 730 million users and has long since grown from a simple e-commerce play into helping its users take small loans, buy insurance and invest their savings. Ant’s initial public offer (IPO), which was touted as the world’s largest ever and was supposed to have come out last month, has been put on hold. Chinese regulators want Ma’s businesses restructured to allow for more competition.

Those of us who think that the world has changed inexorably in 2020 due to the pandemic, and that the future is all digital, are missing two important angles. One, the pandemic is hopefully beginning to end, with breakthrough vaccines having been created. Their distribution will be uneven, though, and it will take at least two years to vaccinate the world’s population.

This will drive a return to physical commerce; humans are a social species and cannot confine all their activities to their online ‘avatars’, which businesses like Zoom, Zomato and Swiggy have relied on for their 2020 growth. These will, no doubt, continue to do well, but their growth is bound to slow as the world gets back to normal.

Second, the regulation of Big Tech and Big Telecom will start looking remarkably similar the world over, now that the dangers of collusion and monopoly power are better understood. Pai now says he will step down when President-elect Joe Biden takes office. This would allow for some peeling back of America’s egregiously non-egalitarian access to the internet. Also, expect cases filed against Big Tech firms in other countries.

Sure, do ride the wave for some time, but be sure to get off in a few months. Oh, and bye, bye Ajit Pai.

Siddharth Pai is founder of Siana Capital, a venture fund management company focused on deep science and tech in India

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