NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, May 12, 2015

Hidden under the guise of enabling the Indian population with faster and more reliable services, the major players in telecoms, such as Airtel and Reliance, have adopted new policies that could undermine the basic building blocks of Internet access in India.

In addition, the government’s heavy hand and tendencies toward corruption lead to a dangerous road where monopolies run wild in India and smaller startup technology companies are faced with bowing out or being subjected to high costs to even be able to compete.

While there is no doubt that India is on the rise as a global economic power, regulations have the potential to stop the country’s innovation in its tracks. Most recently, Mark Zuckerberg’s Internet.org partnership with Reliance and the introduction of Airtel Zero — a platform by telecom operator Airtel that will enable content providers to give free apps to consumers — have put the topic of netneutrality and its impact on innovation and entrepreneurship at the center of a heated debate in India.

Real net neutrality is good for the consumer and good for India’s competitiveness but not the contrived one, which is being proposed by some big players who want to establish an oligopoly under the guise of net neutrality.

What appear to be great initiatives to get India’s growing population online, like Internet.org, are actually wolves in sheeps’ clothing. Large companies with deep pockets, like Facebook, have the resources to be placed at the top of the “deck” for consumers, but startups and small developers do not have the money to gain access through negotiations with Reliance Communications or Airtel, two of India’s largest telecommunications companies.

There should be no Internet fast lanes for large corporations: Net neutrality needs to be truly free and not falsely bundled like a social venture. The current trajectory of these regulations is creating a walled garden that blocks innovation and will ultimately cause more harm than good for the Indian entrepreneurial landscape.