1. Should SMEs bother about net neutrality?

Should SMEs bother about net neutrality?

You have heard of small start-ups like Facebook and Google making it big.

Published: April 24, 2015 12:03 AM

You have heard of small start-ups like Facebook and Google making it big. The story usually goes like this, belief, passionate entrepreneurship and abracadabra, but none talks about the secret ingredients. Well one of these secret ingredients is a level-playing field. What this essentially means is that your neighbourhood tea seller could become the Prime Minister of your country (equal opportunity to all without discrimination). But in a country that is constantly divided by cast, creed and colour, the internet seems to be the last level playing field left.

The internet doesn’t care who you are or what you do, it will treat you in the same way as it treats companies like Facebook (and they don’t like that). It is because of this reason the internet is a utility for anyone and everyone. Want to impress your partner? Google it; feeling sad in a country far away from home? Tweet it; have something on your mind? Share it; can’t decide what’s the meaning of your life? Search for it on the internet. But there are initiatives like internet.org and Airtel Zero that want to take this away from all of us.

Net neutrality has been a global issue for quite sometime now but it is an issue that has very recently found a spotlight in India, the reason for that is, Airtel last year tried to charge for over the top services (OTT). The services that are classified under OTT services are Whatsapp, Skype, Viber, SnapChat, etc. This was the first time ever in India that a company had tried to differentially charge for services that are essentially provided by the internet, forcing people to think about net neutrality which was till then a non-issue in the Indian subcontinent.

The other aspect to this issue is being raised by small and medium enterprises that provide their services via the internet. Till now the internet has been a level-playing field and has worked on the principle that all data, no matter who generates it or where is it going, has to be treated equally. This generates an environment where SMEs can compete with global players solely on the basis of the quality of the services that they provide and also on the relevance of their services to the consumer. The absence of net neutrality does away with all of this and allows big corporations to pay the consumer’s internet service provider (ISP) to beam their content at greater speeds than the rest. It also gives the ISPs an opportunity to make profits from both the corporations and also the end consumers.

The SMEs mostly are unable to pay such costs to the ISPs. This affects their long-term and short-term sustainability. In the absence of net neutrality, it will be immensely difficult to survive on the internet for start-ups and SMEs. Most internet start-ups are not revenue neutral for the first three-five years; they are mostly sustained by funding from venture capitalists and investors. In the absence of net neutrality these start-ups immediately start to look less attractive to investors, so the chances of sustenance go down dramatically.

Net neutrality gives SMEs the ability to exist on the internet even while offering a limited number or services. It also gives them the confidence to experiment with their product without taking too much risk. The current environment of the internet equally supports SMEs and the bigger corporations, but in the absence of net neutrality the SMEs immediately lose their competitive edge and the ability to innovate.

Abhinav Chaudhary

The author is co-founder, Smartprix.co, an online comparison shopping site

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