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What's wrong with this? They're not preventing you from paying for Internet access, they're offering some access for free. People in India are free to start com

What's wrong with this? They're not preventing you from paying for Internet access, they're offering some access for free. People in India are free to start competing ISPs.

sumitviii 12y ago
ISP's have to buy license from government. But a HN post showed a way to tunnel normal traffic through FB chat[]. :https://news.ycombinator.com/item?id=9203946 https://news.ycombinator.com/item?id=9203946
- dreamdu5t 12y ago
  Neither Facebook or Reliance Communications Ltd prevent anyone from obtaining those licenses.
nitrogen 12y ago
See https://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29 https://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29 for one example of how giving something away for free can be net worse for the economy/world than charging a fair price for it. Another issue is what is given for free. If free access is given to something that is 80% of what they need, people will have reduced incentive to buy 100%, shrinking the market for the 100% solution, raising its price, and keeping it out of reach of most people. As an analogy, giving people free low quality food could discourage them from high quality food, and the lack of market for good food could drive up its price further.
- gojomo 12y ago
  If you're swayed by that logic, should perhaps Google be forced to charge users for web search, and Android, and their other "free" offerings that put smaller competitors at a disadvantage?
  - captn3m0 12y ago
    The difference here is that of "service" and "utility". Google can offer its services for free. However, it should not be allowed to partner with a utility to make its services free, if that makes sense.
  - adventured 12y ago
    You won't get a response to that, for the same reason you won't get a response to: should all Linux vendors be forced to charge prices comparable to Windows, because otherwise they're dumping? And of course OpenOffice should be made illegal under that same logic.
    - pmontra 12y ago
      They also give you the source code. That makes the whole issue so different that I won't use Linux and OO as an analogy for this Indian case.
  - simonh 12y ago
    Google being add supported doesn't directly raise the cost of competing services. Conversely Facebook making a deal to make accessing itse service free on a paid network has the direct consequence of making the cost of using competing services go up. The cost of free access to Facebook has to be borne by somebody, if not the ISP then the customer has to pay it when they acess non-subsidised sites. Internet.org is not about giving things away for free, it's about a cartel using their combined market power to negotiate subsidies and fix prices in order to distort the market.
- dreamdu5t 12y ago
  "net worse" by what measure? How is a "fair" price determined, and by whom?
cookiecide 12y ago
Basic telecommunications infrastructure in India is heavily regulated by a government that once actually proposed banning all VoIP services apart from the ones they offer at premium prices. Thanks to a high degree of corruption and bureaucracy, it is near impossible to enter the ISP game unless you have serious monetary or political clout. Simply starting a competing ISP is not really feasible.
- eklavya 12y ago
  Sure it is, Beam telecom (ACT now), You broadband, Spectranet (citycom now, although it is older). If you are implying that serious investment is required to setup the infrastructure, you are correct. This is the nature of the telecom game.
  - cookiecide 12y ago
    Fair enough. I suppose it is more accurate to claim that entering a business with high infrastructural costs is not possible for most people (where will the money come from?) and my guess is that only a small number of people who are in a position to start such a business would actually know and care about net neutrality.
- dreamdu5t 12y ago
  Reliance Communications Ltd must pay those entry costs as well. I don't see why that's relevant to my point at all.
  - cookiecide 12y ago
    Reliance Communications Ltd is an arm of one of the largest companies in India, and one of a very very small number of players who can actually not only afford the entry cost, but actually outspend the competition. I understand that they aren't actively preventing people from competing with them, but it's not much of a stretch to imagine the other big players in Indian telecom following suit, resulting not in fast and slow lanes, but toll free and toll collected lanes. I don't think anyone's saying that Reliance is impinging on the freedom of others to compete with them as an ISP, they're objecting to life being more difficult for internet-based businesses that want to get off the ground without paying a fee to ISPs to get them on the toll free lanes.
simonh 12y ago
You're couching your defence of this in free market terms, but the truth is that for customers of this ISP these web sites no longer exist in a free market for Internet services. They have managed to skew the market in their favour by artificially lowering the overall cost of using their services and artificially raising the cost of connecting to competing services. You can't have your free market cake on one end of the argument and eat it on the other. Either you're in favour of free markets at both ends, or you aren't. Yes there is a market for ISP access and consumers are free to chose another. That's fair. Nobody is arguing this is illegal, it not even necessarily immoral for the people that made the deal. It's just business and companies give away freebies all the time for all sorts of reasons. The problem comes if this becomes standard practice, because at that point you don't have an open market anymore, you have an industry cartel that has stitched up the market to divide it up between themselves. See Adam Smith for why this is bad and why, in order to operate equitably and in the public interest, markets need to be regulated in order to remain free.
- dreamdu5t 12y ago
  > no longer exist in a free market for Internet services How so? Anybody is free to start an ISP that doesn't do this. The existence of this ISP does not prevent anyone from starting their own. There is absolutely a free market in ISPs, and the only thing that would prevent a competing ISP is the government (by denying a license) - not Reliance Communications Ltd > They have managed to skew the market in their favour by artificially lowering the overall cost of using their services and artificially raising the cost of connecting to competing services. There's nothing artificial about it. McDonald's selling a burger for $1 doesn't prevent anyone from selling burgers at that price or a lower price. If McDonald's gives burgers away for free, that does not prevent anyone else from doing the same. > You can't have your free market cake on one end of the argument and eat it on the other. I'm not sure what you mean by free market as you use the term. The fact that its hard to compete against McDonalds (or Reliance Communications) doesn't mean others aren't free to compete. > you have an industry cartel that has stitched up the market to divide it up between themselves. Yet other investors and entrepreneurs are free to eat their lunch... unless gasp consumers actually like what they're being offered more than the alternatives you're personally interested in.

What's wrong with this? They're not preventing you from paying for Internet access, they're offering some access for free. People in India are free to start competing ISPs.

sumitviii 12y ago

ISP's have to buy license from government. But a HN post showed a way to tunnel normal traffic through FB chat[]. :https://news.ycombinator.com/item?id=9203946 https://news.ycombinator.com/item?id=9203946

dreamdu5t 12y ago
Neither Facebook or Reliance Communications Ltd prevent anyone from obtaining those licenses.

nitrogen 12y ago

See https://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29 https://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29 for one example of how giving something away for free can be net worse for the economy/world than charging a fair price for it. Another issue is what is given for free. If free access is given to something that is 80% of what they need, people will have reduced incentive to buy 100%, shrinking the market for the 100% solution, raising its price, and keeping it out of reach of most people. As an analogy, giving people free low quality food could discourage them from high quality food, and the lack of market for good food could drive up its price further.

gojomo 12y ago
If you're swayed by that logic, should perhaps Google be forced to charge users for web search, and Android, and their other "free" offerings that put smaller competitors at a disadvantage?
- captn3m0 12y ago
  The difference here is that of "service" and "utility". Google can offer its services for free. However, it should not be allowed to partner with a utility to make its services free, if that makes sense.
- adventured 12y ago
  You won't get a response to that, for the same reason you won't get a response to: should all Linux vendors be forced to charge prices comparable to Windows, because otherwise they're dumping? And of course OpenOffice should be made illegal under that same logic.
  - pmontra 12y ago
    They also give you the source code. That makes the whole issue so different that I won't use Linux and OO as an analogy for this Indian case.
- simonh 12y ago
  Google being add supported doesn't directly raise the cost of competing services. Conversely Facebook making a deal to make accessing itse service free on a paid network has the direct consequence of making the cost of using competing services go up. The cost of free access to Facebook has to be borne by somebody, if not the ISP then the customer has to pay it when they acess non-subsidised sites. Internet.org is not about giving things away for free, it's about a cartel using their combined market power to negotiate subsidies and fix prices in order to distort the market.
dreamdu5t 12y ago
"net worse" by what measure? How is a "fair" price determined, and by whom?

cookiecide 12y ago

Basic telecommunications infrastructure in India is heavily regulated by a government that once actually proposed banning all VoIP services apart from the ones they offer at premium prices. Thanks to a high degree of corruption and bureaucracy, it is near impossible to enter the ISP game unless you have serious monetary or political clout. Simply starting a competing ISP is not really feasible.

eklavya 12y ago
Sure it is, Beam telecom (ACT now), You broadband, Spectranet (citycom now, although it is older). If you are implying that serious investment is required to setup the infrastructure, you are correct. This is the nature of the telecom game.
- cookiecide 12y ago
  Fair enough. I suppose it is more accurate to claim that entering a business with high infrastructural costs is not possible for most people (where will the money come from?) and my guess is that only a small number of people who are in a position to start such a business would actually know and care about net neutrality.
dreamdu5t 12y ago
Reliance Communications Ltd must pay those entry costs as well. I don't see why that's relevant to my point at all.
- cookiecide 12y ago
  Reliance Communications Ltd is an arm of one of the largest companies in India, and one of a very very small number of players who can actually not only afford the entry cost, but actually outspend the competition. I understand that they aren't actively preventing people from competing with them, but it's not much of a stretch to imagine the other big players in Indian telecom following suit, resulting not in fast and slow lanes, but toll free and toll collected lanes. I don't think anyone's saying that Reliance is impinging on the freedom of others to compete with them as an ISP, they're objecting to life being more difficult for internet-based businesses that want to get off the ground without paying a fee to ISPs to get them on the toll free lanes.

simonh 12y ago

You're couching your defence of this in free market terms, but the truth is that for customers of this ISP these web sites no longer exist in a free market for Internet services. They have managed to skew the market in their favour by artificially lowering the overall cost of using their services and artificially raising the cost of connecting to competing services. You can't have your free market cake on one end of the argument and eat it on the other. Either you're in favour of free markets at both ends, or you aren't. Yes there is a market for ISP access and consumers are free to chose another. That's fair. Nobody is arguing this is illegal, it not even necessarily immoral for the people that made the deal. It's just business and companies give away freebies all the time for all sorts of reasons. The problem comes if this becomes standard practice, because at that point you don't have an open market anymore, you have an industry cartel that has stitched up the market to divide it up between themselves. See Adam Smith for why this is bad and why, in order to operate equitably and in the public interest, markets need to be regulated in order to remain free.

dreamdu5t 12y ago
> no longer exist in a free market for Internet services How so? Anybody is free to start an ISP that doesn't do this. The existence of this ISP does not prevent anyone from starting their own. There is absolutely a free market in ISPs, and the only thing that would prevent a competing ISP is the government (by denying a license) - not Reliance Communications Ltd > They have managed to skew the market in their favour by artificially lowering the overall cost of using their services and artificially raising the cost of connecting to competing services. There's nothing artificial about it. McDonald's selling a burger for $1 doesn't prevent anyone from selling burgers at that price or a lower price. If McDonald's gives burgers away for free, that does not prevent anyone else from doing the same. > You can't have your free market cake on one end of the argument and eat it on the other. I'm not sure what you mean by free market as you use the term. The fact that its hard to compete against McDonalds (or Reliance Communications) doesn't mean others aren't free to compete. > you have an industry cartel that has stitched up the market to divide it up between themselves. Yet other investors and entrepreneurs are free to eat their lunch... unless gasp consumers actually like what they're being offered more than the alternatives you're personally interested in.