net neutrality and what initiatives like internet.org and airtel zero mean for the digital divide

38 | GlobeAsia May 2015

Technology

assumption is these initiatives could bridge what’s come to be known as the digital divide. The digital divide is the vast chasm that exists worldwide between people in the developed world (that have high internet penetration rates) and those in developing countries where internet access is not only spotty but expensive where available. Programs like Airtel Zero have been around at least since 2014 when Facebook

W hat seemed like a noble initiative to connect millions of the world’s poor to basic internet services in the

developing world had gone largely unnoticed till suddenly Facebook’s Internet.org initiative found itself mired in controversy. The main objection to Internet.org was its perceived violation of the principles of Net Neutrality.

At its most basic level Net Neutrality is the concept that the internet should be a level playing field and that all data on the internet be treated equally. It’s a simple enough idea but one that is at odds with big entrenched internet players who would like nothing more than to massively increase user base by dropping down the cost of accessing their product to zero.

The problems in India started rather innocuously for Facebook who had partnered with carrier Reliance Telecom for their Internet.org platform in India. The company’s service was largely well received for a couple months until the Indian government put out a call for comment on the Net Neutrality and coincidently around the same time, national telecom provider Airtel began rolling out a plan that would give its users free access to certain sites that had previously partnered with the provider (including Facebook). Airtel boasted that within three days of launch 150 companies had already inquired about joining the initiative. The criticism took some time to coalesce but once it began, things snowballed out of control for Airtel. At least 750,000 people (including this author) wrote in to the Telecom Regulatory Authority of India demanding Net Neutrality. Companies (including India’s largest online retailer Flipkart) began pulling out of the initiative and tweeting their commitment to Net Neutrality. The backlash spread to Internet.org as well and companies immediately began a mass exodus away from the platform and a PR offensive distancing themselves from it.

The Digital dividePrograms like Internet.org and Airtel Zero have generally been lauded worldwide because the

Net Neutrality and what initiatives like Internet.org and Airtel Zero mean for the digital divide

May 2015 GlobeAsia | 39

Net Neutrality therefore seeks to ensure that data is not segregated into slow and fast lanes where a provider could charge customers different rates depending on what kind of data they were transmitting. It’s an international issue and a report out from the Electronic Freedom Foundation lists multiple violations of Net Neutrality including Spotify agreements in various countries that seek to provide users with flat rate service, VoIP calls blocked in the Caribbean and a failed proposal for a tiered Internet in Mexico. A previous proposal by Airtel in India to charge different rates for access to VoIP services was scrapped only due to massive local opposition. In fact, perhaps nowhere is this debate more important than it is in the developing world and places where the digital divide is greatest. Indeed this is just the target audience for Facebook’s Internet.org and why this initiative could be so dangerous.

Because of the extreme poverty in the developing world, a Zero Rate plan would spell virtual doom for any company that had the task of going up against a competitor who’s users didn’t have to pay data fees to access their service. In an extremely price conscious market like the India for example, there would just be no way for smaller players to compete once their bigger counterparts managed to partner with Internet.org or Airtel Zero.

One of the biggest concerns surrounding these programs is the tendency for people on the other side of the digital divide to think that Internet.org *actually is* the entire Internet. New Internet users see the walled garden of Internet.org and Airtel Zero and believe that that’s the entire forest. This isn’t an idle concern. A researcher with policy think tank LIRNeasia, Helani Galpaya learned first-hand how this happens in practice. In polling the poorest telephone users in Indonesia, most denied using the Internet while simultaneously stating they used Facebook. Similarly Christoph Stork, a researcher with Research ICT Africa had much the same experience while conducting a similar poll as far away as Africa. Respondents there too stated that while they did not use the Internet, they were frequent users of Facebook. As the head of LIRNEAsia Rohan Samarajiva speaking about the respondents put it, “In their minds, the Internet did not exist; only Facebook.” This sort of thing should not be regarded as an accident.

launched Internet.org in Zambia with the help of partner Airtel. Indeed the overall goal, can be considered a noble one but its implementation (without proper regulation) would ensure that big players with deep pockets are able to eliminate the cost of access for its poorest potential customers and thus prevent new players (without the finances for such a deal) from gaining a foothold in the industry.

Jason FernandesTech commentator and the founder of SmartKlock.

Zuckerberg launched Internet.org in 2013 and Facebook has largely worked behind-the-scenes with Samsung, Qualcomm, Ericsson and other corporate partners


Technology

this would still accomplish the same goals and be at least a slightly more fair system overall.

Internet Coupons – A possible solution?Perhaps the best option is that governments of developing countries issue “Internet coupons” to the poor in much the same way the United States and other countries issue food stamps. This should not be a radical idea. The concept behind food stamps is that since food is essential, it should not be denied to the very poor. If internet access were deemed “essential”, that would setup a framework for countries to better ration bandwidth and ensure an end to the digital divide. This might seem ambitious to cynics who could point to our inability to even feed the world’s poorest people but logistically it could be easier to give the poor internet access than food.

Communication too, is a basic human need. Man is a social animal, connecting with people is in our very nature. It’s clear that mankind as a civilization would be better off people around the world could be better connected. Should this happen, the potential for scientific collaboration, remote education and general human advancement is limitless. Once people are better connected, that could lead to better education, better opportunity and hopefully fewer economically impoverished people to worry about. Technology pioneer Douglas Englebart has said that “the digital revolution is far more significant than the invention of writing or even printing.” It’s high time we lower or even eliminate the minimum cost of admission.

Services like Airtel Zero and Internet.org (even down to its name) are designed to give the impression that they connect users either to the Internet itself or some sort of Internet Lite, when in fact it is nothing of the sort. The initiative does not so much as give free internet access to people as it gives them access to a handpicked menu of services in many cases from those who have paid for the privilege. This spells certain doom for home grown companies in the developing world who have to compete with big overseas players while convincing their customers not only to use their service but to pay to access it when those users could instead access the competitors offerings for free.

These sorts of plans are not without their potential benefitsIn a guest post by Gary Swart on Forbes.com, the CEO of Odesk (a remote collaboration work platform) expanded on the ability of Internet.org to increase worker wages in developing countries. Swart’s numbers point to a possible $27 billion the world stands to gain just in the next 7 years, should Internet.org be expanded worldwide. Swart says that the the vast majority of this money is headed for developing countries. This theory doesn’t take into account of course, the negative economic effect these outsourced workers would have on the domestic workforce.

The problem is not the concept, its executionThe fact is that the world and particularly the developing world has a lot to gain by providing its citizens with some sort of basic internet access for free not least of which are better wages, but who will be the gatekeepers? People are particularly troubled with the idea of letting big corporations decide which websites are free and which ones aren’t. The one thing that would trouble me more is imagining this role instead filled by government. Logging into a government portal to use Facebook seems more than a little creepy. Perhaps the easiest to implement solution is that government provide basic (perhaps speed limited) internet to the entire populace. This would be an imperfect solution because higher bandwidth websites would only be accessible to the rich. For the poor this could feel a little like being perpetually just short of the “you must be this tall to ride” sign at the amusement park. As long as the speed limitation is uniform however, RE

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Columnists

18 Steve Hanke Greece: Down and probably out

22 Guillaume de Gantes and Vinayak HVIndonesia: Ripe for digital disruption

34 Jamil Maidan FloresThe Sunni vs. Shiite conflict and the muddled Middle East

38 Jason Fernandes Net Neutrality in the digital divide

106 Scott YoungerDistribution and use of water

110 Keith Loveard Let’s not give up hope

contentsIWC 75th ANNIVERSARY88 Back to the futureSwiss watch-maker IWC Schaffhausen celebrated the 75th anniversary of the Portugieser in style at the Singapore Victoria Theater and Concert hall recently.

Indiana university asia - pacific alumni meeting92 Building bridges Indiana University has a long history of reaching out to the world.

94 Indiana University: A Brief IntroductionWith more than 110,000 students and 8,700 faculty members on eight campuses, Indiana University is also one of the largest institutions of higher education in the United States.

EVENT112 60th Asian-African Conference highlightsLeaders of Asian and African nations converged on Jakarta and Bandung last month to attend the 60th Asian-African Conference commemoration.

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SPECIAL REPORT62 Building trust in the cloud The development of cloud computing comes at the same time that the threat from cybercrime is rising.

66 Goodbye Premium, hello Pertalite Pertamina says it is ready to start selling a new 90-octane fuel it will call Pertalite.

World Economic Forum68 Connecting with the world Digitalization and regaining public trust will be the key challenges for Indonesia as it seeks to fulfill the aspirations of its 250 million people.

72 Counting on the MACsIndonesia can’t win investment with cheap labor any more. Vietnam and the Philippines are far cheaper, according to executives at Boston Consulting Group.

76 Wiring the world German software maker SAP says hyper-connectivity will be key to the success of the AEC.

Baselworld special80 Interpreting the smart in

watchesGlobeAsia bears witness to how luxury watches are responding to the threat

of the disruption that is the smart watch.

Living the Good Life118 The ultimate speakeasyTheme restaurants and bars are a dime a dozen. Prohibition, which recently opened in Jakarta’s Senayan Arcadia, is one that creates real character.

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A t the recent World Economic Forum East Asia meeting in Jakarta, Indonesian President

Joko Widodo made a passionate plea for investments. The president told the 700 delegates gathered from across the world that Indonesia had to reinvent its economy and its society.

The old ways of doing things no longer apply. In today’s challenging global environment, change is inevitable. “Today we must change from consumption back to production, from consumption to investment in our infrastructure, investment in our industry, but most importantly, investment in our human capital, the most precious resource of the 21st century,” he stated.

Without doubt these changes will create pain within society. Those who cannot adapt to the change will be marginalized. Both individuals and businesses will have to be plugged into the global grid if they are to reap the benefits of the new digital revolution.

President Widodo himself will have to display courage and leadership if he is to move the nation along the path he envisages. He will have to convince vested interest groups to give up their privileges but, most importantly, he will have to convince the Indonesian people that they will have to work hard and sacrifice short-term gain for longer-term benefits.

Editor’s NoteEditorialEditor in ChiefShoeb Kagda

Managing Editor Yanto Soegiarto

Deputy Editors Muhamad Al Azhari

Editor at LargeJohn Riady

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Contributing EditorsFarid HariantoSteve HankeScott Younger

ContributorsSuryo Bambang SulistoWijayanto SamirinFrans WinartaJason FernandesJohn Denton

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Walking the talk

To a large extent, Indonesia has relied too much on its rich natural resources and a large but cheap labor pool to drive gross domestic product growth. If the country is to instead rely on its human capital, as the president noted, it will have to overhaul its societal and economic structure.

This will entail investing heavily in education, skills training for workers, infrastructure and allowing foreign talent to feel at home in Indonesia. Sadly, that is not the case at the moment. The government sets aside 20% of the national budget for education each year but the overall quality of education remains poor.

Recent government policies to clamp down on foreign work visas have sent just the opposite message. Indonesia has always been an open tolerant society but, noted Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, the rising tide of economic nationalism is hurting the country as well as its economy.

As the saying goes, the president must walk the talk if he is to truly reinvent Indonesia. If the country aspires to be a production base and home of innovation, it must first alter its mindset.

Shoeb KagdaEditor in Chief

[email protected]

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