Net Neutrality – good or bad for etailers?

As a result of severe backlash and the viral campaign ‘Save the Internet’, Flipkart has finally decided not to seal the deal with Airtel’s controversial service, Airtel Zero.

Lowdown on the Controversy

If you are active on social media or read/watch/hear news, there is no way you haven’t heard about ‘Net Neutrality’ and the whole issue of Flipkart and Airtel entering into a deal, which threatened to violate net neutrality. As soon as Airtel announced ‘Airtel Zero’ service that claimed to give free access on selected apps to its customers, a strong debate over violation of zero-rating net neutrality services emerged from all quarters.

What’s net neutrality?

In simple words, net neutrality means letting Internet be an equal field for everyone like it has always been. It states that Internet service providers (ISPs) must treat all traffic on their networks equally. No website should be given superior treatment and that users should be given access to all websites at the same speed & cost are the main objectives of this concept. Violation of this principle will result in small players/startups dying gradually as big companies will muscle their way up. Internet Service Providers Association of India President Rajesh Chharia said, “There should be no discrimination on internet otherwise companies will start focusing on few websites that can destroy whole eco-system.”

For better understanding, you can watch this video.

Impact on Flipkart

Soon after Sachin Bansal tweeted in support of Airtel Zero, many users left negative ratings and reviews under Flipkart’s App tab in support of net neutrality. Many uninstalled their apps too.

Quickly switching sides, Flipkart has now taken a U-turn and said, “We will be walking away from the discussions with Airtel for Airtel Zero. We had not signed up for a deal. We were in the midst of discussions, and … have pulled out of that. We, at Flipkart, have always strongly believed in the concept of Net neutrality. For, we exist because of the Internet.”

Is it good or bad for etailers?

Bad, if you look at the bigger picture. People with a tunnel vision are in support of services like Airtel Zero because what they see is an immediate benefit of ‘no data charges’ and access to consumers in case of etailers. But what they fail to see is the long-term effect. It is bound to kill innovation, small players and new entrants.

And seriously, can we really believe that in the times of stiff competition between telecom service providers and also between ecommerce sites, an innocent toll free data service to customers with or without data pack will be available, now or ever, without any strings attached? Are we that gullible to believe that after witnessing ‘Billions’ of misleading ‘Sales’ and getting not even 2G speed in the name of 3G/4G, a ‘beneficial for all’ service can exist? Think.