Why Internet may soon be the domain for big firms

A debate playing out largely in the United States and Europe could change the way consumers access the Internet.

The big question is whether an Internet user in a cybercafé or on a mobile phone should be treated equally with big firms ready to pay more to have priority in sending their information.

The debate, which has been going on for the past ten years, is now gaining momentum as multinationals spend billions laying high-speed Internet connection.

As more and more processes get automated, speed of delivery of data is increasingly becoming the biggest differentiator for companies.

Thus, the pressure to stay ahead of the competition is threatening to auction the broadband megabytes to the highest bidder. 

“We have held this discussion at the International Telecommunication Union (ITU) but the issues are still fluid.

"As a country we have not taken a stand on the issue but we recognize access to the Internet as a human right. It is an important issue that we are following keenly and studying as a country,” Communications Authority of Kenya Director-General Francis Wangusi told Smart Company in a phone interview.

However, at the ITU level, Mr Wangusi said most of the discussions are driven by political interests.

“But we must not let those interests mature into frustrations for consumers. The Internet is borderless and a necessary tool for development,” Mr Wangusi said.

In the US, the debate on net neutrality — the principle that all traffic on the Internet should be treated equally — has pitted Republicans against Democrats.

TIGHTER REGULATIONS

In the past few days after President Barack Obama called for tighter regulations to safeguard the principle of net neutrality, the Republican-controlled Congress and American telecommunication service providers such as Vodafone, AT&T and Verizon, which are championing for an “open Internet”, hit back, saying it is another instance of Obama championing his "socialist" agenda.

The US service providers, who are backed by Republicans, have held that the whole issue is a free-enterprise question that should be guided by the market forces on the basis of willing buyer willing seller.

Their argument is that because Internet connectivity is a service they provide, they should be able to decide how to deliver it and how to charge customers.

But the net neutrality camp, mainly composed of such giant content providers as Google and Facebook, have termed attempts to introduce open Internet as one of the most blatant web injustices in the history of the Internet.

In Europe, the debate is also heated, with service providers like Vodafone and Orange, the parent companies of Safaricom and Telkom Kenya, respectively, calling for constructive dialogue on the issue. They say resolving the issue amicably could encourage innovation and new business models.

Basically, what the service providers in the West are fighting for is the authority to determine who gets faster Internet access as opposed to the current situation in which all web content is, ideally, treated equally. There is no discrimination on the basis of type, destination, origin or any other criteria.

The conclusion of this debate is likely to determine whether, in future, a consumer could be forced to pay a premium for their content to receive top priority from service providers, such as Safaricom, Airtel, or Orange, or cable providers such as Liquid Telecom. It means that your email or tweet could be delivered faster if you can pay a fee.

CATEGORIES

Big corporates would be well-placed to have faster access to their websites and the content they generate thanks to their financial muscles.

Ultimately, the debate could lead to the splitting of Internet into two categories. On one hand, there would be the high-speed network with smooth connectivity for those with deep pockets. On the other hand, there would be the slow connectivity for those who cannot afford the fast lane.

Locally, demand for pay-for-access could be driven by financial institutions as competition on mobile and online banking takes root. Already more than 50 per cent of Kenyans are accessing mobile financial services, forcing banks to deploy mobile banking riding on Internet connectivity.

Companies that require big Internet bandwidth like Netflix, the American movie streaming service, or Google’s YouTube, would most likely be forced to pay more for faster access. Google is opposed to this.

Safaricom corporate affairs director Nzioka Waita said the same debate should start in the country with a focus on future regulation.

“It needs to be happening everywhere, including here, particularly regarding future regulation approach. Regulation needs to move from just being telecoms-centric to neutral, to include all other providers of connectivity,” Mr Waita said.

“What we are saying is infrastructure developers such as Safaricom need to continue investing in the same and so the content providers need to pay for the same.”

PAY FOR SERVICE

Service providers feel that because of their big investments in telecommunication infrastructure used to carry content to the end users, content providers should begin paying for the service. Currently, the cost is largely borne by the consumer.

Safaricom for example is spending Sh5 billion to deploy 4G, the next-generation Internet connectivity. It is also using Sh10 billion in the first phase of laying fibre-optic cable around the country.

To recoup the investment, Safaricom would be happy to let big firms send and receive their data faster than the non-paying customers. The government has spent over Sh12 billion to connect the 47 counties to high-speed Internet.

The Kenya’s National Optic Fibre Broadband Infrastructure (NOFBI) is being funded by the Exim Bank of China on a concessional loan. NOFBI is currently managed by Telkom Kenya.

Mr Michuki Mwangi, the senior development manager for Africa at the Internet Society — a global organisation that lobbies for proper public policies for the Internet — said the country should take interest in the debate but from the perspective of ensuring open access for the end user.

“Net neutrality is covering a lot of issues ranging from the technical perspective, the business perspective as well as the end user rights. For Kenya, we should mainly concern ourselves with ensuring that consumers have access to the Internet and encourage competition to stir innovation,” Mr Mwangi said.

He said the focus of the country on the debate should be different from that of the US because the two countries are at different levels of development with respect to the Internet.