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Tuesday, 29 September 2015

The Non-Neutral Internet for the Poor: Jana vs.

 I was replying to a friend on Facebook about the similarities and differences between the different free data propositions that have been rolled out in developing markets. It started off as a short summary and as with these topics,  ended up becoming a maxi blog post in itself.

Of late there have been a slew of organizations that have come together to bridge the  digital divide- ie. how to narrow the gap between the digital haves and the have-nots.  While mobile penetration may be reaching record levels in many developing markets, cost of data is a barrier for many people to effectively use the Internet. India's internet penetration is at 19%  compared to China which is at about 50%

Two organisations that are at the forefront of addressing  this  issue of data accessibility, are, promoted by Facebook and the new kid on the block, Jana. I'm not going to talk about Google's project Loon, as the commercials or details around that is still in flux.

Jana and are aim to deliver exactly the same thing: cheap Internet to poor people.Its their business models that differ.

Similarities :
1. Both subsidize the cost of Internet data to end users
2. Both need existing mobile networks to deliver their services to end users. ( as of now)
3. Both have partnerships with existing operators to deliver their services to end users
4. You can take up their service as long as you have a SIM from a partner operator and a cheap android smart-phone.
5. There is no slowing down of Internet by using either service.  The speed of this service is what you get from your mobile operator using a regular data plan.
6. You're not tied down to either service.  You can always turn off the service and pay for a non-sponsored Internet service from your mobile operator.

The differences
  1. Jana: Contrary to its reputation Jana is neither a charity nor not-for-profit. It is very much a profit seeking  company, whose business model centers around sponsored data.  They pay the mobile operator in the countries in which it operates, for the data used by Jana's users. It recovers those costs  and makes a profit,  by serving sponsored content such as apps and videos to those users.  Jana users can redeem free data by downloading or viewing these sponsored content, which may be apps or ads. Once online, users can access any internet site within their data allowance. If they exceed their data allowance, they can make use of another offer from Jana to redeem more data  or purchase data directly from Jana. There is nothing new in this model. There are in fact a number of mobile operators who offer this model to their customers. Jana seems to have made some efficiency  innovations around their backend operations, which allows them to deliverer these sponsored services more cheaply to their users. Jana also makes a tidy profit selling anonymised data about its usage to companies that may be interested in trends like app usage, location data etc ( Psst.. All telecom companies do  that as do Facebook and Google)  
  2. Jana Business Model 
  3. Internet. ORG :  Propped up by Facebook, their business model is unclear. I'm not sure who pays who for this. FB has agreements with mobile operators to provide basic Internet services for free to the users of that operator.  FB claim thst they don't pay the operator for this, nor do the partner sites pay FB, for including their sites in this service. See here for what sites are included in india: You always have the option of using services outside of the Internet. ORG walled garden,  but of course you purchase your data directly from the operator,such as Reliance. If users wanted just basic facebook access, news sites like bbc  etc, this will do the job.  As for usage data, Facebook has built a billion dollar business around that, so it shouldn't be surprising that all that usage data, anonymised or not, would be used by Facebook for analytics.
Alleged business model of

So which one is better.  Well it really  depends on who you are and what are your reasons for accessing the internet.
Deprived, Below Poverty Line users of RelianceMobile 

The target market for both these services are people in the most deprived areas, where a choice has to be made between the cost of food or the cost of mobile data. As long as they have access to a basic smartphone, both these services would be great as an entry point into the Internet.  I would say is simpler for the novice user.  They could probably graduate to Jana as their Internet requirements increase or switch to a data bundle from their operator if their financial situation improves. For some people, is all they will need . The vast majority will want more out of the internet. For these consumers, Net Neutrality would be the last thing on their mind. 
Cat pictures ?

Net Neutrality :

Net Neutrality is the big elephant in the room, for both these services. If you go by the Net Neutrality definition that broadband providers be detached from the information sent over their networks, then yes,  these services are net neutrality compliant,  as they don't throttle the services they offer and the operator treats their traffic on par with other data services.  Where this starts getting controversial is around the criteria for which services get included in the free plan.

Jana provides some content for free like apps and videos in exchange for which they give you a data allowance.  You could argue that this goes against net neutrality, as it is unfair on other companies whose services don't get promoted.  FB gives you Facebook and a host of other sites for free in their package,  which may be unfair on other sites providing similar services. Is Facebook promoting its own social media services over others like Twitter and Google+ ? Absolutely! Facebook and Mark Zuckerberg come under a lot of criticism for exactly this.
....and the universal declaration of human rights! 

Traditional net neutrality states that operators shall not provide any priority or throttling of any Internet services. and jana operate in a grey area.  They are not the operators -  they are content providers with a social objective: to get people on the Internet. They don't solve all the problems around making the internet more accessible to people at the bottom of the pyramid. They only  solve a few of the challenges- namely cost of data.

They also solve one of the biggest issues around net neutrality -  one of of operator conflict of interest in selling open internet access vs selling priority access to their own content. InternetOrg and Jana detach the operator from the data that is passed over their networks. It results in a win-win situation where consumers get access to cheaper internet and operators are able to monetize  their networks more effectively. 

Of course, when Facebook and Google get their drones and balloons off the ground and start offering data services, then they will be treated as an operator and will be subject to the same regulations as the traditional land based mobile operators.The net neutrality equations will be subject to a different debate then. At this stage, those services are atleast 3-4 years away from commercial service availability.
Non-Net-Neutral Flying Object

Regardless of all the activism and chest beating around net-neutrality,  I don't believe governments of developing countries will clamp down on these services or the operators who offer them. It is in the governments interest to get people online. This is part of the agenda for Digital India as well.  When the Net Neutrality law does get passed, I'm fairly certain that they will only restrict ISPs from blocking, throttling or prioritizing services. Governments would rather  delegate the responsibility of subsidising internet,  to a 3rd party organisation that has cracked that business model.

Net neutrality advocates in India and abroad are a bunch of idealistic folks. They have little understanding of the economics of running an Internet services provider.  There are physical limits to how much data can be delivered and at what speed and to how many users. Networks in most of the developing world are reeling under the strain of growing usage, with frequent issues around congestion and call drops. In the real world it is not digital divides and corporate social responsibility that drives roll-out of mobile networks, reduction of data charges and upgrade of services- They are determined by business cases, ROIs and ARPUs.  Till someone comes up with a better net-neutral  solution to delivering cheaper Internet to the under privileged , I'm all for services like Jana and Simple economics will eventually determine what users will want to consume and what services they want to pay for.

Opinions expressed are solely my own and do not express the views or opinions of my employer.

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