In Business Model, Internet Access, Mobile

India now is the fulcrum of debate over “network neutrality” principles, as regulators ponder possible rules that extend from “no blocking of lawful apps” to “no packet priorities” and “no zero rating of apps.”

As a practical matter, the path chosen by Indian regulators will shape methods of rapidly supplying Internet access to non-users, and also will shape the direction of app and service innovation., the organization founded by Facebook that promotes app access by mobile users without buying a data plan, believes the India rules are highly important, as believes some form of app subsidies are required to rapidly increase use of the Internet by mobile users in many developing markets.

Any rules that bar the offering of apps on a curated and “zero rated” basis (no mobile data charges incurred) would imperil the whole project, which aims to acquaint non-users with the value of the Internet.

While defending and zero rating, it appears Facebook might also be looking at backup plans that would be much more costly, such as Facebook paying for as much as 33 percent of the cost of a user’s data charges.

Whether even that approach would be allowed is the question.

Vodafone, India’s second-biggest mobile operator, says it is waiting before making any decisions on zero rating until the telecom regulator Telecom Regulatory Authority of India  and the Department of Telecom resolve the matter as part of their review of net neutrality rules overall.

Unintended consequences (outcomes that are not the ones foreseen and intended by a purposeful action) are important. Such unforeseen implications are why it is so hard to create public or private policies that actually work only as intended.

Benefits, drawbacks and even perverse unintended consequences can happen. Drawbacks are unintended new problems caused by solutions to other problems.

A perverse effect is worse, producing an outcome contrary to what was originally intended.

Ironically, one unintended consequence of strong net neutrality rules that prohibit packet acceleration or zero rating is that Internet adoption could be slowed and innovation thwarted.

The Progressive Policy Institute argues that bans on quality of service mechanisms–including paid priority deals–undermines innovation for real-time applications like telemedicine and high definition voice.

Potential low-income users also suffer when subsidies such as zero rating are outlawed.

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