India's ISPs Want Payola from Big Portals

knorthern knight writes "Story on The Register. America's biggest content providers could face a toll to enter India cyberspace, if plans mooted by the Indian ISP trade association bear fruit. Although the Internet Service Providers Association of India is split on the issue, several of the larger ISPs want to block access to eBay, MSN or Yahoo! unless the prociders pay a toll. 'In order to increase revenue streams we should ask [the portals] to pay if they want traffic on their sites from India,' reports the Hindustani Times."

Comments

Won't work

[csnydermvpsoft]

I don't see how this would work. If the sites didn't cough up the dough, and were blocked, then a single ISP would gain a huge advantage by not blocking the sites, and advertising as such. I know I'd switch to that ISP.

Re:Won't work

[Graymalkin]

You're kidding right? Do you think an portal site paying out dough to ISPs is not going to pass on the cost to its customers? Did you just get here on the slow boat or something?

If a portal like Yahoo had to pay money to reach their users they would just stop any and all free services. How the fuck are they supposed to be profitable with little to no revenues from advertisements, operational overhead, plus tariffs they'd have to pay to ISPs. Where in the positive cashflow in that situation? I'll give you a hint, there is none. ISPs aren't going to charge end users any less. The data capacity of the fiber in the US has risen emensely in the past seven years but the price of internet access has remained relatively fixed.

This is a stupid idea. Portals providing free services to users are not going to fork over money in order to access the ISP's users. If anything they will in return charge ISPs for their services going out to their network and the net change in cash will be 0. All charging tolls does is piss off users. Like the other poster said, people would switch to the one ISP that didn't block access. Likely portals would only allow access from the ISP that wasn't acting like an assclown anyways. If the one ISP charged too much thse customers would go to the next ISP that allowed access to anything and had low rates. You'll notice this pan has no steam behind it because there isn't universal support for the idea. Without a giant cartel of ISPs the plan has no way of working. In a service oriented business the cartel would last as long as it would take for a single upstart to allow free cheap access to everything.

Re:Won't work

[po8]

My impression is that the ISP association would seek legislation to enforce the "tax" on every ISP, whether a member or not. This is certainly how such things are done in the US (Internet radio tax, blank CDR tax, etc.). Presumably the bad-guy ISPs would be both good at and motivated to assist the Indian government with enforcement.

Re:Won't work

[karmawarrior]

But that ISP will have to charge more, because it will have higher international bandwidth charges to pay. So in practice, Indian users would be back to square zero, use an affordable ISP, or pay more for "free" access to Yahoo, etc.

As an aside, I think the ISPs have a point. There's no reason why overseas ISPs, especially those in countries with lower incomes per capita, should shoulder the entire cost of connecting to US commercial entities. US ISPs don't have those levels of costs imposed on them, and Yahoo, eBay, etc, exist in order to make money from the people who connect to them. It's reasonable to suggest that they should help pay the costs. Any other outcome is essentially overseas ISPs subsidizing US businesses.

Re:Won't work

[WNight]

The internet is all about the content and the people at the other ends. Your ISP is *just* a wire.

I use email, but I get it through the same company I have hosting my domain because my home provider (rogers cable -> rogers@home -> shaw@home -> shaw cable) has made me change my email account five or six times. If someone else came along and offered the same service they did at a buck less a month, I'd switch. They're just a commodity.

Even google, as much as I like their service, doesn't actually offer any content themselves (except perhaps the usenet archives) and if they went away the net as a whole would carry on. People would just go back to bookmarking.

Yahoo and sites that offer content and/or host private content, are a big part of the net for me. If my ISP blocked them I'd cancel my service the same day. But, if an ISP started playing games with Yahoo, I'd stick with Yahoo (if, theoretically I had a Yahoo email address) even if they blackholed that provider.

So, if Yahoo and India fight, India loses. Nobody has patience for companies that try to blackmail others.

And really, the peopel of India need the net more than the net needs them. As such, their ISPs will give this up fairly quickly when their customers start bitching about wanting access to everyone that blocks them.

Doubtful

[jhunsake]

I doubt they will pay, because that would set a bad precendent, and then they'd be beholden to other countries as well.

Re:Funny and sad....

[big.ears]

Not only that, but since these portals are probably losing money for every non-western world click-through because their advertisers only want to advertise in North America or Europe, the sites would probably gladly allow their url to be blocked in India.

This would be the final dagger...

[MrByte420]

On one side this makes sense from their perspective. International bandwidth from what I understand costs a bundle to provide and usually most of this cost is not picked up by the US which is generating most of the content to begin with. Europe I hear has similar problems with paying an arm and a leg for transatlanic traffic, etc. On the other hand this sets dangerous precedent. How can we expect the internet as we know it to stay free with this kind of scheme. The cost for these portals traffic is already built into the wholesale general cost of traffic that ISP's sell each other and eventually to the end user. It seems as if they just want to double dip on this access. Secondly how are content providers who already pay big $$$ for their pipes just to get their material out of their server farms start going to then start paying carrier fees as well. What we are going to end up with is the internet becoming like basic cable. You pay for a few channels here or there but if you want the premium channels you gotta start shelling out. This method of billing breaks the IP protocol as we know it. The net is supposed to be mostly blind to the traffic that it is throwing around. If routers stop universally moving traffic this is going to get ugly very quicky. Good bye univeral routing. hello pay tv internet.

Solution

[quintessent]

if the "Internet Service Providers Association of India" is going to do this as a group, then let the "Internet Content Providers Association of America" declare that if any of their members are blocked, then the others will also block themselves.

India will then choose to have the big sites on the Internet or not.

Who pays the bill?

[lennart78]

It's quite clear. Someone has to pay the bills. Routers don't buy themselves, infrastructure doesn't just materialize.
How many telecom/datacom companies have we seen go bankrupt in recent time? I've lost count.

In Holland, an ISP tried to gain revenue by giving out stock. Huge mistake. Stock devaluated rapidly, company bought by the Italians, not heard much of 'em since.
A number of companies use 'creative accounting' to make things look better, but we've seen what that leads to.

Maybe it has something to do with scaling, and in a couple of years 4 out of 5 ISPs will have been weeded out, to leave a few strong, healthy ISPs. But right now, it doesn't seem like an ISP can live of the revenues of user accounts.
Since no customer is very willing to pay twice/thrice the price he's paying allready, revenues must come from another direction.

So either the government must put up a program to help their people onto the net (but since India is not that rich, that's not likely), or the revenues must come from the other side of the line, the content providers.

But then again, how many content providers are able to cough up a bag of dollars/euros for every ISP in the world? Putting an extra strain on them will probably increase the amount of banners, popups and spam on the web.

I think it's a bad idea.

Re:Lets not forget...

[guttentag]

Some points to note:

• India has 2.2 telephone lines per 100 citizens
• 0.4% of the population uses the Internet, not 10%
• high poverty levels are limiting Web access to the few that can afford it
• "Shopping is still considered a family duty in India, so online shopping may not be as popular as it is in the West"

U.S. tech firms are flocking to India for developers because they will work for about what a Silicon Valley developer pays in rent (this I've heard in-person from developers who were flown to the U.S. for several weeks of training before being sent back -- a lot of them are brilliant, but they have to take what the market in India offers because they can't stay in the U.S.). If that's any indication of the economic state of India, I doubt eBay is that desperate to reach the Indian market.

Yahoo isn't going to pay some smart-ass ISP for the priviledge of allowing Yahoo to distribute its already free content.

And MSN will laugh at them: "You want us to pay how much? OK, but we're invoking the terms of our EULA that allows us to remotely control your systems."

Re:I can see quite a few companies paying

[hype7]

MS, Yahoo, etc will probably just pay whatever they ask (within reason) so that they'll be available to those billion people (even if only a fraction are online.) They'll pay mostly because they're afraid one of their competitors will, and they'll lose all that potential business. The only real way they'd have of standing up to this would be to unite and act as one... but I really doubt that'll happen.

There's a real problem with what you're suggesting - if the big guys pony up with the cashola, it sets a precedent for international ISPs: you act as a cartel, you can extort money out of big portals to allow your users access.

Suddenly, yahoo et al can't get access to China (I'm not that they could already, but at least the Chinese Govt isn't doing it as a revenue raising exercise) and there go the two biggest developing markets in the world unless you pay every ISP.

Add in a few more countries without anti-competitive behaviour laws, and there goes the internet.

I hope they don't cave in. Those sites are barely making it as they are.

-- james

Uh oh

[Rogerborg]

A billion people. Significant natural resources. A booming and dynamic IT economy. A net exporter of goods and services. Nuclear capability. And, as we see, an attitude.

When you read commentators speculating that India might be the next superpower, don't just scoff and assume that the status quo will preserve itself. This is just one of many signs that India is ready to try throwing its weight around on the world stage.

It might get slapped down this time, but the sheer audacity of it is an eye opener. Up to now, only the USA has been able to impose unilateral conditions on world trade. It'll be interesting - but probably not very comfortable - to see what happens when India starts playing the same game in earnest.

Different Idea - Everyone Charge THEM

[fire-eyes]

Let's turn the tables on them. Lets charge them to access anything outside of India.

Assholes.