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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."
If there's a demand for these services, the customers will bug their ISPs big time about it. I don't see any reason why the portals should pay up. In fact it could be argued exactly the other way around: If it wasn't for the big portals, all those ISPs woul be out of business because nobody needs an internet line if there's no content.
A consortium of now bankrupt US ISPs, in control of major portions of the transcontinental backbone, decided to charge Indian ISPs a fee for access to major portal sites such as Amazon, Yahoo, etc., in addition to major corporate sites such as Microsoft, Oracle, and Adobe. When asked why such a fee was necessary, a spokesman for the US ISPs said, "In order to accurately account for our costs, we must ask the Indians to contribute their fair share in exchange for the traffic that we peer for them.
No comment so far from the Internet Service Providers Association of India. The major portals so far are ignoring both groups.
</sarcasm> Are the Indian ISPs really this stupid?
If anything, the sites have a better chance of collecting money from the ISPs. After all, if Yahoo/MSN etc. are not available, you are taking away one killer app (web browsing), though the other (email, provided by the ISP) would still be available. So if they are not available, why would I want an Internet connection at all?
Since the parties need each other, it is a matter of bargaining power: right now, it is about even, with a slight tilt towards the portals.
1-2 years back, Wired reported that some portals in Norway (I think) tried to bully some ISPs into a revenue-share. Wonder what came of that?!
So, in other words, what you're saying is, you realize there's a market there, yet you've failed to grasp the way most of these sites & ISP's have worked so far.
People want to see MSN, Yahoo, and eBay. Take that away from them, and they will find alternative methods to connect to the Internet.
Especially in the case of eBay, this will mean near certain death for the current India ISPs. eBay is doing fine as it is, and if my former company's foray into the international market, www.etoys.co.uk, is any lesson of the past, they will not make any effort to go international on their own. If Indian ISPs block it, some smart entreprenuer will offer some sort of alternative connection that doesn't block those sites.
Also, a statement of population has little to nothing to do with a) how many of those people are on the internet and b) how many of them having spending cash to support your advertisers/sellers. Though I have never been to India, I'm going to assume that given the number of Indian workers who have come to America to find good paying jobs and the tales I've heard of poverty in India, there's not a HUGE money market in India right now that any of the three aforementioned sites are going to care at all about.
Still, I'm very impressed that you found the population.
I have no idea why this is a problem. I run a couple of fairly high-trafficed sites which cater to an Indian audience and getting any money out of the folks from India is a PAIN. Most don't have access to internationally accepted credit-cards and a fair amount of traffic is from students who would not be able to afford the dollar transactions.
Why cant the ISP's say just charge those premium subscribers? For Option 1 -- Indian sites only, subscribers pay $1 / month (hypothetical) and for Option 2 -- Access to all sites including international and porno subscribers pay $50 a month.
Would be simpler than building complex legal traffic / royalty arrangement with the major portals.
Oops. When an MP3 player is 2.5 months rent I don't think there a premium crowd of net surfers out there in India.
You're right about the average salary, but you also have to take into account that population figure, currently estimated at a billion people, and bear in mind that the variances are huge.
I spent a few months in India at the start of this year, and one of the (many) things that boggles the mind is the sheer variety of everything, the wild contrasts. In India, there are millions of people who live in the street, who live under blue polythene tarps, who live in mud (well, cowdung, usually) huts and if they're lucky, get to break rocks by the roadside in the ferocious heat to feed themselves and their families. But the 250 million people of the 'middle classes' as they are referred to in India are, in many cases, doing extremely well. As in cellphones, Mercedes cars, designer suits, laptops, satellite TV, and all those other appurtenances of a modern 'western' lifestyle. In Bangalore alone, there are reckoned to be maybe 100,000 rupee millionaires (at about 45 Rs per US dollar). And then there are the industrialists, the Bollywood people, and let's not even start on those who've become staggeringly rich through the back-channel of baksheesh.
So the minority of rich people in India, and the relative handful of very rich people, still represent a huge market, and what a lot of them want is the 'american' lifestyle - McDonalds, Starbucks, Tommy Hilfiger and so forth.
It's all about that figure of a billion people. There's a huge amount of money to be made in India, make no mistake.
Which is why, as a tourist, it's so hard to get your head around the lepers, the polio victims, the people whose parents cut off their feet in childhood to give them a glimmer of hope of a living as a street beggar.
TomV
Ummm.....I'm an Indian, and guess what? I'm not a programmer....yes!!! We do exist (Indian non-Programmers, that is), even though we're a paltry 98.8% or something of the total population....
On the whole I agree with the comments of others that this idea will probably not succeed.
Indian traffic is probably too small to matter now, but the intent of the ISP's is to reduce competition in the future in support of local ebusinesses. Quite frankly, American ecommerce companies have an enormous advantage of being first to market in their respective fields.
India's trade groups are pretty strong at blocking out international competition. In this case, they could block strictly ecommerce sites from consumers, provided that they wasn't enormous demand from consumers already for those sites (there isn't).
Under this scheme, they could allow content sites, but block the big ecommerce sites. The problem is that the line between content and ecommerce sites is being blurred. Amazon, for example, has great commentaries on books and the literary world. And yahoo/microsoft, which provide free services, also features classified advertising. Making such a rule would tend to give an advantage to sites mixing both types of content.
But don't for a moment think that Indian ISP's (or other third world countries) would simply buckle to international pressure. Indian ISP's want to make money and if blocking the site is as easy as entering an address on a routing table, then kudos to them for trying.
Such a measure could work if the government somehow codified these fees should be and ISP's were ordered to comply. Such money could be used to support national infrastructure charges (in the best case scenario) or to line officials' pockets (in the worst case scenario).
But don't fault them for trying. Actually, I kind of wonder why American ISP's didn't get this idea first.
(BY the way, if American ISP's took retaliatory measures by blocking access to Indian sites, that might unblock those sites very quickly).
You have to remember how wierd it is to view the internet in a developing country. Not only is a lot of it in English, but they probably see advertisements for dozens of American/Western companies and very little from their own country.
It's a really easy target to choose.
PS. I write about India and cyberculture on my
Asiafirst weblog.
Robert Nagle, Idiotprogrammer, Houston
First off, if not ALL the isp's go along with this, nothing stops people from switching. And even if they do go for this stupid idea, what's stopping external proxies? Its one thing to simply deny certain domains or ip address ranges, its another thing entirely to scan all text that comes over the wire to detect and block traffic from specific websites, no matter how it made it to the end user.
And who's to say that Ebay and others won't just tell the Indian ISPs to go screw themselves. Ebay doesn't exactly have much in the way of viable competition. If this goes through, they could probably turn around and demand money from the Indian ISPs instead or they'll block access. And when the ISPs own polices cause great dissent among their users, they'll be forced to pay up to return things to the way they once were.
-Restil
Play with my webcams and lights here
A contract in india isn't worth a lot, and until it is they will remain a 3rd world country. If someone makes a deal and it tourns out well (take the dabhol powerplant) the contract is ignored and people are shaken down for cash. The highway robbery in india will keep it down for as long as it goes on.
If anything, they have this whole thing backwards - don't you think it would make more sense if the ISP's were paying for the websites, not the websites paying for access to the ISP's?
It would be like NBC suddenly going "You know what Tom Brokaw, you have ridden on our coattails for long enough. If you want to continue your nightly newscast, you must pay us, or we wont show it."
Granted its a little different because NBC owns that broadcast, and those ISP's dont own those websites, but its sorta similar.