Slashdot Mirror
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."
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.
I doubt they will pay, because that would set a bad precendent, and then they'd be beholden to other countries as well.
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.
I know there are a lot of programmers in India and stuff, but do they really thing Yahoo and MSN will care?
Ahem.
India
1 peninsula region (often called a subcontinent) S Asia S of the Himalayas between Bay of Bengal & Arabian Sea occupied by India, Pakistan, & Bangladesh & formerly often considered as also including Burma (but not Ceylon)
2 those parts of India until 1947 under British rule or protection together with Baluchistan & the Andaman & Nicobar islands &, prior to 1937, Burma
3 country comprising major portion of peninsula; a republic within the Commonwealth of Nations; until 1947 a part of the British Empire capital New Delhi area 1,195,063 square miles (3,095,472 square kilometers), population 896,567,000
[M-W.COM]
Enough said.
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?
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.
If religous zealots don't believe in Evolution, then why are they so worried about bird flu?
- 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."
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.
This story is very very shady. Note that there isn't a paper called Hindustani (note the i) Times. There's Hindustan Times and it's online version has no mention of this at all.
There have been various messages flying up and down Indian telco lists such as India-GII that this is blatently untrue. Move along, there's nothing here to see.
All weakness is within you, As is all courage.
See this comment from a list I run, by an office bearer of the ISP Association of India - the organisation which is supposedly behind this scheme.
J ul y/002003.html
http://lists.vipul.net/pipermail/silklist/2002-
Looks like we have misquoting to thank for this "story".
-- God is silent. Now if we can only get Man to shut up.
The food-chain in ISPs looks something like this: Customer -> Tier 3 -> Tier 2 -> Tier 1, with each level paying the layer above for access. Tier 1 ISPs are people like UUNet with global reach. Tier 2 are national or "regional" (e.g. EU, Americas, Asia-Pacific). Tier 3 are local ISPs, and customers are both individual users and hosting companies.
Actually there is nothing stopping a customer or Tier 3 ISP from signing up with a Tier 1 ISP, and many do. But the principle is the same.
There are two kinds of link an ISP can have to other ISPs: Transit and Peering. In a transit link an ISP pays a larger ISP for access to "the Internet". In other words the smaller ISP can route packets through the link to any destination and expect to receive replies via the same route. In a peering relationship two ISPs, usually in the same Tier, agree to exchange traffic, usually without payment, but with the proviso that only traffic for customers of the other ISP is to be routed through that link. You can't send traffic to B through your peering link with A (although there are sometimes mutual backup link terms in the agreement).
You can think of this in your own terms quite easily. You have a transit link with your ISP that you pay for. But if you and your neighbour exchange a lot of traffic you might string an Ethernet cable between your houses and create your own peer link. But it would be very bad manners to use that link to pinch bandwidth off your neighbour.
The market forces that created this system are very straightforward. Originally the Internet worked with free transit links, but then the people investing in global networks realised that all the smaller ISPs were getting a free ride, and so they started demanding payment. This happened around 1996-7, and you can find lots of discussion papers from that time worrying about "the balkanisation of the Internet". In fact nothing of the sort happened. Metcalfe's law saw to it that everyone found more value from being connected to an unbalkanised Internet, and the net effect (sorry) was that money flowed from you and me up to Worldcom, and much good it did them. Meanwhile the smaller ISPs found that peering arrangements helped them to cut their costs because peer traffic avoided the expensive transit routes.
Thats not to say that things are so simple in real life. Peering arrangements in particular are fraught with difficulty because it usually means negotiating with your direct competitors, and you can play all sorts of dirty tricks like "hot potato" routing (routing packets to your nearest exit point instead of the globally most efficient one). But thats the general idea.
Incidentally the economics work like this regardless of the direction of most of the bits. People who tried to analyse the Internet using telephone economics got this wrong, because with the phone its usually the caller who pays. On the Internet the "caller" is hard to identify and the rules for doing so keep changing. And in any case the issue is irrelevant. You have content providers who want to reach readers and readers who want to access content. (Peer to peer changes the numbers and locations, but not the fundamentals). Both pay ISPs to provide this service, and those ISPs then pay the next tier up, and so on.
So now we look at India, where a bunch of Tier 3 and 2 ISPs are demanding payment from Tier 1 ISPs. The Tier 1 ISPs will rightly tell them to get lost.
I suppose that the Indian ISPs (who are mostly consumer ISPs) might demand payment from content providers such as Yahoo, Slashdot and co, on the grounds that the content providers want to reach Indian eyeballs. But I don't see this flying either. Those Indian eyeballs want the content just as much as the providers want to provide it, which is why you get no-payment peering arrangements between content providers and consumers: its the flow of value that counts, not the flow of bits.
Paul.
You are lost in a twisty maze of little standards, all different.
Um, check your facts...for the most part US ISPs do charge extortionate amounts to their foreign counterparts.
. ht ml
n te rnetPolicy/scottspeech.htm (scroll to slide 13 and onwards)
For instance, most Pacific Asian countries (inc Australia) get charged for line lease and data travelling both ways between that country and the US.
This is regardless of who initiated the data transfer, in other words an Australian ISP hosting a page that is viewed by someone in the US is still charged for sending data back to the USA.
I wish you guys knew how good you have it. The cost bias is one of the factors that inflate the cost of Internet connections (and ultimately broadband) high in areas outside the US.
http://www.isoc.org/oti/articles/1000/vanbeelen
http://www.noie.gov.au/projects/international/I
After looking around, it seems like the original TheRegister article disclosed only partial information; the provider list is correct, but the services and the reason for blocking are not (though the effect would be to extort some money and/or partnerships with Indian ISPs).
The actual point in question was the blocking of voice cht services, which by (new) Indian law can only be offered by ISPS, due to the failure of their law makers to distinguish voice chat from IP telephony, when they legislated to permit Indian ISPs to enter the IP telephony market.
The concern appears to be that India requires a license, and requires that you be a Licensed ISP in India, to offer these services.
Here is the original Press information from the ISPAI (Internet Service Provider's Association of India) web site:
http://www.ispai.com/bs05042002.html
-- Terry
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
This story is very very shady. Note that there isn't a paper called Hindustani (note the i) Times. There's Hindustan Times and it's online version has no mention of this at all.
Hindustan Times is one of the larger newspapers in india. It is the largest selling newspaper in the capital city of Delhi. I get this paper, and this news was the main headline on the front page of the newspaper a few days back.
The online versions of most of the Indian newspapers don't carry all the news items.
The solution is simple: Block the ads from those portals.
That's even worse for the portal and the ISP customers are happy.
True warriors use the Klingon Google
Indian online population: 3.3 million.
Total world population online: 580 million.
So... they probably won't care that much. It just makes it a stupid move on the part of the Indian ISPs, who are facing a cash crunch due to shrinking subscriber numbers (see the first article).
Agreed. I want to go back to the good ol' days '90s when internet-based companies didn't care about making money. :)