Consider a post man who transfers posts from one person (provider) to another (consumer). Whether the postage is paid by provider or consumer is immaterial and perfectly legal as long as
a) both are not charged
b) for the same distance and weight of the parcel different pair of provider-consumer are not charged differently.
Similarly Airtel is ethical, morally and legally correct as long as it gets paid by either the provider (Flipkart) or the consumer (end user). However airtel will be at wrong side if it charges both flipkart and the enduser, or charges amazon differently when compared to flipkart.
Without net neutrality flipkart pays to airtel either for all customer visits, or waives off charges if the customer makes a purchase. In these cases customer is in profit, Airtel is neither in profit or loss because whoever pays it gets paid the same. Flipkart sees this as an investment to increase customer base. This is similar to postage paid by the addressee which you can see in normal postal deliveries.
With net neutrality companies are not allowed to be tied up with telcos (by TRAI regulation) and hence customer has to pay for all visited sites. Customer visits merchant site less often.Merchant site looses customerbase, telco also is at loss, customer is also at loss as he missed out on business. Overall GDP also reduced as there was less business.
Conclusion 1: With intervention everybody is at loss.
Some argue that it would be tough for new players to compete with established companies if telcos get tied up with them. The only answer is free market is tough. We have to be best to win over others. If you want to win by grants or by supressing business opportunities of others then please dont blame reservations and license raj too.
Also the popular analogy of electricity companies is false because, electricity company is a monopoly. If it favours one business, there is no counter mechanism to overcome it. Thankfully telcos are private and the competitions among telcos nullifies the fear of business suppression.
Some other examples for you to compare:
I see this similar to HDFC Bank waiving of transaction fee for fuel purchased through credit card. Eventhough you dont realise HDFC Bank is paying for data transaction of each swipe,not the customer. If the argument for net neutrality is equitable it should apply here also. Why should banks be spared just because they dont use browser but an embedded device.
I also see it similar to companies waiving of parking fee of visited customers, or real estate companies paying or volunteering for transport costs of site visit.
The point I like to make is transaction fee, transport charges, bandwidth consumption of a customer are not of a concern when there are better benefits to companies. Let them pay for it. Why should customers pay for a visit to flipkart even if they dont purchase. Why is it unethical if flipkart offers to pay for visits to its sites by customers?
All these are allowed in free market.
Some more examples for you to consider:
I would like to give some more non internet counter examples that are allowed by law and influence customer behaviour. Why only internet market has to suffer regulations that prevent tie-ups?
* Mc Donalds,offers a combo pack with Coca Cola, we canot request to change it with some other drink, they refuse and tell it is not in Combo Offer.
*Kotak Mahindra offers PVR tickets as a bonus for their Credit Card, would you say they are influencing your movie visiting pattern?
*Fiat Car company voids the warranty if you change your Car Audio, Dont you think they are affecting your free choice?
*Reliance is plannin to tieup with Samsung for its 4G Voice+Data plan. verizon ties up with Apple. Are they not affecting other players?
*Government of India tells to businesses that if you open your company in SEZ you dont have to pay certain tax. Are’nt they against similar businesses in other areas?
Another agument that most people ignore:
In India no revolution happens without a vested business interest. Lets see who gets huge profits with the new “Net Neutrality” filter. Check this link:
Can Reliance’s Jio Chat topple WhatsApp?
Some excerpts from here:
“It also offers 100 free SMS a month (sent on data) ”
How can this be allowed? Is it not against net neutrality.
“The additional features of Jio Chat include a channels section, where it has tied up with a few companies-including HTC, Star TV, Paytm, food ordering app Tiny Owl, Reliance Digital, Reliance Fresh Direct and IPL cricket franchise Mumbai Indians for entertainment and e-commerce content.”
Reliance Jio has tie ups with businesses like Tiny Owl and in house Reliance Digital, Fresh Direct etc. By Reliance favouring Jio Chat instead of Whatsapp, are they not affecting other businesses like flipkart, big-basket dot com ? Just because Jio Chat is inhouse of reliance why do you spare them? To fight against Reliance what is wrong if flipkart ties up with airtel?
Another advantage if we do not have net neutrality:
The competition among telcos gives free access to wikipedia, facebook, whatsapp which is so beneficial to millions of poor customers in India through net penetration, otherwise everybody has to pay.
Conclusion 2:Allow free market a chance, free market follows demand and is always beneficial to end users.