Apr 11, 2015

Why Internet Should Not be Neutral ?

The chorus of 'open' , 'neutral' and 'free'  tend to capture the imagination of social media quite quickly. Back during my school and college days, there was this enormous campaign for 'free software' , without realizing what was 'free' in that context. Likewise , over the last month, the Net-Neutrality campaign has caught up the attention everyone . Much of this is misunderstood  & misinterpreted by the media.

The basic underlying question in this whole debate is - 'Can an internet service provider prioritize / de-prioritize certain content over the rest' ?  It is not easy to answer that unless you understand the underlying realities & implications.

There is this concept called price discrimination in Economics. It is all about pricing different consumers differently for the same service. In airline world, there are a number of different fare classes for the same sector. So, it is quite likely that the passenger sitting next to you has paid a totally different fare.  It is the dream of every business owner to do this in a perfect way - or achieve perfect price discrimination .  There is a different 'marginal utility' for any service from a customer's perspective. So, the price that he / she is willing to pay for a service could vary a lot.  So, if a producer can price the product correctly to each and every customer, he is maximizing his benefit or 'producer surplus'

Producer surplus is not just about maximizing producer's profit. It is an important component of a free-market mechanism. Adam Smith's 'invisible hand or self-directing market & unintended societal benefits cannot be achieved unless producers have a chance to maximize their surplus. Putting it in another way, unless producers are rewarded for their produce to the right level, they don't have any incentive to do more.

In a telecom/internet world, this is functioning more like a two-sided platform. There are two important players - end consumers & content/app/web providers.  ISP's like Airtel , Vodafone etc being the platform between them .

The argument put forward by proponents of net-neutrality is that if I have paid an amount for say 1GB of data, I get to decide which app / site I'm using - ISP's don't have any business to prioritize any of those.

Lets view the situation in a different way. Assume that there are only 3 applications - Facebook, Youtube, Ted  - that consume 100% of bandwidth . And lets assume that in a city, the overall customer base's bandwidth usage results in a bandwidth consumption of Youtube - 90%, Facebook - 9% and Ted - 1 %

Now, lets pick three consumers & their ideal or desired bandwidth usage profiles being
C1  ( FB - 90% , YT - 9 %  Ted - 1% )
C2  ( FB -10% , YT - 60% , Ted 30% )
C3  ( Ted - 90% , FB - 8 % , YT - 2 % )

For C3, the net-neutral world is a nightmare.  Owing to the   overall bandwidth usage distribution, his favorite content never gets delivered properly.  So, by paying an identical fare for the data plan, isn't he cross-subsidizing the population who are just hogging up the bandwidth by consuming FB & YTube?  Neither are C1 & C2 getting the ideal data consumption plans.

Can we imagine a system where C1, C2 & C3 are able to draw up a data plan based on their own bandwidth usage patterns ?  Essentially, we are talking about the so called 'anti-neutral world' here

From an ISP's perspective, this is all about creating certain priority lines and making each consumer & app provider or maker pay for the bandwidth usage as per their desired needs.  In a 'Net-Neutral' world, neither consumer , nor producer surplus is achieved - thereby making it an inefficient market infrastructure.

There is an underlying catch / danger here -  Can a company - say facebook -owing to their dominant market power buy the entire bandwidth capacity with Airtel and restrict the entire population to facebook only ?  I'd say, in  a monopolistic world, it would have been possible. But not in an ultra-competitive industry like telecom.

Would this lead to a world where, if you are a new App-maker, you would find it difficult to reach the consumers -  Maybe for a high bandwidth consuming application. But I'd say again that if your App is good, there would always be a segment of demand & that demand will find its way through the market

It is far better to live in an anti-neutral internet than in the present scheme of things where 90% of the available bandwidth is consumed by pirated movie downloads & streaming services without them paying their proportional bit for the bandwidth usage

For another interesting take, read Tim Harford's article on this http://timharford.com/2015/03/battle-for-the-webs-last-mile/

Mar 17, 2015

Travelogue - Cairo

Hardly did the aircraft touchdown, people started standing up and pulling down luggage from the overhead lockers, started ringing up their friends & relatives. ..Wow - I'm finally travelling in a sector just like my hometown Calicut where this happens on a regular basis.

Welcome to Africa !!! . Finally I set my foot on the erstwhile dark continent & the  'untapped economic potential' of 21st century.

The one hour taxi drive from Airport to Novotel hotel in central Cairo was so convincing that I don't think I'll ever dare to drive a car here . Driving here needs a different set of skills altogether. You zig-zag, you maneuver, yet you maintain the speed .

The chaos in Cairo just reminded me of Mumbai. A city with an ever increasing influx of people, Everyone struggling to make ends meet .  The drive next morning to Giza was just like driving through a Mumbai suburb.

The imposing pyramids took our breath away. The important thing about Egypt & Cairo is that unless you are without a guide , you'll not enjoy the trip.  Even in places like Moscow, where you can't read or communicate much in their language, you can manage without a guide if you are a bit tech-savvy ( trip-advisor, maps, language apps, etc ) .

But here in Cairo

* You need someone who shows you the monuments by telling the right mix of history
* You need someone to negotiate the rates , get tickets , gets you out of the chaos
* You feel safe with the guide overall

Fortunately we picked an extremely helpful agency ( http://www.viator.com/ ) .

The guide took us through the story of pyramids - I have to say that it was a heavy & interesting dose of Egyptology . What Pyramids made me realize is that the boundaries of human endurance are far far higher. In an age without machines, if they had to build it, with the most minutest of the details taken care of, it would have been an incredible effort.

But the best experience in Pyramids was not the sight in itself, it was the sound and light show at night. The history of Pyramids narrated by Antony Hopkins & Omar Sherief was really an awesome experience. A snippet from that embedded here.

If you are in Cairo, this is the experience that you should not miss at any cost.

Next to the pyramids, you have the Sphinx, the largest monolithic statue in world. Near the Sphinx you can see the ruins of a funerary chamber where the mummification used to take place

Visited a perfume factory & papyrus factory nearby the Pyramids. Again these are the places which you will miss unless you go with a guide.

The next major stop was the famous 'Egyptian Museum' in central Cairo. It is said that if you spend one minute seeing each of these artifacts, it'll take nine months to see this museum fully.  King TutanKhamun's artefacts, countless mummies, Rosetta stone ,.. This was a lifetime experience for someone like me who likes history a lot. And, fortunately the guide - Ahmed, knew enough & was passionate about Egyptology. Unfortunately, no photographs permitted here.

To be frank, Cairo is not a place where you would find comfortable roaming around on your own. Street vendors swarm upon you accosting you to visit their shops . Heavy military presence is there in the city throughout - that makes you feel secure, but yet uncomfortable. But the experience of pyramids & museum makes up for it.

It is a sad part that a place that is so rich in history has lost out on tourism front over the last few years because of political troubles.  Since the inflow of tourists have dwindled , it has made the local traders a bit desparate for business. That manifests unfortunately into this over-accosting of visitors.

I wish good times return to this place soon so that my generation don't miss on this wonderful piece of history on our planet.

( Read about Alexandria experience here )

Feb 14, 2015

Travelogue - Alexandria

“You can get a car of any make done here. Half of the city drives a BMW”  - remarked our guide Ahmed, as he wriggled us through the narrow lanes outside Alexandria railway station. It was an exaggeration.. However, for those who wonder where the second-hand / third-hand vehicles of the developed world end-up, the answer is Africa.  An average car-workshop guy here should be much more skilled than a car-mechanic in the West. Here to succeed he needs to mix and match. Body of a Benz, engine of a Chevy, I guess you can find any combination here.

We reached Alexandria after a three-hour train ride from Cairo. Though I did harbor expectations of capturing at-least fleeting images of the Nile Delta, those were quashed quickly. The feeling that you get while the train approaches ‘Misr’ station is exactly the same as that of train approaches to Mumbai or Delhi. Cramped & incomplete houses, people struggling to make ends meet, it is as good as any metro city in developing world in those aspects.

Alexandria - Corniche
Alexandria was ancient world’s gateway to Africa. It does not have the importance that it held in those days. But you can see remnants of the bygone era. Greco-Roman buildings, monuments, Italian influence, Turkish & Mediterranean style cuisine. This would be one of the most cosmopolitan cities in Africa. We even came across a movie theatre which was playing Shah Rukh Khan’s “Happy New Year”

As you navigate through the old city, you could see posters of Hosni Mubarak, Morsi & Sisi in various quarters showing how politically charged-up the atmosphere is.
Pompei’s Pillar & Roman Catacombs –  Most tourist guides would cover these two for you.  The historical significance apart, these might not appeal much to an average visitor.

Citadel at the place of 'Light House of Alexandria'

The sight of the Corniche blew away our tiredness.  Yesteryear’s wonder – “The lighthouse of Alexandria” is no longer there. Only a castle stands at its place. That’s from where you can get the best view of the Corniche skirting the Meditteranean.   This is where the legendary Mark Antony & Cleopatra lived once upon a time - a time when Alexandria was perhaps the center of the world.

I was surprised to hear that lot of Indians frequent to this city – And the reason behind that – 100 odd Kilometers to west of Alexandria lies this place – El Alamein, one of the prominent battle grounds of World war II . Thousands of soldiers of various nationalities lay buried there. Their relatives visit those sites even now.  Alexandria has a massive library – Bibliotheca Alexandria – One of the largest libraries in modern world.  We didn’t have enough time to cover that.

Alexandria left an impression of an old wise man in me. Someone who refuses to be taken lightly, yet who is not quite powerful to fight its way into prominence, but quite content with the age-old wisdom & intellect.