Appu and the Bus Operators

A parable on bus neutrality

This post was written in response to arguments raised by Indian ISPs against net neutrality, and their demand that the regulator let them fragment the internet, extort app developers and damage consumer rights. Join the fight for the internet.


A tea stall
This is not Appu

There was nothing remarkable about the Netapur bus stop — a spot on the side of a dusty, broken road, an hour outside the city. There were no houses or shops nearby. Over the fields within walking distance lay four villages. Six buses stopped there in the morning and evening, carrying villagers who had jobs in the city.

It was on one such morning that passengers first saw Appu. A teenager from one of the nearby villages, he was carrying a metal tray with a few small glasses of tea. “Five rupees”, he would tell anyone who glanced his way. He sold eleven glasses of tea on the first morning, and took the empty glasses and tray back to Sanjay.

Three weeks earlier, Appu had dropped out of school to look for a job. “It’s up to you now,” his grandmother had told him, “to take care of your little sister.” Sanjay, who had a tea stall in the village, had known Appu’s father and offered him a job. Appu was grateful he did not have to work in the fields.

He rose early every day to bring milk and water, served customers and washed glasses. Selling tea at the bus stop was his idea, and Sanjay had agreed to try it out. Appu made sure it was served hot, and the tea was soon popular with passengers.

Six months later, Appu borrowed some money and old pots and pans to start his own tea stall at the bus stop. Shortly after that, he started selling idlis in the morning and samosas in the evening — his sister helped make them when she wasn’t at school. Appu’s tea and snacks were the best in the area and soon people from other places began coming to Netapur to have them.

Appu’s tea stall was two years old now, and that was when his trouble with the bus drivers began. One day the driver of Mukesh Travels, who drove the second bus of the morning, beckoned Appu over.

“The bus gets too crowded with people coming to your tea stall. You have to begin paying us for bringing you these customers,” he said.

Appu was astonished. “But aren’t they already paying you a fare for coming here? Aren’t you making more money if your buses are more crowded?”

“Our passengers used to pay the full fare till the city; the people stopping at Netapur pay less.1 Also, our owner has a restaurant three stops away, and you are taking away his customers.”

The passengers had all got in by then, and it was time to begin moving. “Remember: if you don’t pay us, our bus will not stop at Netapur anymore. The owner is only asking for one-tenth of your revenue, I would pay up rather than fighting this.”, said the driver before setting off.

Appu didn’t worry much initially. There were too many passengers from Netapur and Mukesh Travels could not afford to ignore them. However, a couple of days later, drivers from the other five buses also stopped to demand that Appu pay them. Appu was indignant at this open extortion and refused to pay.

The next morning, the first bus, Bharti Transport, sped past Netapur without stopping. Soon afterwards the Mukesh Travels bus did the same.

At the bus stop, the crowd got larger and restless. When the next bus appeared on the horizon, people started waving at it, but to no avail. Passengers tried yelling and waving at the next three buses to stop but they, too, sped by.

Just behind the last bus of the morning, a car pulled up and a well dressed man stepped out.

“My name is Rajan and I represent the bus owners.”, he told the crowd, “We cannot stop here because people coming to Netapur to have tea are overwhelming our buses2. We can stop here again only if the tea stall pays us one-fifth of its revenue to compensate us for this. I’m sure you all will agree that this is fair.”

An old man interrupted, “Your business is only to drop us where we want to go, not to ask whether we are going to work or to have tea. When you run your route on a government license, we have the right to get on or off at any stop on the route!”

Rajan continued, as if there was no interruption, “This tea stall business runs “over the top3” of our bus service, and it would not exist at all if it weren’t for his free riding on us4. In fact you could say that we deserve as much credit for providing you tea and snacks as he does — how would you come here if we did not bring you here? Yet you only pay us a small fare while you pay him much more for his idlis!5 Is this fair?”

A young woman said, “Bus and food are different things, and we are paying for each its correct market price. In our house we buy grain at one shop and get it milled at another. We pay the grocer the market price for grain, and we pay the miller the market price for milling. We must buy the grain before we can mill it, just as we must take the bus before we can have Appu’s idlis — but this does not give the grocer a right to the miller’s money, nor you a right to Appu’s!”

But Rajan wasn’t done yet. “But we are giving this Appu a service! We are bringing him customers.6 We are only asking that he pay us for our service.”

The old man replied, “Your service is carrying passengers. It’s already paid for by us, the passengers. We are your customers, not Appu. Nice try, but no bidi.”

The other passengers looked oddly at the old man for this strange expression. He was quite old, so they assumed it must be an ancient, forgotten saying.

Rajan frowned. Things weren’t going too well, so he tried another tack. “Buses are getting more crowded every day. How will we pay for new buses7 to reduce the crowding? We have to use our profits to buy more buses. Mr. Mukesh even invests his restaurant profits into buses. So it is in the people’s interest8, not ours, that we make more profits.”

A boy piped in, “If he invests so much, why has the windscreen been broken for the last three years? Your fancy car shows where the money is actually going.” Everyone laughed while Rajan clenched his fists.

Rajan could not contain his frustration any longer. He had a simple job, direct the people’s anger onto Appu and get him to pay. “We are only asking for a level playing field!9 The government has so many rules for buses and for our big restaurants. We are required to ensure good service, cleanliness, safety… all this costs a lot of money. There are no such rules for road-side tea stalls. How can we compete with Appu10 when everything is stacked so heavily in his favour?”

The young woman spoke up again, “Yet, your buses are slow and break down often. Your restaurant serves stale idlis that taste bad, no chutney and costs twice as much11 as Appu’s. Your drivers, conductors and waiters are all rude. On the other hand Appu has never given us reason to complain.”

Appu, who was silent all along, said, “Let them make rules about cleanliness, I’m sure I will satisfy them all. What I don’t have is money to pay you, or time to run around government offices getting permissions and certificates.”

Rajan was now shouting. “Do you know how much we have to pay the government to run our buses? During the last auction of bus routes, they cost too much!12 Now we don’t have money to run buses properly.”

One of the other passengers, a middle-aged man, replied. “When you bid at the auction, didn’t you know that you would have to recover the cost from bus fares? Why did you bid higher than you can afford? Also, this is a matter between you and the government. How are we or Appu responsible for any of this?”

Beads of sweat began to appear on Rajan’s brow. “Perhaps we bid too high, but it has been done. We cannot look back, only forward.”

The middle aged man replied, “If the government agrees that they took too much money from you, they can find a way to give some back. I heard that they have a universal bus service fund, to help you run more buses to rural areas? Why don’t they put some auction money in that and use that to help you buy more buses?”

Rajan was shaking now. These villagers were far better informed than he had bargained for, and he was out of ideas. “Government… While we are solidly behind the government’s ambitious vision of seats for all13,” he stammered, “We are eager to make this happen, but it cannot be achieved by starving the industry of the resources needed to invest in this objective.”

The old man spoke again. “Now that all your hollow arguments have been exposed, you are just saying gibberish and hoping it makes sense. If only the operators spent half as much on improving their services as on lobbyists like you! Go back and tell your bosses that if they can’t serve according their government licenses, they should get ready to lose them!”

As his car started to whisk him away, Rajan rolled down the window for one last try. “Appu sells idlis to terrorists!”14, he yelled.

The villagers jeered the car as it pulled away.


 Notes

While this parable is fiction, telecom operators in the real world are making very similar demands. Their arguments are very similar to, and just as absurd as, those of the bus operators above.

These notes correlate the demands and arguments made by the fictitious bus operators to those made on record by Indian telecom operators. Most of them are from their lobbyist COAI or the TRAI consultation paper (CP) that they helped draft. There are exact citations below, so you can go verify for yourself.

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TRAI CP: http://www.trai.gov.in/WriteReaddata/ConsultationPaper/Document/OTT-CP-27032015.pdf

COAI press releases: http://www.coai.com/press-release/news-desk — Warning: registration required to view press releases (!)

1 On average, TSPs earn ₹0.25p per MB for data, ₹0.85p per MB for voice and ₹1,125 per MB for SMS. (TRAI CP 2.37, 2.38) Judging by numerous ads for data plans, TSPs still make a comfortable profit on data. That means voice is priced high, and SMS prices are simply insane. Note also that data revenue is growing 100% year-on-year (TRAI CP 2.36), enabling TSPs to make more money today than ever before.

2 TRAI CP 1.2: “Telecommunication Service Providers (TSPs) [are] being overwhelmed by online content.” Note TRAI’s biased tone.

3 TRAI CP 1.2: “the term over-the-top (OTT) refers to applications and services which … ride on operators’ networks”

4 TRAI CP 6.9: “the business models of the OTT industry rely on free riding over the network of the TSPs.” The use of the term free ride here and in several other places exposes the TRAI’s bias on this issue.

5 TRAI CP 1.4: “TSPs realise revenues solely from the increased data usage [and] do not realise any other revenues;” Also, CP 5.33: “[OTTs] have a high valuation for customers, consequently, the terminating TSP can demand an extra fee”

6 TRAI CP 1.4: “OTT providers make use of the TSPs’ infrastructure to reach their customers” In reality, consumers use the infrastructure to reach OTT providers, and they pay for this. Nice, TRAI, but no cigar.

7 The Economist, Jan 31, 2015, quoted by TRAI CP p93: “The operators on the other hand argue that the increasing internet traffic can sustained by investments in upgradation of networks which will be possible by increase in profits.”

8 TRAI CP 2.43: Disruption to the existing business of TSPs … would jeopardize the national objective of affordable and ubiquitous telephone and broadband access across the country.

9 TRAI CP 3.4: “The TSPs fall under a regulatory regime whilst OTT players are simply bypassing such a regime”

10 TRAI CP 3.8: “This regulatory imbalance or arbitrage opportunity allows them to offer services or goods that are cheaper or free”

11 TRAI CP compares WhatsApp with SMS, Skype with phone

12 COAI press release: “[COAI] expressed disappointment over the exorbitant winning price points for the operators at the latest spectrum auctions which concluded today.” I’m sorry, who were the bidders again?

13 COAI press release: “…while the industry is solidly behind the government’s ambitious vision of Broadband for All, Smart cities, rural penetration, E-governance, etc., and is eager to make this happen; it cannot be achieved by starving the industry of the needed resources to invest in these objectives.” Yes, they really did say “rural penetration.”

14 TRAI CP 3.22: “during a terrorist attack, it becomes extremely complex to intercept such calls [and therefore VoIP should be banned]”

 
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