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India effect of Verizon-AOL deal

columns Updated: May 17, 2015 23:48 IST
N Madhvan

Just when India is warming up in a heated debate on net neutrality, here comes some interesting news. Last week, US telecom operator Verizon Communications announced it will acquire AOL (America Online) for $4.4 billion (or about Rs 28,000 crore).

AOL is an internet service provider (ISP) that has relied heavily on content to be competitive. Despite a failed merger more than a decade ago with Time-Warner (which publishes Time magazine and owns Warner Brothers studios), AOL is an audacious content player, and now owns Huffington Post and other web assets.

Right now, Verizon’s purchase is said to be influenced by AOL’s technologies for advertising, while AOL can get from Verizon access to a wealth of data on consumers to personalise and target marketing messages. There is also talk that the content sites may be hived off after the acquisition.

But the other side is the access to content. Can a content provider get undue advantage over other content providers because it is owned by a telecom company?

In the US, content providers and application developers have pleaded with the Federal Communications Commissions to implement strong net neutrality rules as they fear Internet access providers may give preferential treatment to their own services or sites. The FCC has put in place strict rules against ISPs giving preference to some sites over others but this is being challenged by telecom operators.

Net neutrality is all about separating content from carriage/conduit without any bias towards any content. Any rule or regime in India needs to bear in mind that mergers/acquisitions and also partnerships should cover not just issues related to size or spectrum, but also content. Convergence as a game is a complex one. They keep saying “Content is King” but if “Carriage is Emperor” the playing field for content may be less than level.