ISPs in glass houses toss stones at VoIP

by Andy Oram

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Wired article
reports that ISPs in India are annoyed because customers use instant messaging to place long-distance voice calls instead of paying the ISPs a charge for such calls. So annoyed that the ISPs are calling it illegal. (Luckily, there are no feasible measures for enforcing a ban at this point.)

Ingratitude runs rampant through this complaint.
Four years ago, ISPs in India were debating whether they even had the right to offer service. It took a court ruling to turn back a claim from the monopoly telecom provider that Internet service was illegal unless it chose to offer such service. And it was only April 1 of this year that the courts made it legal for ISPs to offer Voice over IP!

Do these beneficiaries of competion and innovation appreciate it? Not when it turns against their business plans. They were happily undercutting the telecom monopoly while making a profit by charging 10 cents per minute for phone calls anywhere in the world.

For people to go one step further and make the calls over IM is hardly a technological advance; it's just using a different ISP and business model. Tolerance for innovation goes as far as this month's business plan; I think it's time for Indian ISPs to stop carping and change business plans. They're turning against innovation to preserve profits, like any entrenched interest.

On one point I do have sympathy for the ISPs. They are relatively small companies trying to be viable local businesss. I respect that and recognize that India needs strong local economies producing revenues that get spent at home. The economy will not benefit as much from the success of MSN and Yahoo! offering voice over IM. And the global positions of MSN and Yahoo! allow them to undercut the local ISPs.

But protectionism is risky business. I complain when multinational firms treat people injustly, but I don't complain when they offer a good service more cheaply. What ISPs (and other businesses in India) have to do is learn how to leverage and build on the cheap foundation being offered.

What would benefit the Internet providers and users in India?