When it comes to OS, consumers have little choice

When it comes to net neutrality, why don’t people talk about operating systems?

Many are talking about net neutrality, and it is high on the EU’s policymaking agenda. The debate about the open internet is important, but the discussion is one-sided. Net neutrality supporters focus exclusively on internet service providers (ISPs) and overlook the many instances of discrimination across the internet value chain – operating systems, web platforms and devices.

It is a fact in most countries today that consumers can choose from many ISPs offering a range of networks including DSL/copper, coax cable, fiber and wireless (GSM/UMTS, LTE, Wimax and Wi- Fi). But when it comes to operating systems, consumers have only three choices: Google Android, Apple iOS, and Microsoft Windows. Put simply, there is tough competition when it comes to internet access, but next to none for the software that powers your entire internet experience.

As a consumer, once you select a device, your choice of operating system is made for you. Devices and operating systems are two distinct products, but they are bundled together. This bundling creates a cascading effect, driving users to predefined websites, services, and applications.

For practical purposes there is no such thing the internet today without an operating system. Bundling the operating system with the device is a way to force products on the consumer and to restrict freedom of independent developers to innovate. Because it has some 72% of the operating systems on new smartphones, Google can exert extraordinary power, undercutting competitors when negotiating with device manufacturers as well as restricting developers’ ability to create apps. For example, no app developer can get access to all of the same APIs that Google has access to. This being the case, Google forecloses the possibility that any developer will ever create an app to rival GMail, Google Maps, or YouTube. The Android device interface also discriminates by putting Google products ahead of competitors or by blocking competing products all together.

The discrimination that Google, Apple and Microsoft practice on their operating systems is even more granular. The in-house app developers have access to tools and information (such as user and profile data) that external app developers will never see. While Google, Apple and Microsoft may tout their “openness” to developers and pay lip service to the app economy, make no mistake: they ensure that their own designers have the upper hand.

Consumers also face discrimination from operating systems. Once a user selects an operating systems, a chain reaction of decisions are made without his consent. This has to do with how and where apps will appear on the device, the ease of changing the app configuration, as well as the choice of the app marketplace itself. The operating system can discriminate at the app marketplace, or store, by dictating the business model for the partners.

If the user want to change phones (and by extension, operating systems), the apps and services on the old phone become worthless. It is difficult if not impossible to take them over to a new platform. For example, if you bought ten games for your iPhone, that investment would be wasted if you switched to an Android phone. However if you stay with an Apple phone, you can take the games with you. Taken together, Google and Apple have 90% of the world’s market for smartphone operating systems.

Imagine your ISP started to act like the operating system on your smartphone. The ISP would insist on pre-approving the the websites and applications you install on your computer and mobile phone. Imagine that a large portion of the applications you downloaded could only be bought from the ISP’s app market and the ISP dictated the terms. Imagine then that you changed ISP and all the applications you had bought and downloaded were worthless, and you had to buy them again.

Net neutrality should look at the entire internet value chain

If net neutrality supporters really cared about discrimination, would look at the entire internet value chain. The behavior of the ISP is of little consequence when compared to the power of the device bundled with an operating system. The three dominant players in the operating system market use discrimination as a business model, locking in customers to their platform, app store and products, and locking out competitors.

It is useless to talk about transparency, blocking and discrimination on the internet if we are only going to apply rules to ISPs, just one actor in the value chain. It’s time for politicians to wake up and see where the real discrimination is happening on the internet.

Strand Consult reviews the issue of discrimination further in its new report “Understanding Net Neutrality and Stakeholders’ Arguments“. This report investigates the arguments from different stakeholders’ perspectives. It examines the internet value chain and shows how different actors—operating systems, devices, and web platforms–discriminate services and traffic. The report raises important issues which need to be taken into consideration for a fair and holistic debate on net neutrality. There are many players fighting against an open internet.

Source: Strand Consult