How 2ab explains net neutrality

So Prime Minister Narendra Modi has set off this little storm on Twitter by talking about the relationship between India and Canada being similar to the “$latex 2ab$ term” in the expansion of $latex (a+b)^2 $.

Essentially, Modi was trying to communicate that the whole of the relationship between India and Canada is greater than the sum of parts, and it can be argued that the lack of a “$latex cos \theta$” term there implies that he thinks India and Canada’s interests are perfectly aligned (assuming a vector sum).

But that is for another day, for this post is about net neutrality. So how does 2ab explain net neutrality? The fundamental principle of the utility of the Internet is Metcalfe’s law which states that the value of a telecommunications network is proportional to the square of the number of entities in the network. In other words, if a network has n entities, the value of these n entities being connected is given by the formula $latex k n^2 $. We can choose the unit in which we express utility such that we can set $latex k = 1$, which means that the value of the network is $latex n^2$.

Now, the problem with not having net neutrality is that it can divide the internet into a set of “walled gardens”. If your internet service provider charges you differentially to access different sites, then you are likely to use more of the sites that are cheaper and less of the more expensive sites. Now, if different internet service providers will charge different websites and apps differently, then it is reasonable assume that the sites that customers of different internet services access are going to be different?

Let us take this to an extreme, and to the hypothetical case where there are two internet service providers, and they are not compatible with each other, in that the network that you can access through one of these providers is completely disjoint from the network that you can access through the other provider (this is a thought experiment and an extreme hypothetical case). Effectively, we can think of them as being two “separate internets” (since they don’t “talk to” each other at all).

Now, let us assume that there are $latex a$ users on the first internet, and $latex b$ users on the second (this is bad nomenclature according to mathematical convention, where a and b are not used for integer variables, but there is a specific purpose here, as we can see). What is the total value of the internet(s)?

Based on the formula described earlier in the post, given that these two internets are independent, the total value is $latex a^2 + b^2$. Now, if we were to tear down the walls, and combine the two internets into one, what will be the total value? Now that we have one network of $latex (a+b)$ users, the value of the network is $latex (a+b)^2$ or $latex a^2 + 2 ab + b^2$ . So what is the additional benefit that we can get by imposing net neutrality, which means that we will have one internet? $latex 2 ab$, of course!

In other words, while allowing internet service providers to charge users based on specific services might lead to additional private benefits to both the providers (higher fees) and users (higher quality of service), it results in turning the internet into some kind of a walled garden, where the aggregate value of the internet itself is diminished, as explained above. Hence, while differential pricing (based on service) might be locally optimal (at the level of the individual user or internet service provider), it is suboptimal at the aggregate level, and has significant negative externalities.

#thatswhy we need net neutrality.

Understanding the by-election results

Kindly note that this post falls under the category of “political gossip” and not under the category of “policy analysis” that this blog is mostly filled with

So the BJP has got trounced in the by elections that were counted yesterday. People have been quick to call this a referendum on Modi’s government and are asking him to change course (each commentator is calling for a change of course in a different direction – possibly with the vector sum of them being nothing). I got an email this morning asking for reasons of the BJP’s poor performance and this is what I wrote back:

So in that one vote that you have, you need to collectively express a range of emotions – like which party you want to form the government, who you want the prime minister to be, who will take best care of your community in your constituency, who is the best person to represent your constituency in the assembly, which local person you can  turn to in times of trouble, etc. (it’s a very long list). So your vote is essentially a weighted average of your emotions in all these aspects.
In the elections in May, thanks to the non-existence of a government for a very long time, the weights given to a stable and strong government at the centre and choice of prime minister shot up. Like crazy. And it was clear before the elections that there was only one party and one man who could offer this kind of a government.
Since the weight given to this factor in the minds of people was so high, it trumped everything else, and even the proverbial lamppost on a BJP ticket (especially in Uttar Pradesh) managed to get elected! And thus we got a party with full majority. And we got the desired man as PM. And we will most likely have a stable  government for the next five years.
A bypoll is different – especially when you have a small number of by polls they simply don’t affect who forms the government and who the prime minister should be. Thus, the weight given to those elements of the vector, which were extremely high in May,were set to zero. Thanks to that, people voted based on the other components – like caste, local dominance, community support and all that. In that respect I’m not surprised at all in terms of the result.
Also it’s not fair to compare the performance in these bye-elections to the party performance in the respective assembly segments in the lok sabha elections. What we should compare these bypolls to is to the parties that held these seats before they fell vacant. The media has once again succeeded in distorting the narrative to come to hopefully desired conclusions?