In the interests of full disclosure, I’m not good with numbers. I neither have a degree in economics, nor do I have a working knowledge of how the stock market operates. Hell, I’m barely capable of basic arithmetic without a calculator.
In other words, I’m not a financial expert. I feel it necessary to get that out the way right from the beginning in the interests of fairness since I’m about to post my thoughts on the Free Market Foundation’s presentation earlier this week on the #DataMustFall movement, which I went along to.
To precis the precedings, the FMF is against the #DataMustFall campaign because it is not market driven. It’s a free market think-tank, so its position is that phone networks invest in building networks then charge for their use, and the free market will decide a fair price somewhere between what the cost of recouping that investment is and what customers are willing to pay.
Fair enough, but the counter argument put forward by #DataMustFall activists is that South African data costs are high, the phone networks make massive amounts of profit and lowering the cost of data – forcibly if the networks won’t do it themselves – will have social and economic benefits for those most needy.
The FMF was very upfront about its bias at this week’s presentation. FMF director Louis Louw laid his organisation’s position out right at the start, asserting that the FMF stood for little-to-no regulation and freedom of the markets. If the cost of data is to fall by any other means than through largess on the part of data providers, it would have to happen because of government regulation and/or a constriction of the freedom of the market to dictate cost, so the FMF is against the idea.
The background to #DataMustFall
#DataMustFall became ‘a thing’ after it was spearheaded by Tbo Touch and Gareth Cliff, whose radio shows turned a plea for reasonable data pricing into a trending hashtag. From there things snowballed as social networks and the mainstream media picked up the call, and suddenly Touch and Cliff had enough juice to take their case to parliament. Since it was in the news cycle and an easy way to garner attention, the DA and the EFF also got behind it. Outrage and memes became the order of the day: one example of the latter put forward the notion that 1GB of data cost just R5 India, R32 in Namibia and R22 in Nigeria, while in South Africa the same amount cost R150.
That stat, incidentally, is bullshit and provided Louw with one of his best arguments – that there’s a lot of misinformation about the issue. But it’s not complete bullshit – South African data is empirically expensive when compared to international rates, and several networks charge in the range of R150/GB. The #DataMustFall campaign is cherry picking its numbers and looking for the most expensive deals on one side and the cheapest on the other. Touch and Cliff, it seems, aren’t the best informed media activists in the world, but that shouldn’t surprise anyone.
Louw also takes issue with the way #DataMustFall conducted their campaign. Touch was quoted as saying that firstly, the networks had 30 days to lower their costs for data or secondly, Touch, Cliff and anyone rallying behind them would take their business elsewhere to a more reasonable provider – one that cared about its clientele. As Louw pointed out, firstly, it’s unlikely Touch has the clout to issue that sort of ultimatum and second, if a data provider like the one Cliff and Touch are describing exists, why not just sign up to it immediately? Why the song and dance about data costs when there’s a provider that meets their needs?
One question at the heart of #DataMustFall is how important is data to society’s poorest? There are lots of stats about internet access and GDP, which prompted founder of the world wide web Sir Tim Berners-Lee to suggest data is a human right, along with other utilities like clean water. Louw questions this notion, quoting TCP/IP co-inventor Vint Cerf. Cerf’s view differs;he said that the internet is not a human right, rather an enabler.
Meaty grist to chew on, certainly, as is the fact that the FMF is calling for a proper investigation into the underlying conditions that quantify the price of 1GB of data. I have to say I agree with their stance of saying ‘hang on a second’ as a consensus forms on social media driven through outrage and hyperbole – especially when a lot of the ‘facts’ presented are demonstrably untrue.
But there is one incontrovertible fact, and that’s the less you can afford, the more expensive data is. Buying an uncapped package is throwaway money for those comfortably off these days, but if you’re buying data in R5 chunks and it expires every evening, it’s bankrupting.
The FMF doesn’t seem to have a problem with this and here’s where we part ways in our thinking: Louw argues that there are more vital needs the poor require – housing and food, for instance – and if the cost of data should fall to help the least well-off, why shouldn’t the cost of these other assets be lowered too? This is a strawman argument at best, since there are plenty of campaigns and government initiatives already dedicated to lowering the cost of housing and food. RDP housing and free school meals, just to name two off the top of my head. We encourage governments to run these programs for the poor either because we believe in social empathy or – perhaps more pragmatically for FMF-type thinkers – because economic development depends on them, and the more equal a society is by measures like housing, food and mobile phone contracts, the more stable and successful it is.
It’s trickle up, not trickle down economics.
Let them eat cake
Louw pointed out that while data providers do make massive profits, they also invest heavily in the country’s digital infrastructure. If the cost of data goes down, there is less money for more development. However, it’s worth pointing out that while the FMF could provide infrastructure investment figures for the big providers, it couldn’t say where that development had taken place. Given the high cost of mobile devices, are the data providers likely to invest in regions with little to no connectivity? Or are they more likely to improve the infrastructure in areas that benefit their most loyal customers – you know, those richer consumers with phone contracts who are more likely to upgrade their devices on an almost annual basis?
Finally, as Louw quite rightly pointed out, in a free market economy there’s no such thing as a free lunch. Lower the cost of data for the poor, and that cost will likely be passed along to other consumers. Well as one of those more well-off consumers, I personally don’t have a problem with my data costs and phone bill rising if it means that internet access can be opened up to more people who otherwise wouldn’t be able to afford it.
The FMF and Louw make some very valid points: don’t believe everything you read on social media, fact check stats before you like and share them, don’t jump on a bandwagon before you know all the facts and crucially, always question what the individuals who are spearheading a movement may be getting out of it. But at the same time, I would put forward a couple of other ideas: education is a silver bullet in advancement and data provides access to it, the wealthy in SA owe a debt to the downtrodden and perhaps it’s time they started paying that off and when you have privilege coming out of your ears, perhaps you should use it for something other than feathering your own nest.
Like I said, I’m not a financial expert, but one of the central dictates of free market economics is that the needs of the many should outweigh the few. If things are to improve for everyone, in the short term, some have to suffer – and that usually means the poor. In a country where the poor can be counted in their millions, that not only seems unfair, but – given South Africa’s history – downright criminal.
Walk that argument into the court of public opinion, and I’m not sure it would go down very well.