TRAI puts full stop to ‘discriminatory pricing’, Facebook’s ambitious plans

India’s telecom regulator has barred Internet service providers from offering customers preferential tariffs to access certain content over concerns that it will violate principles of Net neutrality, and in the process, dealt a severe blow to Facebook’s free data service plan – Free Basics.

 

India’s telecom regulator has barred Internet service providers from offering customers preferential tariffs to access certain content over concerns that it will violate principles of Net neutrality, and in the process, dealt a severe blow to Facebook’s free data service plan – Free Basics.

Internet service providers, including telecom operators, are prohibited from offering discriminatory tariffs for data services based on content, the Telecom Regulatory Authority of India recently said, after months of deliberation. Service providers that violate these rules will be fined Rs 50,000 per day to a maximum of Rs 50 lakh, the telecom regulator declared.

However, Trai said it may review the rules after two years.

The decision ends a long battle between Facebook and India’s telecom operators, including Bharti Airtel on one side, and Net neutrality activists on the other. Facebook had launched an intense lobbying effort comprising full-page advertisements in newspapers, and an Internet campaign to assure people its Free Basics plan would benefit millions of poor.

Facebook’s Free Basics plan, launched in around three dozen developing countries, offers pared-down web services on mobile phones, along with access to the social network and its messaging services, free of cost.

In a statement, a Facebook spokesperson said: “Our goal with Free Basics is to bring more people online with an open, non-exclusive and free platform. While disappointed with the outcome, we will continue our efforts to eliminate barriers and give the unconnected an easier path to the internet and the opportunities it brings.”

The basic rationale behind the regulation is that the network that carries the data should be agnostic to data packets, according to Trai Chairman R S Sharma.

“Anything on the Internet cannot be priced discriminately based on source, destination, content and applications. We have used the term discriminatory pricing in place of differential pricing, because differential pricing in the consultation paper had a particular context. Differential word was quite contextual in the regulation, but it was misunderstood in a very larger context. Therefore, to differentiate, we are calling it discriminatory,” he said.

However, Sharma said that the Net neutrality debate is not over yet.

“Net neutrality is a larger question, and we have not gone into that question, though, I must admit, differential pricing is looking at Net neutrality from a tariff perspective. Net neutrality has a number of other components which is fast lane, throttling and differentially treating the packet in terms of speed etc. So this is not a part of this regulation,” Sharma said.

Trai, which put up the consultation paper on differential pricing on December 9, asked four specific questions, broadly on whether telecom operators should be allowed to offer different services at different price points, and models that can be implemented to achieve this.

The regulator had later extended the deadline for comments and counter-comments on its consultation paper. For the consultation process, Trai said that majority of the individual comments received did not address the specific questions that were raised in the consultation paper.

Following are comments from key stakeholders on the crucial Trai verdict:

“India’s telecom regulator decided to restrict programs that provide free access to data. This restricts one of Internet.org’s initiatives, Free Basics, as well as programs by other organizations that provide free access to data. While we’re disappointed with today’s decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world. Internet.org has many initiatives, and we will keep working until everyone has access to the internet. Connecting India is an important goal we won’t give up on, because more than a billion people in India don’t have access to the internet. We know that connecting them can help lift people out of poverty, create millions of jobs and spread education opportunities. We care about these people, and that’s why we’re so committed to connecting them. Our mission is to make the world more open and connected. That mission continues, and so does our commitment to India.”

Mark Zuckerberg, Facebook Chief Executive

“BJP wholeheartedly welcomes the Trai decision on differential pricing. The decision is a clear expression of popular will. The government made sure proper processes were followed at all levels which eventually led to the victory of an open and equal Internet… It is gladdening to see that the NDA government ensured unparalleled transparency in the entire issue of net neutrality.”

Ravi Shankar Prasad, Telecom Minister

“Differential pricing could be useful in connecting the unconnected in India. This is an upfront disbarment. We believe that it was an appropriate tool to allow consumers who have never been on the Internet, to enjoy getting accustomed to it without getting sticker shock.”

Rajan Mathews, Director General, Cellular Operators Association of India

“TRAI regulation on differential pricing is a welcome move. However, the association has a slight concern on the exception. The association hopes that the exceptions to the rule will not be misused by the TSPs. The exception states: …regulation shall not apply to tariffs for data services over closed electronic communications networks.”

Internet and Mobile Association of India (IAMAI)

“The SaveTheInternet.in Coalition welcomes the TRAI’s regulation dated 8 February 2016 which is in favour of Net Neutrality, by putting an end to differential pricing services which would have allowed telecom operators to break the Internet and become gate-keepers and toll-collectors.”

Save the Internet

“With this notification TRAI has decided that all citizens of India will get the same view of the internet which is in line with the principle of non-discriminatory access. What remains to be done is to find innovative ways to actually get all citizens access to this internet as India’s ranking in universal broadband access is abysmally poor and the digital divide continues to widen.”

Arpita Pal Agrawal, Leader – Telecom, PwC India

“The European Union also ruled in favor of treating all Internet traffic equally. Though some of their amendments allowed for differentiation and have been a subject of intense criticism. Telecom service providers may not be happy with this notification. However, they still have the ability and freedom to create different kind of Internet access packages; as long as content is not a parameter to provide or bar access to anyone. Such practices have already started elsewhere with products such as bandwidth on demand, bandwidth calendaring etc. to create premium products. Obviously, it will require changes in network and operations but that’s where the telecom roadmap goes.”

Amresh Nandan, Research Director, Gartner

“TRAI’s decision against differential pricing is something which we heartily welcome. Start-ups like ours heavily rely on open and unrestricted nature of Internet for sustainable growth as it will be critical to drawing millions of customers, who are yet to come online, to services we offer. We have always take a strong pro net-neutrality stance and believe TRAI’s ruling will further supplement good-will generated by recent Government of India initiatives like Start-up India and Digital India Programme for motivating start-ups.”

Abhinav Choudhary, Co-founder, Smartprix.com