 "Trai bats for net neutraility, says no to differential pricing")
The telecom regulator on Monday struck down differential pricing for internet services offered by telecom players to mobile users, in a bid to uphold the principles of net neutrality.
This will be a big blow to Facebook’s Free Basics — and other zero-rated platforms such as Airtel Zero — for which the social media giant had launched an aggressive campaign in December last year.
Bharti Airtel had launched Airtel Zero last year in April, but withdrew it after criticism, while Free Basics, earlier named internet.org, is operational in 19 countries, including some in Africa.
“Telecom service providers will be prohibited from offering different/discriminatory tariffs based on content, service, application or any other data which the user is accessing or transmitting on the internet,” Telecom Regulatory Authority of India (Trai) said.
However, providing limited free data that enables users to access the entire internet will be allowed. In emergency situations, such as floods and earthquakes, operators will be allowed to offer free data plans.
Violation of rules fixed by Trai will attract hefty fines — financial disincentive of Rs 50,000 for each day of contravention, subject to a maximum Rs 50 lakh. Trai’s views came after two months of deliberations on the issue.
“Differential pricing is not in the interest of the consumers, the growth of the internet, and open and non-discriminatory internet,” said Trai Chairman R S Sharma.
Differential pricing means charging customers different prices for access to different websites and services. Zero-rating platforms are services — developed by telcos in partnership with internet service providers (ISPs)/app makers come — give free access to customers for certain applications/websites.
“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,” said a Facebook spokesperson.
The social media giant had entered into a tie-up with Reliance Communications in India to launch Free Basics. But, Trai had asked RCom to suspend the commercial launch of the product till its approval.
Telecom operators association, Cellular Operators’ Association of India (COAI), also expressed its displeasure over the Trai’s rules.
Rajan Mathews, director-general, COAI, said: “The telecom sector is disappointed with Trai’s decision to rule out differential pricing. Allowing price differentiation would have taken us closer to connecting the one billion unconnected citizens, apart from improving economic efficiency, increase in broadband penetration, and reduction in customer costs.
For now, operators cannot enter into any arrangement based on discriminatory pricing and would be fined if they do so. These rules do not apply to closed electronic communications network, where data is neither received nor transmitted over the internet.
The regulator had asked Facebook to ask its users to specifically answer the queries in the paper.
Experts had a mixed reaction to Trai’s proposals.
Hemant Joshi, partner, Deloitte Haskins & Sells LLP, said: “Differential pricing for different level of services is a well-accepted principle across all industries — energy, railways, and airlines. The concept of differential pricing inherently recognises the economic principle of paying differently for different levels of service. In the telecom sector, there are virtual highways that need to follow the same principle.”
He added that the European Union was considering allowing “specialised services” with a few priority services having in the fast-lane internet. “More awareness and education is needed about the economics of differential pricing and its long term implications on the sector and the consumers.”
Arpita Pal Agrawal, leader, telecom, PwC India, said, “What remains to be done is to find innovative ways to actually get all citizens access to internet as India’s ranking in universal broadband access is abysmally poor and the digital divide continues to widen.”
But, IT industry body Nasscom came out in the support of Trai’s regulations saying it is balanced for retaining the provision to allow for reduced tariffs for public emergency.
“Our submission highlighted the importance of net neutrality principles, non-discriminatory access and transparent business models aligned to the goal of enhancing internet penetration in the country,” R Chandrashekhar, president, Nasscom, said.
“The decision is fully in line with the BJP-led NDA government's vision of open and fair Internet and support to net neutrality," said Communications and Information Technology Minister Ravi Shankar Prasad
ROAD TO NEUTRALITY
How the telecom regulator decided to disallow discriminatory rates
2015
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Feb: Reliance Communications and Facebook announce launch of internet.org. RCom’s customers can use it to access certain websites for free
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Apr: Bharti Airtel launches Airtel Zero. Mobile users can access certain applications for free. Service withdrawn after protests
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Dec: Trai issues a consultation paper on differential pricing in data services. Experts claim these plans violate the principles of net neutrality
Facebook launches an aggressive campaign to promote Free Basics, asking users to send the regulator a mail, but Trai says these would not be considered as the responses don’t answer its questions
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Jan: Trai gets 2.4 million comments (1.8 million from Facebook users)
- Feb: Trai disallows data plans with discriminatory tariffs
NET NEUTRALITY IN DIFFERENT COUNTRIES
IN UNITED STATES
The term ‘net neutrality’ was coined in the US by law professor Tim Wu while discussing “competing contents and applications.” In the latest in the net neutrality tussle, Federal courts have given go ahead to rules that prevent net firms from blocking or slowing down online traffic. The courts are not postponing implementation of net neutrality rules, despite opposition from firms such as Verizon and AT&T. The Federal Communications Commission is fighting to uphold net neutrality
IN EUROPEAN UNION
European Parliament in September 2015 voted against net neutrality for the entire Union. Only Slovenia and the Netherlands have net neutrality laws
IN AUSTRALIA
The country’s National Broadband Network (NBN) is holding discussions on net neutrality. NBN says the issue needs to be debated widely before taking a final decision
IN CHINA
While China claims to have net neutrality, experts say internet service providers are owned and operated by the government, which has an iron grip on the content. In the early days of the internet in China, the Communist Party stopped attempts by China’s Democracy Party to establish free internet access. Experts say the Chinese government employs sophisticated technology to limit content online
WHAT IT MEANS
No service provider can offer or charge discriminatory tariffs for data services on the basis of content, service, application or other data that a user is accessing or transmitting on the internet.
Emergency services kept out
TOUGH PENALTY
Violators of the regulation would be charged Rs 50,000 a day, subject to a maximum of Rs 50 lakh
ROAD AHEAD
Trai may review these regulations after two years
