Telecos back the idea but Nasscom, IMAI oppose move

Differential pricing in telecom data services has been opposed by both Nasscom, the association of companies in the information technology sector, and by Internet and Mobile Association of India (IMAI), the lobbying entity for the online and mobile value-add services sector, of which Facebook is also a member.

Yet, all telecom service providers (telcos) have favoured the concept, saying it will encourage innovation, beside bringing unconnected people on the internet platform.

To its consultation paper on the issue, the Telecom Regulatory Authority of India (Trai) got 2.4 million comments. Of these, 1.9 mn were from Facebook users and 480,000 through the Save The Internet forum. Trai's final views will decide the fate of plans such as Zero Rating and Free Basics being offered by Facebook. These plans created a furore, with many saying there was a violation of net neutrality principles. Trai's recommendations are expected by the end of this month.

In its comments, Nasscom proposed mandatory prior approval by the regulator, and sharing of periodic information on plans that seek to price lower or zero rate services and content under such programmes. "Differential pricing plans and options should be an exception rather than the rule, including those positioned to address the difficult problem of getting more and more people online in India without compromising on the principles of net neutrality," it said.

IMAI said differential rates would disadvantage the small players and start-ups. "Giving absolute powers to telcos will lead to classification of subscribers, based on the content they want to access (those who want to access non-participating content will be charged at a higher rate than those who want to access participating content). This violates the principle of non-discriminatory tariff (rate). Differential pricing will lead to paid and unpaid prioritisation by telcos that will lead to anti-competitiveness among website/application/platform providers," it said.

Internet Service Providers Association of India (ISPAI) has also opposed differential pricing in data usage for accessing different websites, applications and platforms. "Differential pricing will skew the market, forcing hundreds of thousands of websites and applications out of business, by unfairly driving traffic towards lower cost destinations," it said

FREE ACCESS

• 2.4 million comments received by Trai on its consultation paper on differential pricing in data services; first part uploaded on its website on Friday and second to be uploaded later
• First time Trai has received such a huge number of comments, leading to publishing these in two parts
• On Friday, only some comments would be uploaded later in the evening; the rest (received through Facebook and Save The Internet forum) to be made available later
• Apart from the comments of telecom players and associations, the published comments are not in the format asked by Trai. For instance, one of the comment says, “Facebook is not doing a favour or charity. They are here to make profit. They want a monopoly by killing the competition. Don’t fall in their trap.”

Leading telecom operators - including Bharti Airtel, Vodafone, Reliance Communications and Idea Cellular - came out in full support of differential pricing. Rate determination should be left with the market forces, they said. Reliance Jio, Mukesh Ambani's telecom venture, did not give its comments.

Bharti Airtel has told Trai, "Connecting a billion Indians to the internet will only be possible if cost of access is low enough for price-sensitive customers. Innovative pricing, such as zero rating and other commercial constructs, will be critical for making services affordable enough for large-scale consumption and should be permitted."

Currently, every entity in the internet ecosystem is experimenting with various marketing innovations and business models to promote their content or website/services. Beside, enterprises have been trying to get more customers on board by providing a method to connect with them. For instance, toll-free voice or business-paid, postage-free sampling mechanisms.

Also, sponsored data allows internet companies to cut their marketing budgets, since such arrangements are cheaper than direct advertising, it said.

Vodafone said differentiated pricing in data content expands participation in online content and applications to the under-served, beside raising mobile wireless penetration. "The competitive intensity of the market has resulted in largely self-regulatory mechanisms that have ensured the protection of consumer interests and created various innovative tariff (rate) offerings for consumers," it said.

Idea Cellular said differential pricing was perhaps the only solution, given the colossal task ahead of connecting a billion Indians through the net and making the Digital India vision a reality. "Government and the regulator need to create an environment of innovation and flexibility for operators, as well as application providers, while balancing the same with principles of tariff forbearance, transparency and non-discrimination This has spurred innovation and customisation of solutions in the market."

According to the Cellular Operators Association of India and Association of Unified Service Providers in India, the need is for internet adoption and increased data usage. "Differential pricing plans are important to meet the needs of various segments. Imposing regulations that thwart such developments threaten to increase costs and discourage investment in ways that ultimately work to the detriment of the consumers that such regulation is ostensibly designed to protect," went their reply to Trai.

Also given were some guidelines on how price differentiation should be based, including priority for the unconnected and having transparency, non-exclusivity, non-predatory, non-ambiguous and not misleading pricing policies. Trai had asked stakeholders 'if differential pricing for data usage is permitted, what measures should be adopted to ensure that the principles of nondiscrimination, transparency, affordable internet access, competition and market entry and innovation are addressed.'