Differential data pricing: Trai floats consultation paper

Amid debate over zero-rating plans and telecom firms offering discounted tariffs for accessing certain websites, Trai today come out with a consultation paper seeking comments on whether such differential pricing should be allowed.
If yes, the sectoral regulator asked what steps should be taken to ensure principles of non-discrimination, transparency, affordable Internet access, competition, market entry and innovation are adhered to.
The Telecom Regulatory Authority of India (Trai) said some plans introduced in the recent past amount to differential tariff plans that offer zero or discounted tariffs to certain content of select websites or applications or platforms.
According to a Trai official, some of the operators are offering plans where they give discounted tariffs to access certain applications like WhatsApp, Facebook and the like, and there are certain platforms that allow access to certain websites free of cost.

Airtel Zero is an open marketing platform that allows customers to access a variety of mobile applications for free, with data charges being paid by start-ups and large firms. Similarly, Facebook's Internet.Org allows access to certain websites without mobile data charges.
"There are a number of variations of these plans. Under

one design, an entity creates a platform in which content providers and TSPs can register. Subject to the approval of the platform provider, customers of TSPs, registered on the platform, will be able to access those websites (either in full or only certain content of those websites) which are listed on this platform," Trai said.

Another method, it said, is to provide discounted data offers by telecom service providers (TSPs) for some identified websites or apps.
(REOPENS DEL 47)
The stakeholders can send back their comments on the
consultation paper by December 30 and counter comments by January 7.
The regulator said it may be argued that while these preferential tariff offers effectively result in easy access to these websites, it may also make the entry of certain websites through the network of the TSPs more difficult.
"For example, a TSP or a group of TSPs could come up with such differentiated tariff offers wherein they disincentivise access to certain websites by putting higher tariffs for accessing them," Trai said.

Where reduced rates are tied to a specific content, Trai felt, potentially, both positive and negative effects may arise from an economic and regulatory perspective.
According to the watchdog, while it appears to make overall Internet access more affordable by reducing costs of certain types of content, this may potentially go against the principle of non-discriminatory tariff.
"Second, differential tariffs arguably disadvantage small content providers who may not be able to participate in such schemes," Trai explained.
The regulator further said such providers may have difficulty in attracting users if substitutes are available for free.
"This may thus, create entry barriers and non-level playing field for these players, stifling innovation. Therefore, the tariff offerings have to be studied from the perspective of whether it promotes or harms competition," Trai said.

Suggesting alternative models, Trai said one approach might be to delink free Internet access from specific content, and instead limit it by volume or time.
"For instance, a TSP could provide initial data consumption for free, without limiting it to any particular content," Trai said.
The other approach of promoting access through the Internet, it said, could be initiated by the content providers where they could reimburse the cost of browsing or download to customers directly irrespective of the TSP they have used to visit the website.