On 8th February, the Telecom Regulatory Authority of India (TRAI) released regulations and an associated explanation memorandum prohibiting discriminatory tariff for data services. We had earlier posted about the decision of TRAI here. In this post, we are analysing how the decision affects the existing services offered by various Telecom Service Providers (TSP) such as Airtel Zero, Free Basics and specific data packs.
What is Net Neutrality?
Network Neutrality is the principle that states that the entire Internet should be available to everyone on equal terms and the TSPs shall not have any authority for the following actions:
- To allow or block access to any content,
- To increase or reduce the speed for any particular content, or
- To have differential pricing for different contents.
What is Differential Pricing?
Differential pricing means the practice of offering data services at different or reduced price points based on the content accessed by the user. The advocates of Net Neutrality argue that the differential pricing would give a competitive edge to the websites and applications associated with the TSP as such services will be made available at reduced price or with heightened quality, resulting in an unequal and biased internet.
What is the TRAI Regulation on Differential pricing?
The TRAI Regulation mandates the following:
- No TSP shall offer or charge any discriminatory tariffs for data services based on content;
- No TSP shall enter into any arrangement, agreement or contract with any person that would result in discriminatory tariffs for data services; and
- Reduced tariffs for providing emergency services or at times of public emergency is permitted.
The TRAI Regulation deals only with the aspect of differential pricing and all other issues relating to Net Neutrality remains untouched by the TRAI. Our analysis about the TRAI Regulation can be seen here.
How will it affect existing services?
In this part we will analyse how the TRAI Regulation will affect the existing services offered by various telecom service providers.
Free Basics/ Internet.org
Free basics is a highly controversial programme launched by Facebook that plans to bring affordable accesses to selected internet services in developing nations. In India, Free Basics was launched in association with Reliance Communications on 10th February 2010. This Partnership is intended to provide free access to select websites and applications to Reliance users. However, the users would be required to pay charges for accessing any other content. The principle of providing selective access to contents would therefore violate the non-discriminatory pricing policy advocated by the Regulation. Facebook has already shut down the Free Basics programme in India.
Airtel Zero is a platform launched by Bharti Airtel on April, 2015. This platform intents to offer Airtel users free access to certain mobile applications and websites offered by the Companies who have signed up with Airtel. Flipkart has faced the heat from online community over its decision to partner with Airtel under this programme. Under this arrangement the service providers will make payments to Airtel for granting free access to users to their services. This would have a highly anti-competitive effect as the users who want to access any applications of other entities offering similar services will have to pay additional charges. This indirect differential pricing practice is also declared illegal by TRAI in its Regulation as it prohibits TSP’s from entering into any arrangement that would result in offering discriminatory tariffs to the users.
Whatsapp or Facebook Data Packs
The TRAI Regulation will have direct impact on all service specific data packs offered by any TSP. In simple terms, all those Facebook or Whatapp vouchers that gives users 250MB Facebook or Whatsapp data for thirty rupees are not allowed under the new regulations. The explanatory memorandum attached to the TRAI Regulation states that the TSP’s are prohibited from offering different tariffs based on the application or platform that a user is accessing.
However, the TRAI Regulation will not have any effect over the any other forms of tariff differentiation that are entirely independent of the content. Therefore, the platforms like the Aircel Free Basic Internet, which provides its users low speed internet for free will not fall under the purview of the new Regulation.
Authored by Nithin V. Kumar.