Monday, February 15, 2016

Net Neutrality and TRAI Guidelines

There has been an ongoing debate about Net neutrality, not only in India but worldwide. Airtel had launched Airtel Zero, early 2015, which they eventually withdrew after suffering massive public criticism for being against the Net Neutrality ethos. This was however followed by Facebook bringing into our country Free Basics, earlier called
The Telecom Regulatory Authority of India (TRAI) on Monday 08th February, 2016 barred telecom service providers from charging differential rates for data services, effectively prohibiting Facebook’s Free Basics and Airtel Zero platform in their current form.

The basic five point guidelines issued by TRAI were:

No service provider can offer or charge discriminatory tariffs for data services on the basis of content.
No service provider shall enter into any arrangement, agreement or contract, by whatever name called, with any person, natural or legal, that the effect of discriminatory tariffs for data services being offered or charged by the service provider for the purpose of evading the prohibition in this regulation.
Reduced tariff for accessing or providing emergency services, or at times of public emergency has been permitted.
Financial disincentives for contravention of the regulation have also been specified
TRAI may review these regulations after a period of two years.

TRAI’s rulings in their own words:

“No service provider shall offer or charge discriminatory tariffs for data services on the basis of content,” the regulator ruled in its Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016. It said the prohibition was necessary to keep the Internet open and non-discriminatory.

TRAI said a fine of INR 50,000 would be levied per day, subject to a maximum of INR 50 lakh, for any violation of these regulations by the service providers. An exemption, however, has been made for offering emergency services.

“We had issued a consultation paper just about 60 days ago on differential pricing. We deliberated on the issue for quite some time. Anything on Internet cannot be differently priced. This is the broad point that we have highlighted in the regulation,” TRAI Chairman R.S. Sharma told reporters at a conference.

Facebook’s reaction

In an emailed statement, a Facebook spokesperson said, “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.”

Impact and conclusion
While the move was cheered by Net Neutrality activists and industry bodies such as Nasscom and IAMAI, telecom operators, who had been pushing for allowing of differential tariff for data service, expressed disappointment saying the ruling would impact the Narendra Modi government’s ambitious Digital India initiative.

Rajan Mathews, Director-General of operators body COAI, said “We are very disappointed with the ruling. Differential pricing is an effective marketing tool and would have helped in bringing online the next one billion people. We are confused as the decision comes at a time when the government is pushing adoption of Internet.”

Hemant Joshi, Partner, Deloitte Haskins & Sells LLP, said differential pricing for different levels of services was a well-accepted principle across all industries and the concept inherently recognised the economic principle of paying differently for different levels of service and experience.
Amresh Nandan, Research Director, Gartner, said while operators might not be happy with this notification, they still have the ability and freedom to create different kind of Internet access packages as long as content was 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 road map goes,” he added.

Positive indicators

Meanwhile, Net Neutrality activists see it as a positive indication for future regulations on issues such as regulation of over the top applications such as Whatsapp and Skype.

“The regulations are very progressive. They do not seek a middle ground but take a clear stand …We do expect a positive response on the larger issue of Net Neutrality,” said Karthik Balakrishnan, a member of Savetheinternet.
As per the regulations released on 8th Feb, existing plans which are in contravention of the rules can continue for six months, post which they will need to be stopped. Within few hours of the regulations being released, Net Neutrality was the top most trending topic on Twitter in India.

-Manish Aakrit
 Student, INLEAD

 INBM Oct-2015

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