Differential data tariffs ‘may be perceived to be anti-competitive move’

The consultation paper has been issued under Telecommunication Tariff Order

By: ENS Economic Bureau | New Delhi | Published:December 10, 2015 1:20 am

In a move that once again raises the issue of net neutrality and queers the pitch for mobile operators competing to woo consumers by offering special 4G plans as they launch such services, the Telecom Regulatory Authority of India (Trai) on Wednesday issued a consultation paper that disapproves of differential data tariffs being offered by operators through select tie-ups with content providers.

The regulator, while inviting consultation on the subject, seems to be clearly calling services like Facebook’s Internet.org (now Free Basics) and Airtel Zero as discriminatory, non-competitive and thwarting innovation. It even disapproves of packages launched by operators as part of their 4G offering, which enables consumers to download certain movies or applications free.

In an 11-page consultation paper, responses to which have been invited by stakeholders by the end of the month, Trai has said that the perceived aim of such differential data packages, which provide free or discounted access to certain internet services, is to widen the internet user base in the country. As such, the regulator has offered two models, distinct from the ones practised currently by delinking free internet access from specific content. The first model it has suggested is that operators can provide initial data consumption for free, without limiting it to any particular content. The second model proposes that content providers reimburse customers directly the cost of browsing or download irrespective of which operator they have used to visit the website.

The consultation paper has been issued under Telecommunication Tariff Order, which means that since the regulator is supreme in tariff matters and since this does not fall in the policy domain, after the consultative process, it will issue regulations directly rather than sending a set of recommendations to the Centre for a final decision.

Interestingly, the consultation paper comes after the regulator earlier this year brought a somewhat similar paper that aimed at looking at the issue of net neutrality. Sources said that the earlier paper sought to consider whether two set of service providers providing the same services (mobile operators and over the top operators) should be governed under the same regulatory principle, while the current one only looks at differential data tariffs.

Though the consultation paper has not named any specific offering by any operator, the examples of differential tariff packages throw enough hints that it is aimed at services like Facebook’s Free Basics and Airtel Zero. Recently, in their bid to face competition from Reliance Jio, which plans to launch its 4G services shortly, incumbent operators have been offering free download of movies through specific tie-ups. Some even plan to come with a bouquet of data apps for which charges may be nil or discounted.

Commenting on such developments, the Trai paper has said, “Some may argue that if above practice is permitted, telecom service providers may start promoting their own websites/apps/service platforms by giving lower rates for accessing them. They may take advantage of owning the primary access of the consumer by offering better, unlimited connectivity, free or near free, when using their own service or service of their partner, while offering limited or capped connectivity at higher price when consumer accesses some other website/platform. This may be perceived to be anti-competitive move that stifles innovation and competition, leaving absolute power in the hands of the TSP.” FE

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