Putting an end to the controversy over differential pricing on the Internet, the Telecom Regulatory Authority of India (Trai) on Monday ruled that differential pricing for data services will not be allowed in the country.
“No service provider shall offer or charge discriminatory tariffs for data services on the basis of content,” the telecom regulator said in its Prohibition of Discriminatory Tariffs for Data Services Regulations, which will come into effect immediately.
Differential pricing means charging of different tariffs by a service provider for data services based on the content accessed, transmitted or received by the consumer.
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The regulator has also set a penalty of Rs 50,000 for each day of contravention, subject to a maximum of Rs 50 lakh. Under the Trai Act, though, the penalty for contravention can attract a fine of up to Rs 2 lakh for each day during the period of default.
MUST-READ: Key points from the TRAI order
“Anything on the Internet cannot be differently priced… this (Trai’s order) would disallow any project which works on the principle of differential pricing,” Trai chairman R S Sharma told reporters.
The regulator, however, added that a service provider may offer data services at reduced tariff, when differential data pricing might become unavoidable, especially at times of “grave public emergency”, provided such tariff shall be reported to the regulator within seven working days from the date of implementation of the reduced tariff.
Trai said it would review its policy on differential pricing every two years. Trai also gave service providers six months to comply with the new rules.
“No plan, pack or voucher already subscribed by a pre-paid or post-paid consumer providing differential data tariff based on content, shall be in operation beyond a period of six months from the date of these regulations coming into effect,” it said.
Facebook’s Free Basics plan, launched in some three dozen developing countries, offers pared-down web services on mobile phones, along with access to Facebook’s own social network and messaging services, without charge. The US-based company had promoted its Free Basics campaign through massive advertisements and even asked its users to support Free Basics by writing via email to Trai. Earlier, Trai had asked Reliance Communications, Facebook’s distributor of Free Basics in India, not to offer the product on a commercial basis in the country.
Airtel had also attempted to launch Airtel Zero in April 2015, but had then put its plan on the backburner.
Proponents of net neutrality had demanded Internet service providers to give equal access to all content and applications without favouring, blocking or slowing down of any particular application or website.
During its consultation process, the regulator had asked stakeholders whether telecom service providers should be allowed to have differential pricing for different websites and applications. Trai had received 24,00,000 comments, of which over 14,00,000 were in favour of Facebook’s Free Basics platform. But the regulator had said a majority of views lacked clarity and were of no use.
Facebook expressed its disappointment over the regulations, saying, “Our goal with Free Basics is to bring more people online with an open, non-exclusive and free platform. 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.”
Hemant Joshi, Partner, Deloitte Haskins & Sells LLP, said, “Differential pricing for different level of services is a well-accepted principle across all industries, from energy, railways, airlines, buses, highways (tolls), etc. The concept of differential pricing inherently recognises the economic principle of paying differently for different levels of service and experience. In the telecom sector, there are virtual highways that need to follow the same principle. EU is considering allowing ‘specialised services’ with few priority services having fast lane internet connection.”