TRAI’s differential pricing verdict and what it means for Net Neutrality

TRAI's ruling on Discriminatory Tariffs order supports Net Neutrality. A look at the full scope of what this order means for a consumer.

Written by Shruti Dhapola | New Delhi | Updated: February 10, 2016 11:05 am
TRAI, Net Neutrality, TRAI order, TRAI differential pricing, TRAI bans zero-rating, TRAI order, TRAI bans free Basics, TRAI full order, Mark Zuckerberg, Facebook CEO Mark Zuckerberg, Free Basics vs Net Neutrality, Net Neutrality in India, SaveTheInternet, technology, technology news TRAI’s differential data pricing order effectively bans all zero-rating platforms in India and comes out in support of Net Neutrality.

TRAI’s much-awaited Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016 is being hailed for its support of Net Neutrality. The order comes nearly two months, after the regulator first floated a paper questioning whether differential tariffs should be allowed for data services linked to specific content.

TRAI’s paper examined the legality of such tariff plans, and whether these will end up being discriminatory. TRAI’s paper was linked to one of the key principles of Net Neutrality: that all data should be treated equally, with no preference in speed or pricing to any particular set of content.

Read: TRAI supports Net Neutrality; slams differential pricing: Here’s everything you need to know

We take a look at the full scope of what this order means.

What does TRAI say on the issue of differential pricing and data services?

The TRAI order ends the debate on the issue by prohibiting all such data services which provided access to some websites for free. The focal point of the order is this: TSPs or service providers can’t charge differently for data services based on content. Nor can they enter into any arrangement or contract for allowing such discriminatory tariffs for data. The order effectively bans zero-rating platforms like Facebook’s Free Basics or Airtel’s Zero or any special data packs for a particular app or website.

Has TRAI made any exceptions in its order? Can the current order be reviewed?

Yes, the regulator has made an exception in situations of grave emergency. The order says that in a situation of public calamity a TSP can introduce reduced tariff for accessing or providing emergency services. However, the same has to be reported to the regulator within seven working days. TRAI will decide if the tariff qualifies under the exception.

TRAI has also made an exception for intranets or closed communication networks, saying that these can have differential data pricing. However, it says if a closed network is used to evade the prohibitions, then escape clause won’t apply.

Read: TRAI bans differential data pricing: Mark Zuckerberg disappointed with ruling

The regulator will review these orders two years after the expiry of the data of order; this means that in February 2018, the issue will be re-examined.

What does the current order mean for zero-rating platforms like Free Basics?

For now, the focus has been on how the order impacts zero-rating platforms. Facebook’s Free Basics app, which was launched in association with Reliance Communications, is now banned. TRAI has taken a strong stand against linking of free data with specific content, noting that allowing something like this hamper the idea of an ‘open Internet.’

Does the TRAI order also impact data-packs, which had offered access to sites like WhatsApp or Wikipedia for free?

While Facebook has been in focus over differential pricing even though the reach of Free Basics in India is insignificant at the moment, what will have more impact for telcos and consumers is the part that says it needs to examine claims that volume-based discounts on popular applications through content-specific data packs could enhance user choice through the freedom to choose suitable data service.

TRAI says Internet access is not a ‘search good’ but an ‘experience good’ that will be understood only after being used. So data packs that offer unlimited access to a certain type of app or service, like Whatsapp or Facebook, for a small fee will also become illegal. People on existing plans of the kind can continue for a maximum of six months.

What happens to those who violate the order? Under what authority can TRAI implement this?

TRAI will impose a fine of Rs 50,000 per day the order is violated, which is subject to a maximum of Rs 50 lakh. TRAI says it will give reasonable opportunity to the violators before asking them to pay the fine. TRAI is exercising its powers under the section 36 of Telecom Regulatory Authority of India Act 1997 (24 of 1997) to impose this order. However, the aggrieved parties can go to a High Court under Section 227 of the Constitution and seek a quashing of the order.

Does this mean that India has a new law on Net Neutrality?

No. This is just a smaller aspect of the entire Net Neutrality debate. Net Neutrality can be compromised in many other ways too, for instance by throttling data speeds which is a common practice among ISPs in India. There are going to be many more debates before we reach a conclusion.

What are the arguments used by TRAI to justify ban on discriminatory data services?

TRAI has rejected the argument that differential pricing could help increase Internet penetration in India, and eventually encourage users who access a part of the Internet for free to move on to the ‘full Internet’. The regulator said that TSPs can’t be allowed to “define the nature of access” and thus the “users’ internet experience.” It also questioned how users who can’t afford data in the first place will eventually move on to the complete Internet, if “they don’t have the resources to do so.”

Must Read: TRAI supports Net Neutrality: Key points from the differential data-pricing order 

TRAI has also raised the issue of a conflict of interest when the service provider is also competing with other content providers. It notes that differential pricing would give these service providers an unfair advantage. What this means is that the big teleco players like Airtel, Vodafone, which have often clubbed free content such as movies or music with their apps like Airtel Wynk or Vodafone Play are also affected.

TRAI’s order essentially quashes the power of TSPs to provide their content for free on their networks.

Has TRAI really come out in support of Net Neutrality and the open internet principle?

By far, this is the strongest endorsement of Net Neutrality that TRAI has given. However, the issue of VoIP apps like WhatsApp or Skype and whether they could come under a licensing regime as telecos have been demanding, remains unresolved.

Technically, India still does not have a law that endorses Net Neutrality as whole. Until the Parliament passes one, the latest order is the closest India has to a pro-Neutrality stand.

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TRAI’s order has supported the principle of the open Internet, and says that differential data pricing might “reduce the network effects associated with Internet as the usage of the broad Internet as it exists may go down,” which the regulator believes is not good for society.

The regulator says that just because a TSP is offering data services to the consumers, does not mean that it controls the “Internet infrastructure” in its entirety. This is important since telecos have long argued that while they provide the infrastructure, OTTs and other content providers reap the benefits with their growing user base.

Is the debate on Net Neutrality over?

Given that there’s no law on the subject, the debate is unlikely to end in 2016. As more and more Internet users come online in India, especially via mobile, the fight for their screen space, between telecos, content providers will continue. The lack of a law means that telecos might still go to court against the order.