We’re not against free access to websites, we’re saying can’t use differential pricing architecture: TRAI Chairman

TRAI Chairman R S Sharma talks about the Net neutrality debate and explains the regulatory body’s reasons for ruling out differential pricing for data services, says he wouldn’t describe telecom companies presenting their arguments as ‘pressure’, and explains what they are doing to tackle the problem of call drops

By: Express News Service | New Delhi | Updated: February 27, 2016 6:30 am
net neutrality, facebook, facebook free basics, data plans, data tariff, differential pricing data plan, internet.org, trai, trai free basics order, trai chairman, rs sharma, trai rs sharma, idea exchange, indian express TRAI Chairman RS Sharma during the Idea Exchange. (Source: Express photo by Renuka Puri)

Why R S Sharma ?

Before assuming office as the TRAI Chairman, R S Sharma was the IT Secretary. He has been a part of the Aadhaar project and worked closely with Nandan Nilekani. Sharma was instrumental in ensuring that the NDA government took the Aadhaar project forward from where the UPA had left it, instead of doing away with the scheme completely. He has a Masters degree in Mathematics from IIT- Kanpur and a Masters in computer science from the University of California

ANIL SASI: Would you share some of your insights on the whole Net neutrality debate and the strong stance that the government took with the final order?

Net neutrality is a larger concept. What we have tackled is some aspects of Net neutrality from a tariff perspective. I would not say it’s strong. The process started on December 9 where we brought out the basic issues, a consultation process began and we put out certain questions on differential tariff. We asked whether differential tariff should be allowed or not, what should be the objectives of differential tariff, that can also be achieved through other means. These questions got a huge response, millions of them. And that’s actually a record for TRAI. We got different types of responses. One set of responses were from individuals, groups and associations; some responses were also template responses, in the sense that there was the same text in every message and these template responses were from Facebook users and ‘Save the Internet’ people. Then we kind of consulted everyone, we had an open-house discussion and came to this conclusion (ruling against differential pricing for data services). We have issued a detailed memorandum on the rationale behind the position we took. It’s a 12-13 page memorandum. It examines the issue from a technical perspective, from a legal perspective, from social perspective and from an economic perspective. All dimensions have been sliced and diced and then we have come to this conclusion.

CARICATURE-trai chairman (Source: E P Unny)

MANEESH CHHIBBER: Was there any pressure from telecom companies about the kind of things that they were expecting from your order?

The regulator’s job is a tricky one because you have a number of stakeholders. So obviously in this particular case, the telecom companies were the stakeholders. Then, of course, there were those entities that were making products on this architecture — Facebook is one example — they were stakeholders too. The people were the stakeholders, start-ups, content providers, they were also the stakeholders. And obviously, every stakeholder would like to present his/her argument in a cogent manner, and they did. So I would not call it pressure. TRAI did not have any pressure from anybody. Everybody was putting forth their argument.

SANDEEP SINGH: On the penalty aspect, the order says that if you don’t comply with the rules, you will have to pay Rs 50,000 per day, with a cap of Rs 50 lakh. So can people flout the norms and get away by paying the penalty?

That is not the case. In the TRAI Act, there is a provision which says that if somebody is violating the rule, you can make a formal complaint in the court of the chief judicial magistrate. So what happens is that first one issues notices, then imposes penalty, and if it still doesn’t work, then the ultimate step is taken — to file a complaint before the competent judicial authority. That’s how it works. So one should not imagine that one can continue to pay just the financial penalty and that’s the end of it.

net neutrality, facebook, facebook free basics, data plans, data tariff, differential pricing data plan, internet.org, trai, trai free basics order, trai chairman, rs sharma, trai rs sharma, idea exchange, indian express “If Free Basics wants to provide free internet connectivity to certain websites, we are not stopping that. We are only stopping them from using this (differential pricing) architecture. If they can evolve a system of not depending on telcos, and subsidise some websites, they can do that”

RISHI RAJ: In the run-up to the entire consultation process on Net neutrality, there were talks of case-by-case analysis for differential pricing. In your explanatory memorandum, you have explained that case-by-case method provides regulatory uncertainty and that it’s a costly approach, which helps cash-rich operators. But there are several tariff plans today and the operators too are seeking clarification on what is Intranet, what will be allowed etc. So ultimately, TRAI will have to examine a lot of tariff packages. Don’t you think that there will be a situation where each and every tariff plan will have to be examined in a much more rigorous manner to prevent violations?

No. ‘Case-by-case basis’ simply means that you allow something, you disallow something. We provide the case-by-case approach in the regulation itself. We have explained in our explanatory memorandum that it creates a lot of uncertainty, people don’t know if what they do will come under this case or that case, that is the problem and there are costs involved. The regulation per se is extremely clear. It says anything on the Internet cannot be differentially priced and anything which is not on the Internet is not our concern.

And what is on the Internet is defined in the regulation itself. What is Internet? It has a set of protocols, it uses the IP addresses and all those aspects. So I think it’s fairly clear. We probably need some kind of FAQs — scenarios 1, 2 3, those kind of things. And we propose to put down an FAQ in the near future, where we will clarify all queries. We also propose to sit with the industries and discuss the situation. I think we have taken a fairly clear approach.

R JAIKRISHNA: On differential pricing, don’t you think you have sort of disarrayed a larger concept in the marketing world because differential pricing exists in all products, all industries. Isn’t there some kind of a disconnect?

Let me put it this way. This word ‘differential’ is being misinterpreted. It was brought up in our open-house discussion session too. It is a very valid industry practice. ‘Differential’ here means deciding price on the basis of content, depending on what you are accessing, where you are accessing it from and what content your (online) packet contains. But you basically cannot differentiate on this basis. And there is a very strong logic given for this in the memorandum.

R JAIKRISHNA : Was there also a concern about public opinion while formulating the policy? Because the questions of pricing based on content, telcos deciding on content etc, is a larger debate.

There were many issues that we have not discussed and so I will not get into them. There are privacy issues involved. There are issues of you finding out where I am going, what kind of content I view or have. Actually, the beauty of the Internet is how the routing takes place. Now if you start keeping a tab on where a fellow is going etc, then you are not keeping things simple.

SANJAY SINGH: When will call drops end? You are also supposed to meet the CEOs of some telecom companies.

Now see call drops, I cannot talk about it much because the matter is sub-judice. The Delhi High Court has heard the matter and there may be a judgment soon. So it is not appropriate for me to talk about it.

(On meeting with CEOs) Now we are conducting these drive tests, where we drive on a road in, say, Delhi, for around 300 km and see whether or not the call drops. Earlier, we would do this in Delhi and Mumbai only. Now we have started doing it in seven cities. But telcos had a problem with that. They said you are only taking routes where we have weak signal strength. So we asked all telcos to submit a list, and based on that, we decided our route. We conducted the test, shared our findings with them, and then we published the results.

A few days ago, I heard from the telcos association, asking us why we shared the results. Now I don’t understand this. We have no interest in manipulating the figures, or showing someone at an advantage over someone. We have nothing to gain from that. We keep having meetings with telcos, and quality of service is one very important issue we are dealing with.

So we’ll have these discussions (with the telecom companies), probably ask them what are their problems. If they have any problems, we will solve them. But we believe in transparency, we believe in keeping the public informed about their (telcos) performance results. People have a right to know.

The public is a very big stakeholder, and we believe its voice is often not heard. So we have a very proactive approach in making its voice heard to the extent that we can.

SANJAY SINGH: Have you set a timeline to review the differential pricing process?

We have said in the regulation that we will review it in two years or earlier, but that is a part of every regulation. In the world of technology, things keep changing. We need reviews. Many regulations issued, say, 20 years ago, have become irrelevant and we can probably scrap them.

SANTOSH TIWARI: Why is the Aadhaar-based Direct Benefit Transfer (DBT) not moving forward even after four years? It has not really gone beyond LPG.

DBT transactions to the tune of 2 billion per year, the credit transactions, are already happening. For LPG credit, there are 14 crore customers, and for each customer, if you take 10 cylinders per year, then 1.4 billion credit transactions take place. So DBT is happening. But you have to realise that for DBT to function effectively, the beneficiaries’ bank accounts have to be seeded with their Aadhaar cards, and it works as a financial address then. So now I don’t have to know your bank account number to transfer money to you. If I say someone’s Aadhaar number is 1234, then I can transfer money to 1234. So we are linking the Aadhaar number to the bank account on one hand, and then linking the Aadhaar number with the beneficiary database, on the other.

In the US, when you make any transaction, they first ask you for your social security number. So the linking takes place at the time of acquisition by the customer itself. Here customers come first, Aadhaar later. So you have to retrofit Aadhaar to customer databases on both the beneficiary side and the banking side. It’s a one-time job, but it has to be done. So states are working overtime to seed the databases of different schemes, and a lot of innovation is happening here. LPG database is complete and so we may have heard only about it, but lots of states are doing very good work to make the seeding happen.

ANANT GOENKA: The ruling on Free Basics, to some degree, is in continuity with the ruling on Airtel Zero. Do you agree or not?

We have given no ruling on Free Basics. In fact we have not mentioned it in our explanatory report, nor have we mentioned Airtel Zero. What we have said is differential pricing by telecom operators based on source, destination and content will not be allowed. Free Basics was employing architecture that used zero rating or differential pricing. Our regulation is on differential pricing, not on Free Basics. If Free Basics wants to provide free Internet connectivity to a certain number of websites, we are not stopping that.

We are only stopping them from using this architecture. But if Free Basics can evolve a system where they are not depending on telcos and they subsidise some websites, they can do that. We are not against free access to websites, we are saying the architecture of differential pricing cannot be used. Differential pricing was one of the components on which Free Basics was built.

ANANT GOENKA: Shouldn’t India be leading the way for regulatory bodies around the world, rather than waiting for what America has to say or what somebody else has said earlier?

India has done many things without looking at the West. India moved from ‘no identity’ to ‘online identity’, whereas the other countries are going from ‘no identity’ to ‘smart cards’ and then to ‘online’. So we have taken a big leap in technology.

Transcribed by  Yashee Singh & Zumbish