TRAI & Net Neutrality Are Back: Telecom Regulator Issues Paper Addressing Nuances of Zero-Rating

The regulator is examining whether giving away free data is possible without violating its earlier regulations on net neutrality and differential pricing of data.

R.S. Sharma. Source: eletsonline

TRAI Chairman R.S Sharma. Credit: eletsonline

New Delhi: The Telecom Regulatory Authority of India (TRAI), on Thursday, issued a consultation paper that essentially seeks to address the nuances of differential pricing of data, a controversial practice that the regulator banned in its earlier set of regulations on net neutrality.

“The following… seek response from stakeholders on possible options to facilitate free access to certain websites/contents or incentivising user to visit certain website/app without violating the existing TRAI Regulation on discriminatory tariff for data services,” the consultation paper reads.

Differential pricing of data – or allowing telecom service providers to subsume the costs of data for specific applications or websites – was outlawed by TRAI earlier this year after the Save the Internet campaign argued that it could distort market competition.

Critics of TRAI’s net neutrality regulations at the time argued that the harmful effects of zero-rating weren’t wholly backed by empirical data and that the larger question of ensuring Internet access to India’s rural population was ignored.

This time around, TRAI appears to be looking more deeply at the nuances of zero-rating as a means of bringing more Indians online. To be clear, it isn’t looking at reverting its decision that bans services such as Facebook’s Free Basics. The regulator is instead looking at whether a “TSP-agnostic platform” that has no gate-keeping function (thereby ensuring a fair, level-playing field) could be allowed in order to “give consumers more choices for accessing the Internet.”

TRAI, in a remarkably level-headed consultation paper, offers a few examples. One such example is the model followed by companies such as Gigato and mCent which provide data recharge coupons (essentially giving away free data without being a gatekeeper) in exchange for the customer downloading a specific application or performing some activity on a particular website. Another example that it gives is that of a “dont charge” or toll-free API, where the telecom service provider doesn’t act like a gatekeeper. Here, TRAI notes, “the platform owner has a business interest to allow any and every content provider thus making the model neutral”. Unlike the ‘rewards-for-free-data’ model, a toll-free API model helps low or zero-balance users.

Some supporters of net neutrality are against models like this as they believe it goes against the strict definition of what constitutes net neutrality while still distorting market competition. Others however believe a certain amount of leeway can be given in order to ensure greater Internet connectivity.

“There may be a number of other possible solutions to provide free data or suitable reimbursement to users without violating the principles of differential pricing for data laid down in TRAI regulation,” the consultation paper reads.

The consultation paper consequently asks three questions:

Question 1: Is there a need to have TSP agnostic platform to provide free data or suitable reimbursement to users, without violating the principles of Differential Pricing for Data laid down in TRAI Regulation? Please suggest the most suitable model to achieve the objective.

Question 2: Whether such platforms need to be regulated by the TRAI or market be allowed to develop these platforms?

Question 3: Whether free data or suitable reimbursement to users should be limited to mobile data users only or could it be extended through technical means to subscribers of fixed line broadband or leased line?

Written comments on the consultation paper are invited from the stakeholders by June 16th, 2016 and counter-comments by June 30th, 2016.