The Telecom Regulatory Authority of India (TRAI) has laid down rules that strictly prohibit the differential pricing of data on the basis of content in India — which effectively bans zero-rating initiatives such as Facebook’s Free Basics and Airtel’s Airtel Zero programme — and marks for the first time an official attempt at defining how net neutrality will be upheld in the country.
The telecom regulator, on Tuesday, ended a year-long consultation process that has been marked by multi million dollar propaganda exercises and the rise of a netizen-fuelled movement and furious lobbying by releasing a much-awaited set of rules and regulations.
“No service provider shall offer or charge discriminatory tariffs for data services on the basis of content. Further, no service provider shall enter into any arrangement, agreement… that has the effect of discriminatory tariffs for data services being offered or charged to the consumer on the basis of content,” the regulator said in a statement.
By defining both methods of differential pricing, the regulator now prohibits telecom companies from zero-rating data to gain more customers (as in the case of Free Basics) or charging an exploitative price to have services be zero-rated on their network (Airtel Zero).
While Free Basics and Airtel Zero have sparked the most controversy and been the focus of much media attention over the last two weeks, where customers will be hit the hardest in the short-run is that these regulations will also prohibit the ‘free Facebook/WhatsApp’ data packages that consumers use in order to avoid hefty data charges.
In this process, TRAI has not only taken a strong stand against technology companies that look to use zero-rating of data as a means of entrenching and expanding their market share, but also defined crucial terminology that will be useful in the future.
In addition to laying down specific rules against the discriminatory pricing of data, TRAI also includes an enforcement clause in the ‘Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016’.
“A service provider in contravention of these regulations, the Authority may, without prejudice,… direct the service provider to pay an amount of Rs. 50,000 for each day of contravention, subject to a maximum of Rs. 50 lakh,” the regulator has laid down.
Exemptions and the Way Forward
Even while the regulator has taken a strong stance in favour of net neutrality, the body lays down specific exemption cases including one exemption that may be innocuous but will require further clarification in the future.
One of the major exemptions to discriminatory pricing of data is all emergency services. As TRAI puts it: “A service provider may reduce tariff for accessing or providing emergency services, or at times of grave public emergency.” While some obvious examples include services in the field of health and law and order, other less obvious examples include cities that are affected by natural disasters. As TRAI Chairman RS Sharma pointed out, during the Chennai floods certain communication services such as WhatsApp could be temporarily zero-rated in order to ensure that communication is up and running.
Another exemption that the regulatory authority gives, which is a little puzzling, is that the newly issued regulations will “not apply to tariffs for data services over closed electronic communications networks”.
In an earlier portion of its released document TRAI defines closed electronic communications networks as “data that is neither received nor transmitted over the Internet”. While this could be understood by actors in the telecom industry to include content products that are owned by telecos can be differentially priced, further clarification is still necessary. It may be that TRAI feels that it cannot regulate services that don’t pass data over the Internet or that more regulation may be laid down in the future.
For now, TRAI, its Chairman R.S Sharma and the folks behind the Save the Internet movement can take a bow. While specific details may still need to be worked out, these regulations will go a long way in shaping the future of India’s digital and Internet ecosystem.