Jolt to Zuckerberg as Trai says no to discriminatory tariff

Even as many developed countries, including the United States, are still deliberating on what path to take on net neutrality (NN), India's Telecom Regulatory Authority of India (Trai) on Monday took a historic stand on it and came out with a regulation prohibiting "discriminatory tariff for data services".

This, in essence, means that the telecom watchdog has batted for an "open and non-discriminatory" internet and shot down schemes like Facebook's FreeBasics and Bharti Airtel's Airtel Zero, which provided undue advantage to certain websites based on tariff.

"Keeping in view India's large number of internet users and content producers, both of which are rising exponentially, the Authority (Trai) has taken a view that prohibition of discriminatory tariff for data services is necessary to ensure that service providers continue to fulfill their obligations in keeping the internet open and non-discriminatory," said the statement issued by Trai on the regulation titled – Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016.

To make the regulation stringent, it has suggested a fine of Rs 50,000 per day, up to Rs 5 lakh, in case of violation of the order by telecom operators.

Trai's order has come after several months of debates and discussions, and intense lobbying by all involved parties, including telecom service providers (TSPs), Facebook, internet activists and others.

RS Sharma, chairman of Trai, said the sector watchdog's recommendations were delayed due to an avalanche of feedback it got in response to the consultation paper on differential pricing issued by it.

"We were to come out with our recommendations by the end of last month (January). It took a little longer because the responses were large in number and we also covered a lot of other issues. We had to process through all the responses," he told reporters.

However, internet activists like Kiran Jonnalagadda, founder of HasGeek, who fought tooth and nail against behemoths like telecom operators, Facebook, Google and others for an open internet, say Sharma and an "extremely sensible bunch" of government officials were instrumental in making the regulation possible.

"We were up against Facebook. You can imagine Facebook's might against ours. It was not easy at all, but fortunately, as we have realised, people in the government are an extremely sensible bunch. By showing them the facts, we won them over to our side," he said.

According to Jonnalagadda, change of Trai head helped a lot. "I would say the new chairman (Sharma) was someone who was keen on doing things the right way. Presenting the facts was enough to get him to act in the right manner," he said.

For him, the battle was not over yet. "This is a major victory for net neutrality and internet, but it's not the end of it. Among the things that could happen is this (Trai's regulation) can be challenged in the court or TDSAT (Telecom Disputes Settlement & Appellate Tribunal) by telecom operators," he said.

Besides that, the activists were now gearing up for another battle – speed-based discrimination. "So far, price-based discrimination has been covered, but there is also speed-based discrimination, which the Trai has not done anything about," he said.

Internet activists also want the government to come out with a legislative order on the NN through parliament.

Rajan Mathews, director general of GSM players lobby body Cellular Operators Association of India (COAI) told dna it was "setback" for telecom companies (telcos) and the government.

"We had argued quite effectively saying operators should have flexibility in offering these (FreeBasics and Airtel Zero) types of tariff in order to help the government implement its policy of connecting the next one billion unconnected. So, we definitely see this as a setback for both the operators, in terms of their marketing plans, as well as the government's plan to connect the next one billion," said COAI chief.

Mathews said the lobby body's next course of action would be decided after going through the regulation statement "carefully".

"What we'd like to do try is to understand the rationale on which the decision has been taken and see if there's any flaw in it and bring it to the attention of regulator (Trai) and Department of Telecom (DoT). Then, the DoT can then ask Trai to reconsider things," said an optimistic Mathews.

Hemant Joshi, partner, Deloitte Haskins & Sells LLP, also argued in favour of differential pricing for data services.

"Differential pricing for different level of services is a well-accepted principle across all industries from energy, railways, airlines, buses, highways (tolls), etc," he said in a statement issued by the Deloitte Haskins and Sells.

He called for "more awareness and education" to understand the economics of differential pricing and its long-term implications on the industry and the consumer.

The issue had also attained a political hue with Congress vice-president Rahul Gandhi jumping into fray a few weeks back to lend his support for neutrality of the internet.

A statement issued by the party's communications in-charge Randeep Singh Surjewala, said Congress "welcomes the decision of Trai to negate differential/discriminatory data pricing and ensuring net neutrality".

Jonnalagadda said India had set an example for net neutrality regulation, which could be copied by other countries.

"US is still debating it (NN). For the first time, India is ahead of it (US) in taking an important decision. This is something that the world will copy now. India is the leader nobody has caught up," he said.

The Trai said its prohibition will not apply to other forms of tariff differentiation that are entirely independent of content and comes into effect immediately. It would also not apply to emergency services provided at "times of grave public emergency".