Part I: In this three part series (Parts II & III here), we take a look at the TRAI’s ruling on differential pricing in India. Yesterday, TRAI, India’s telecom and internet regulator, prohibited discriminatory tariffs for data services under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997). Here are the key takeaways of the paper (pdf):
The main rulings against price discrimination:
– No service provider can offer discriminatory tariffs for data services (charged to the consumer) or content or get into any arrangement, agreement or contract with a person which has effects of discriminatory tariffs for data services on the basis of content. What cannot be done directly, also cannot be done indirectly.
– The service provider can reduce the tariff (or offer nil tariff) for accessing or providing emergency services or grave public emergencies, only if such tariff is reported to the TRAI within 7 working days from the date of implementation of reduced tariff. The TRAI’s decision on whether this classifies as reduced tariff will be final and binding. No new prohibited packs, plans or vouchers can be launched after today. For those already subscribed to such plans, the plans need to expire within 6 months from today.
– Differential tariffs are not prohibited on intranets, networks which are not accessing the internet. If a closed network is used to evade regulation, it will be prohibited.
– Prohibition will not apply to other forms of tariff differentiation entirely independent of content. Providing limited free data which gives the user access to the entire internet is not prohibited.
Consequences of contravening regulations:
– TRAI will ask the service provider to withdraw this tariff and order them to pay Rs 50,000 to a maximum of Rs 50 lakh for each day of not following the regulation. The fine will imposed only after service providers have been given a ‘reasonable opportunity’ to explain themselves.
– TRAI will review these regulations after 2 years or earlier from today and have the final word on the interpretation of the provisions of the regulation.
Why the TRAI issued a second consultation paper:
– Tariff regulation was getting affected because of non-discrimination and non-transparency of certain practices where differential pricing was offered on the basis of content/websites/apps and platforms. This led TRAI to release its second paper on Differential Pricing for Data Services.
– TRAI states that a majority of individual comments did not address the specific questions raised in the consultation paper. It received responses from 15 service providers, 8 service provider associations and 42 organisations and institutions, along with 25 counter comments.
– The TRAI conducted an open house discussion on 21 January 2016 to discuss the matter with stakeholders.
Disclosures: MediaNama has taken a strong position in favor of Net Neutrality and against price discrimination; Founder and editor of Medianama Nikhil Pahwa is a volunteer with the SaveTheInternet coalition.