Five Reasons Why I think “Zero Rating” Should Be banned – Rohin Dharmakumar, Owntastic

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by Rohin Dharmakumar, founder of Owntastic.

1. It distorts the behaviour of the nascent and incipient Indian telecom market for data services. “Is it free or paid?” (aka, “Is it provided by a rich and well-funded business or not?”) will determine the success and failure of new Internet services. If hundreds of millions of Indians had no problem paying for voice, there is no reason they will not pay for data too, provided telcos work as hard to make data accessible and affordable.

2. Reduces access to a “zero sum game” by forcing consumers to choose between services (free vs. paid) where earlier they may not have needed to.

3. Indian telecom became world class primarily because users paid for voice minutes and had the freedom to do what they wanted with it. Telcos in turn kept innovating on how to produce more minutes and sell them cheaper (aka “minute factory” model). For Indian telecom to be as world-class in data service (“megabyte factory”), we must have users paying for megabytes and having the freedom to decide what they want to do with it. But Zero Rating creates a “moral hazard” for telcos, as they will now focus on selling zero rating deals to businesses (easier) than bringing down per/MB costs and increasing bandwidth caps for their users (tougher).

4. Reduces long-term competition and concentrates dominance of well-funded companies. Young and innovative startups will need to cross another hurdle for every user (in addition to what they currently face), namely, “Do I want to pay for using this service?”

5. Telcos will be expected to show warnings when users move from a zero-rated app to a paid one. For example, “Warning! You are going to be charged for using this app. Are you sure you want to continue?” By the structure, design and frequency of such and other warnings, telcos will be able to “nudge” users away from certain services in favour of those that are zero rated.

Also read:

A. Get Informed

1. Abridged version of the TRAI Paper: http://tinyurl.com/TRAIpaper
2. FAQs on TRAI Paper: http://tinyurl.com/TRAIfaqs
3. FAQs for Indian Startups: http://tinyurl.com/Startupfaqs
4. FAQs for Indian video startups: http://tinyurl.com/TRAIvideofaqs
5. FAQs for Banks: http://tinyurl.com/TRAIBankfaqs
6. Reddit India’s response to TRAI: here
7. Net Neutrality law created by Reddit India users: here

What we’ve been writing

1. Airtel Zero: splitting the Internet into many Internets
2. Net Neutrality: Misconceptions and Misdirections
3. Flipkart signs up for Airtel’s Net Neutrality-violating Airtel Zero