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Fair Usage Policy and India’s fashionable limited unlimited plans


In light of the FCC imposing a $100 million fine on AT&T for misleading customers with its unlimited data plans, which were still bound by the company’s fair usage policy (FUP), lets take a look at how TRAI handles FUP in India.

For the uninitiated, Fair Usage Policy or FUP, is a policy adopted by ISPs and TSPs to limits a customer’s upload and/or download speed after the customer reaches a certain data cap. FUP is not necessarily bad per se, but the issues come in when terms are not fully disclosed or products are advertised in misleading ways. In AT&T’s case, the company advertised its product as 1.7 to 6 Mbps unlimited, only to throttle down user speed to 256/512 kbps on reaching the five gigabyte set data limit.

Regulation in India: In July 2012, the TRAI had issued a new directive to telecom service providers which provide broadband services, asking them to deliver internet services in a more transparent manner, by providing sufficient information to customers. The directive asked telecom operators to provide customers enough information about various existing plans and the applicable Fair usage policy (FUP). It had also directed service providers to ensure that the connection speed doesn’t go below the minimum specified speed, and that providers alert subscribers whenever their data usage reaches 80% and 100% of the data usage limit, in their respective plans.

This was after the TRAI had issued a similar directive asking service providers to refrain from misleading tariff advertisements, so that subscribers could choose services and tariff plans, without being lured by attractive options that come with a fine print. The regulator had asked service providers to disclose all material information clearly in their ads as well as publish a URL to their website and customer care numbers.

FUP in India: The most significant instance that the TRAI had illustrated then, was with the use of the word ‘unlimited’. It has said that if a plan is termed as unlimited, putting a fair usage or daily/monthly limit, would be misleading. However, three years since the original directive, telecom operators in India still use the term unlimited for plans that throttle user speeds post reaching a certain limit or charge them extra for full speeds. Here is a breakdown of what various major telecom operators and ISPs offer in terms of 3G data, dongle data consumption and wired broadband connections:

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3G mobile data: When it comes to advertising unlimited 3G mobile data, Vodafone possibly has the worst policies of all. The company displays 5 levels of unlimited coming in 3GB, 4GB, 6GB, 10GB and 12GB variants, without even mentioning that these are FUP limits or what a user gets after the said limit. Similarly Idea, Reliance and BSNL also impose FUP limits on unlimited plans. In fact, from the looks of it, Idea charges its customers the default tariff of 4p/10KB after hitting the data caps. Docomo, Airtel and MTNL steer clear of offering any 3G unlimited plans


Dongle data plans: Dongles, which are also covered by TRAI’s directive, paint a similar picture. Idea, Docomo, Vodafone, Airtel and Reliance offer unlimited 3G plans but assign data limits beyond which speeds are throttled. Docomo throttles its customers severely to 64Kbps and later to 8Kbps, while Idea and Vodafone do not even bother to make it obvious what penalty an unlimited plan user will face on crossing data limits.


Broadband plans: Broadband is an important, and for heavy data users the only practical way, to access the internet. Even here, ISPs impose data caps on unlimited plans. Hathway for example offers four unlimited plans of 50Mbps with varying data caps and prices, post which the connection slows down to 1Mbps.


The worst amongst broadband ISPs has to be the state controlled telco BSNL. The company offers pretty expensive plans with low data caps, post which it throttles user speed to a crawl. For example it offers a 1Mbps plan upto 6GB ‘unlimited’ for Rs 800 per month, with speeds 512 kbps beyond the limit. MTNL might have cheaper plans, but the telco also calls its data capped plans unlimited, even offering users a choice to buy more GB for ‘unlimited’ plans.

Other broadband ISPs like Airtel, ACT and Tikona do not offer unlimited plans, and some like You Broadband clearly mark FUP plans as dual speed plans, while offering separate unlimited plans.

Note that we have not compared all the plans by all operators in all regions. Most operators offer far more plans that differ in each circle, than we have been able to add to the table.

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Our take: Despite laying out its rules in 2012, it looks like the TRAI has either been unwilling, or unable to stop telecom operators from falsely advertising plans as unlimited plans, when they aren’t really unlimited at advertised speeds. We wonder if the TRAI will ever get serious about implementing its policies and stop such practices.

The condition of internet access in India is already pretty abysmal. Last week, Akamai’s report on the internet speeds from around the world ranked India a lowly 115th internationally in terms of average internet speeds. The National Optic Fibre Network (NOFN), which got an approval of Rs 20,000 crore in 2011 to provide provide broadband services across 2.5 lakh Gram Panchayats and 631 districts by 2014, only just rolled out in its first district in January this year. This was after the government halved its target for broadband coverage for 2014-15 to 50,000 villages by the end of 2015.

Note that DeitY (Department of Electronics and Information Technology) had received an approval from the cabinet in August for its Digital India programme. The programme plans to bring broadband to 2.5 lakh villages, 400,000 public internet access points, Wi-Fi in 2.5 lakh schools and universities along with public wi-fi hotspots for citizens among other things. The agency claimed the program would create 1.7 crore direct jobs and more than 8.5 crore jobs indirectly. However, for such grand schemes to come to fruition, the government needs to step up and not only make proactive policies, but also make sure to implement them.

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