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The Internet and Mobile Association of India (IAMAI), and industry body which represents some of the largest Internet companies in India, submitted a response to the Department of Telecom committee’s paper on Net Neutrality, this time, “clearly and unambiguously” opposing “zero-rated plans of any type.”

The submission, a copy of which is with MediaNama, clearly takes a stand against Zero Rating, though it is a rather short statement (127 words):

4. Zero Rating

IAMAI does not support any plans that violate the principles of net neutrality, especially, paid or unpaid prioritisation or other discriminatory practices. These plans will ultimately harm Internet content and service providers by limiting competition among them, and, by extension, limit consumers’ choice. Such plans will allow the operators, if given control of which apps/services to push to consumers, to discriminate and privilege certain web services over others, and throttle innovation. This will tantamount to illegitimate network management techniques and discrimination that will lead to fragmentation of the Internet.

The Committee’s present proposal for regulatory compliance on the Zero Rating services will not be adequate to examine or scrutinize any violations of such plans and is likely to allow contraventions through back door entry.

This stand has been taken despite strong opposition from Facebook and Google (and confusion from STAR India), and is completely opposite to the stand that the IAMAI had suggested in the 9th August 2015 draft of its response.

That response, around one and a half pages (715 words, over 5 times longer than the anti-Zero Rating stand finally taken) then in draft stage, appeared to us as if it had been drafted by Facebook. Note that neither Facebook nor the IAMAI have confirmed or denied this after we mailed them for a clarification last week, and Google hasn’t responded to queries on whether they support this point of view. The 9th August draft version (with Facebook-friendly parts in bold highlighted by MediaNama):

3. Zero Rating

The Committee has observed that “content and application providers cannot be permitted to act as gatekeepers and use network operations to extract value, even if it is for an ostensible public purpose”. The association feels that to term just the OTTs as gatekeepers is unfair. Violation of Net Neutrality should treat every industry with equal justification and rules. In a recent interview V Umashankar, a member of the committee’s panel, has criticized Bharti Airtel’s ‘Zero’ plan as a complete violation of the principles of net neutrality. But the report seems to have favoured Airtel’s Zero Rating plans as it makes no direct mention of Airtel Zero and its deals. The report has criticized just the internet.org by calling it as a gatekeeping activity. Moreover we believe that such a view grossly mischaracterizes “zero rating” and other emerging business models, zero rating is not gatekeeping. Zero rating programs and other similar business models do not involve “gatekeeping”. They are simply platforms that give people access to basic online services for free. There are many different zero rating models, and the Committee’s recommendations run the risk of casting aside new business models that have the potential to help achieve the connectivity goals outlined in national policies such as the National Telecom Policy 2012.

Zero Rating Encourages access to the Broader Internet

Reducing data rates for particular applications, such as through flat rating or zero rating agreements, can help increase access to information. Because of the high data costs in India, many users either don’t use the web-surfing options on their phones or have data service completely turned off. While data on the actual impact of these plans is limited, early data suggests that these programs can be an ‘on ramp’ to full Internet access; people whose first data use is a free, zero-rated offering are more likely to buy a data plan for full Internet access. Companies and organizations have been experimenting with plans of this sort for years in many markets, including India.

Some have raised concerns that these arrangements could have negative impacts and the committee has recommended for evaluation on a case-by-case basis. Generally, such an approach is sensible. A pre-emptive ban on reducing data charges for specific apps or sites would be premature; instead, it’s important to collect more data to understand the actual consumer impacts of these arrangements.

However, analysis of these arrangements should not presume that there is consumer harm due to content providers acting as gatekeepers. In this context, it is important to distinguish reducing data rates with paid prioritization. When you move one data packet to the front of the queue that means you’re moving someone else’s packet further back in the queue. But when access to particular site is provided for free, that doesn’t make anyone else’s data cost more.

Zero Ratings should come under CCI evaluation

Zero rating is a commercial arrangement and commercial arrangements come under anti-competitive laws and should be taken care of under the same. So “zero rating” can be kept out of the purview of TRAI.

Additionally, the report proposes TRAI for an ex-ante determination of tariff plans where a licensee has to file the tariff plan with the regulator prior to the launch. TRAI would examine each such tariff filing carefully to see if it conforms to the principles of net neutrality and that it is not anti-competitive or distorting the consumer markets. The complaints will be looked into and penalties will be levied if there is a violation. We note that TRAI has currently placed its tariff-setting powers under “regulatory forbearance”, on the ground that the telecommunications market is mature enough in India for the market to set tariffs by itself, with minimal regulatory oversight. In order to implement the committee’s recommendations, the policy of forbearance will have to be unwound for all types of telecommunication services. This is contrary to TRAI’s established policy regarding the need for tariff regulation in India. Additionally, we note that, if implemented, TRAI would examine tariff filings against “principles of Net Neutrality set forth in guidelines issued by the government as Licensor”. This is a highly subjective standard that is likely to be applied by TRAI in an unpredictable and inconsistent manner, which would ultimately harm service providers and, by extension, consumers.

In particular, note the usage of the phrase “on ramp”, and the fact that it indicates that Zero Rating can be about giving access to “basic online services for free”. Maybe it’s just a co-incidence, or maybe it isn’t, but here’s Mark Zuckerberg referring to Internet.org as an “on ramp” (this too). Oh, and in this piece in the Hindustan Times by Zuckerberg, he mentions Internet.org as being about basic services.

On Facebook’s conflict of interest at IAMAI 

Note that Facebook now chairs the government relations committee at the IAMAI (neither Facebook nor IAMAI have confirmed this to us, but other members have), from April this year to April next year. In case of an IAMAI submission on Net Neutrality, Facebook has a clear conflict of interest since it has a zero rated service live in India, though this submission has gone through despite several attempts from Facebook and Google to stop the IAMAI from taking a stand that is against content platforms providing Zero Rating.

Why was the IAMAI considering a push to the CCI?

So, the 9th August draft from the IAMAI wasn’t only just trying to say that Zero Rating is a good thing, and it doesn’t involve gatekeeping. The draft was also trying to move Zero Rating out of the purview of the TRAI, and push it to the Competition Commission of India, where, such an investigation might take a few more years, thereby allowing Zero Rating to continue for a few more years. Note that a CCI investigation against Google has taken more than 3 years. The fines and the penalties put by the CCI are limited, and they need evidence of market failure and damage by anti-competitive practices. How will they ever identify damage via gatekeeping from Facebook or Airtel, if this did indeed go to the CCI?

Disclosures: 

– MediaNama has taken a strong position in favor of Net Neutrality and against Zero Rating at TRAI, DoT and the Parliamentary Standing Committee on IT, where we have submitted our view point, and/or deposed.
– I’m a volunteer with the Savetheinternet.in campaign for Net Neutrality and Internet Freedom in India.