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NASSCOM says differential pricing for services in public interest should be allowed

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Industry body National Association of Software and Services Companies (NASSCOM) has said that certain classes or types of services in public interest should be allowed differential pricing provided that they obtain mandatory prior approvals and that they are in accordance with the principle of Net Neutrality.

“The regulator should have the power to allow differential pricing for certain types/ classes of services that are deemed to be in public interest and based on mandatory prior approvals. Any such programs should abide by the principles of net neutrality and not constrain innovation in any way,” NASSCOM president R Chandrashekhar said in a statement.

NASSCOM also said that any differential pricing programs telecom operators and their partners should have explicit directives approval of the regulator. “The onus of proving the larger public good arising out of such proposals should be on the TSP and its partners. Such proposals should be subject to a wider public consultation by the regulator before arriving at a final decision,” NASSCOM added.

The industry body also proposed establising an independent not-for-profit entity with an independent board which would own and manage proposed differential pricing programs that are deemed to be in the public interest and are philanthropic in nature.

TRAI’s consultation papers: Earlier in December, the TRAI issued another consultation paper on net neutrality, asking whether telecom operators should be allowed to charge differently for different websites, focused purely on the price discrimination aspect. This was a follow up to a consultation paper it put out in May this year.

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On a similar note, the Parliamentary Standing Committee on IT for 2015-16 is looking intotopics like digital privacy, challenges faced by startups, Internet and e-fraud and net neutrality.

Zero Rating violates net neutrality: In July, the government appointed committee on net neutrality stated that Internet.org violated net neutrality. However, the Department of Telecom (DoT) committee stated that zero rated platforms would only be allowed if the platforms offered the same terms and conditions for entry to all content providers and websites. This basically meant that content providers would still be able to sign up for zero rating, but would need to be treated equally on the platform. More on that here.

MediaNama’s take

NASSCOM’s suggestions for differential pricing are warped at best. Its intentions seems good enough but the practical applications will be terrible. First, it is allowing private companies to dictate what services are in “public interest”. Messaging is an integral part of the Internet experience and if telecom companies are allowed to say what is in “public interest”, they would favour their own messaging services rather than popular ones.

Secondly, it also recommends differential pricing for an entire class or type of service. Video on the Internet has emerged as an effective means of communication on the Internet which can cut across language barriers. Would telecom operators allows zero-rating of all video services? What happens when a video from a zero rated service is embedded in a site which is not on the service? Would consumers be still charged for watching the same? The web is deeply interconnected and differential pricing for any service fractures net neutrality.

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