TRAI (Telecom Regulatory Authority of India) has prohibited discriminatory pricing of data.

The new directions will be a major victory for supporters of Net Neutrality in India.

“Keeping in view India’s large number of internet users and content producers, the Authority has taken a view that prohibition of discriminatory tariff for data services is necessary to ensure that service providers continue to fulfill their obligations in keeping the internet open and non-discriminatory,” said TRAI in a statement on Monday.

Differential data pricing or zero-rating will be crucial to the issue of Net neutrality.

TRAI has called for a fine of Rs 50,000 per day for each act of contravention, subject to a cap of Rs 50 lakh.

MAJOR IMPACT

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“Differential pricing for different level of services is a well-accepted principle across all Industries from energy, railways, airlines, buses, highways (tolls), etc. The concept of differential pricing inherently recognizes the economic principle of paying differently for different levels of service and experience,” said Hemant Joshi, partner, Deloitte Haskins & Sells.

Software Freedom Law Centre India said: “Differential pricing runs counter to this fundamental premise, which has had no small role to play in the Internet’s explosive growth. In this context, TRAI’s latest Regulations are a big step in the right direction, and secure India a position amongst the select few nations to have accorded legislative respect for the principle of network neutrality.”

WHAT TRAI SAID

In the telecom sector there are virtual highways that need to follow the same principle. EU is considering allowing “specialized services” with few priority services having fast lane internet connection.

“More awareness and education is needed around the economics of differential pricing and its long term implications on the Industry and the consumer,” said Hemant Joshi.

TRAI — headed by Chairman RS Sharma — said that the new guidelines will come into effect immediately. “No new launches of prohibited packs, plans or vouchers shall be permitted. Presently, different types of vouchers as specified in TePR, 2012 are offered to pre-paid consumers,” said TRAI.

In addition, data tariffs are offered to post-paid consumers either as part of a plan or by way of add-on packs.

TRAI said it is aware that there would be some such packs, plans and vouchers already subscribed and paid for by the consumer, the validity of which is specified and at present unexpired. The rationale for the savings provided in the regulations is to protect consumers who have spent money and bought these offerings.

TRAI said no new offerings of this nature shall come within the purview of such savings. Further, no plan, pack or voucher already subscribed by a pre-paid or post-paid consumer providing differential data tariff based on content, shall be in operation beyond a period of six months from the date of these regulations coming into effect. This provision has been made in the light of the tariff protection available to the existing consumers as per ITO.

Differential tariffs being offered for data transmitted over closed electronic communications networks, such as intranets are not prohibited by these regulations. Though the prohibition on discriminatory pricing of data services does not apply to such networks, which are not accessing the internet, if such a closed network is used for the purpose of evading these regulations, the prohibition will nonetheless apply.

While certain jurisdictions such as the United States and the European Union have adopted variations of the case- by-case approach, several others such as the Netherlands and Chile have barred differential pricing outright. A study of the international experience is no doubt useful in formulating an informed strategy. However, each country has devised its own suitable regulatory strategy on the subject.

Telecoms are prohibited from entering into arrangements that have the same effect as charging discriminatory tariffs on the basis of content. Thus, an arrangement by which, instead of a service provider differentially charging tariffs to the consumer, other arrangements are made by the TSPs which in effect make accessing some content cheaper, for example through a refund to the consumer or other methods, are likewise barred.