How TRAI regulations impact existing services such as Free Basics

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2016-02-09 21:57

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Edited by TheBeardo at 2016-02-09 19:30

TRAI’s announcements yesterday around banning differential tariffs for data services came as a huge victory for net neutrality supporters. From the time of the issue of theconsultation paper, TRAI made it clear that it was only addressing the issue of differential tariffs. While this doesn’t include all concerns around net neutrality, it is at its core. How adequate are the new regulations by TRAI in dealing with the issue of net neutrality? Here’s how websites, apps and services that were accused of violating net neutrality principles will be impacted by the Differential Tariff Regulations.
 


Key Regulations
Differential tariffs refers to the charging of different data rates by data service providers such as Airtel, Vodafone and Reliance Jio. The differentiation needs to be made based on the content accessed by the user. For example, a higher charge for accessing one website, and a lower charge for accessing another. The key regulations are:

No differential tariffs
Data service providers cannot charge differential tariffs on the basis of content. Differential tariffs with any other criteria isn’t governed by these regulations.

No indirect differential tariffs
The data service providers cannot enter into any arrangement which has the effect of differential tariffs – an indirect charging of different data rates.

Differential tariffs permitted on closed networks
Differential tariffs are permitted in a ‘closed electronic communications network’, such as intranet, or private networks. These networks do not use the global internet to function, and communication only happens between the members who have access to the network.

Lowered tariffs during emergencies
Lowered tariffs are permitted during emergency situations like natural or manmade disasters.

Facebook’s Free Basics
While Facebook’s Free Basics had already been suspended by TRAI, it is now completely prohibited by the Differential Tariff Regulations. Free Basics involves the partnering with certain data service providers, and offering a select group of websites and apps to that data service provider’s customers free of charge. This has the direct effect of accessing those select websites and apps without paying any data rates, while having to pay for accessing other websites and apps. This is a clear example of different data rates on the basis of the content accessed.
Airtel Zero
Airtel Zero is an open marketing platform, where customers can access certain mobile apps which are signed up with it. For these specific apps, the app providers will pay the data charges to Airtel for the use of their apps, and not the customers. The customers will therefore have free access to these apps. This is an example of an indirect charging of different rates. The arrangement between Airtel Zero and the app providers results in a differential tariff being charged to the customer for using those apps, which makes Airtel Zero illegal.

Aircel’s Free Facebook and Whatsapp
Aircel’s free Facebook and Whatsapp offer, which allowed subsidised date rates for accessing Facebook and Whatsapp, directly violates these regulations. Another offer made at the same time was giving customers an additional 10 MB per day for their use of Facebook and Whatsapp. The Explanatory Memorandum attached with the Differential Tariff Regulations explains that such practices, for example, the offer of a refund, are also illegal. They, in effect, make the access of certain content cheaper. Such practices will also amount to an indirect charging of differential tariffs.

Aircel’s Free Basic Internet
Aircel came out with another offer in 2015, of Free Basic Internet, which involves theprovision of free internet, at a lower speed, for everyone. There is no restriction on which websites or apps are used by the people. Here, there is absolutely no difference in the data rates based on the content accessed, or on any other basis. The only difference arising is that some online activities such as video streaming and online gaming will not be possible because of the lower internet speeds. This offer will be legal.
The Explanatory Memorandum specifically mentions that it will not govern activities such as the provision of limited free data to access the entire internet. These are other forms of tariff differentiation, not based on content, and are outside the purview of the Differential Tariff Regulations.

Airtel Wynk
Airtel Wynk is Airtel’s in-house music app. While non Airtel users can also download this app, the subscr iption charge was waived for Airtel users. This waiver of the subscr iption charge by itself will not violate the Differential Pricing Regulations. This is because here, the difference in the price is based on the cellular network used by the user, and not the content, i.e., the app being used by him.
However, Airtel Wynk also allows Airtel users to access the music on the app at subsidized data rates. This subsidisation of data rates is in direct violation of the Differential Pricing Regulations, since an Airtel user will have to pay a lower charge for accessing Wynk, as opposed to other music apps.
If Airtel were to create a closed network, which allows only Airtel users to access the music through the Airtel network, and not using the internet, then such a system would be valid. However, if such a system is created specifically for the purpose of circumventing the Differential Tariff Regulations, it will not be legal.
Reliance Jio
Reliance Jio proposes to bundle bandwidth and talk-time, instead of separate data packs, as is the practice today. Under the scheme, users will pay a one-time monthly fee for all uses, including access to online content. Since there is no restriction on what content can be accessed by the Reliance Jio users, this is not violative of the Differential Tariff Regulations.
The Differential Tariff Regulations are quite comprehensive in their coverage of differential tariffs, and effectively wipe out all schemes that have been under the net neutrality scanner so far. As per the Regulations, no new schemes violative of the Regulations can be launched, and all existing schemes have to be phased out within 6 months.