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Differential pricing of data services by telcos is similar to carriage fees charged by MSOs: Sony

MUMBAI: After Star India, it is Sony Pictures Networks’ turn to train guns at the differential pricing of data services by telecom service providers (TSPs).

Responding to the Telecom Regulatory Authority of India’s (TRAI) consultation paper on ‘Differential Pricing for Data Services’, Sony has submitted that differential pricing of data services will replicate the carriage fee phenomenon that ails the cable TV ecosystem. Star had also made a similar argument in its submission to TRAI.

Currently, MSOs prioritise content on their platform based on carriage and placement fees being paid by content owners.

This anti-competitive behaviour by MSOs has hit small content providers the most as carriage and placement fees act as entry barriers for new content providers, Sony said in its submission to TRAI.

Differential pricing with regard to data would inevitably create the same concerns as in the MSO and content space, it added.

The broadcast network further submitted that differential pricing is a discriminatory regime of charging different consumers different prices for the same product or services, and is antithetical to the fundamental rationale of openness and equality.

It also contended that differential pricing leads to restriction of access to information. It enables TSPs to play the role of gate-keepers, where they are in a position to differentiate between data packets.

Allowing TSPs to charge differently for different uses of data would essentially create a tariff regime where TSPs would have the right to create different classes of subscribers based on the kind of content they want to access and determine different prices for different websites, applications and platforms, it noted.

Differential pricing would also end up distorting and altering the primary role of TSPs by allowing them to fundamentally alter the nature of competition between these websites, applications and platforms in a manner not linked to the quality of the services they deliver to consumers, but on the business arrangement between TSPs and websites, applications, platforms.

It would also give rise to increasing market entry costs for non-participating entities, using dominance in the market to abuse the same through service tie-ups and predatory pricing.

Alluding to Facebook’s tie-up with Reliance Communications for proving free internet, the broadcaster contended that such service tie-ups and predatory pricing would ensure that there is an increase in market entry cost for non-participating entities.

It also submitted that TRAI should seek the opinion of the Competition Commission of India (CCI) to understand the anti-competitive effects of the differential price regime.

It pointed out that differential pricing as a model has been banned in countries such as Japan, Chile, Norway, the Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania and Malta.

SPN suggested that subsidised time-based models, public or community networks are some of the other routes available to expand access to the internet. Additionally, local data centre requirements could also reduce costs of accessing the internet.

The broadcaster noted that the consultation paper is silent on big data, a broad term that is generally used to refer to the use of predictive analytics or certain other advanced methods to extract value from data.

Since TSPs in the differential pricing regime would be acting as gatekeepers to certain packets of data, based on their business arrangement, they would also tend to obtain sensitive information of consumers such as their data usage patterns, Sony submitted.

It further stated that such data patterns in addition to raising issues of privacy would effectively make it easier for sellers to identify new customer segments and target those segments with customised marketing and pricing plans.

Additionally, the increased availability of behavioural data would encourage a shift from demographic categories to personalised pricing. While such a personalised pricing regime may present several practical challenges, it may become an offshoot of any differential price regime.

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