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Net neutrality gets a boost as TRAI disallows differential pricing of data services

MUMBAI: It is a victory for all those who had batted for net neutrality, including television broadcasters like Star, Zee and Sony who have their own over-the-top (OTT) services.

In fact, broadcasters had vehemently opposed the implementation of differential tariff of data services by telcos contending that it would encourage the concept of carriage fee, which is a widespread practice in cable TV.

In a major boost to net neutrality and open internet, the Telecom Regulatory Authority of India (TRAI) has issued the ‘Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016’ that disallows service providers from offering or charging discriminatory tariffs for data services on the basis of content being accessed by a consumer.

TRAI’s regulations are a blow to zero-rated programmes like Facebook’s Free Basics and Airtel Zero, which offer free internet in lieu of restricted access to apps and services. In zero-rated programmes, users will only have access to apps and services that are provided by the service provider. This, experts say, is against the principle of free internet.

As per the regulations, no service provider can offer or charge discriminatory tariffs for data services on the basis of content. It also bars service providers from entering into any arrangement, agreement or contract, by whatever name, with any person, natural or legal, which has the effect of discriminatory tariffs for data services being offered or charged by the service provider for the purpose of evading the prohibition in these regulations.

However, reduced tariff for accessing or providing emergency services at times of public emergency has been permitted provided such tariff is reported to the authority within seven working days from the date of implementation of the reduced tariff. The decision of the authority as to whether such reduced tariff qualifies under these regulations shall be final and binding.

TRAI has imposed financial disincentives for contravention of the regulations. The service provider has to pay Rs 50,000 for each day of contravention. The fine can go up to Rs 50 lakh (Rs 5 million).

The amount payable by way of financial disincentive will have to be remitted to such head of account as may be specified by the authority.

TRAI will impose financial disincentive only after providing a reasonable opportunity to the erring service provider of representing against the contravention of the regulations.

It will keep a close watch on the implementation of the mandate by the service providers and may undertake a review after two years or at an earlier date.

TRAI had earlier issued a consultation paper on ‘Differential Pricing for Data Services’ in December 2015.

This consultation primarily sought the views of the stakeholders on whether service providers should be allowed to charge differential tariffs based on the websites/applications/platforms being accessed on the internet.

Based on the responses received and internal deliberations, the authority has now issued these regulations that aim to ensure that consumers get an unhindered and non-discriminatory access to the internet.

An overwhelming number of detailed and well-reasoned responses, representing a diverse set of views, were received in the consultation process. The views suggested both in favour of and against ex ante steps for regulating differential tariff for data services based on content.

After careful examination of all the comments and feedback, the authority has decided that ex ante regulation, rather than a case-by-case tariff intervention regime, would be more appropriate as it would give certainty to industry participants.

Such a step is also warranted in view of the high costs of regulation in terms of time and resources required for investigating each case of tariff discrimination, the authority stated.

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