Telecom Regulatory Authority of India today ruled against differential pricing for Internet services, in a setback to Facebook Inc's plan to roll out free Internet to the masses in Asia's third-largest economy. move is a big blow to Facebook's highly-controversial 'Free Basics' platform and Airtel's zero-rated platform 'Airtel Zero'.
Trai said that Internet service providers would not be allowed to discriminate on pricing of data access for different Web services.
Facebook's Free Basics plan, launched in around three dozen developing countries, offers pared-down web services on mobile phones, along with access to Facebook's own social network and messaging services, without charge.
Trai said that no service provider shall enter into any arrangement, agreement or contract,that has effect of discriminatory tariffs for data services being offered on basis of content. This in effect disallows subsidised data packages that offer access to only a select services, such as Whatsapp or Twitter, packages which are currently offered by various telcos to attract subscribers.
However, the regulation will not apply to tariffs for data services over closed communication networks, unless tariffs offered evade prohibition of this regulation.
"Only exemption - tariffs may be reduced for accessing emergency services or at times of public emergency," Trai said, adding that in such a case, tariff should be reported to Trai within seven working days from date of implementation of the order.
Trai added that a penalty of Rs 50,000 a day, capped at Rs 50 lakh, will be levied on service providers violating the rule and the authority may review these regulations after two years from the day the rules come into effect.
Trai also gave service providers six months to comply with the new rules.The regulator's order is in the form of a regulation which does not need to be cleared by the government.
The decision by Trai deals to a huge blow to telcos which have backed differential pricing of data services and social networking giant Facebook which had left no stone unturned in backing and promoting its Free Basics products through print and TV advertorials.
The US company says Free Basics will allow millions of Indians, especially in rural areas, access the web for free but critics say it will only allow access to select sites and therefore is against the concept of net neutrality.
Trai had previously directed Anil Ambani-owned Reliance Communications, which is Facebook's only distributor of Free Basics in India, not to offer the product on a commercial basis in the country.
Airtel, India's No. 1 telco, had also attempted to launch a zero-rated product Airtel Zero in April 2015, but had put it on the backburner after facing a severe backlash on social and other media from the supporters of net neutrality.
Critics say the move by Facebook and Airtel was aimed at creating two types of Internet free and paid and goes against the principle of net neutrality, which envisages that service providers will treat all data on the Internet equally. In the case of Airtel Zero, the telco offers preferential access to customers for some apps free of charge and not to all apps. In effect, the app maker will pay for the customer's free usage to the operator, while those who can't afford to pay won't get preferential access. Airtel had said its latest offer isn't biased for or against anyone.
The controversy over Airtel Zero and net neutrality had died down over months but was once again triggered after Trai on December 9released a consultation paper on differential pricing of data services. It had previous run a consultation process on the need for a regulatory framework for over-the-top (OTT) services in March-April 2015 but its recommendations are still pending in this.
Facebook though has been engaged in a war of words with Trai over responses made through the social networks' platform to the consultation paper on differential pricing of data services.
What appears to have gone wrong for Facebook is the manner in which it aggressively responded to the consultation process.
On December 9, Facebook started a mass campaign on its platform asking users to support Free Basics and urged them to email Trai declaring their support of "digital equality". Free Basics was sought to be conflated with digital equality, with Facebook pitching the product as a solution to connect the unconnected billions.
The social media giant was warned by the telecom regulator to not try and turn a 'consultation process' into an opinion poll.
It had called Facebook's Save Free Basics campaign a "crudely majoritarian and orchestrated opinion poll". It also pulled up Facebook for the responses, which the regulator said didn't address any of the questions posed in the consultation paper.
On January 1, Trai asked the company to alert its users to send revised responses to the questions on the consultation paper as a vote for Free Basics did not hold up as a valid response.
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