Net Neutrality: India protects innovation, consumers

18-Feb-2016 #Digital India Source: India Inc

The decision of the Telecom Regulatory Authority of India (TRAI) to bar telecom companies from offering discriminatory, differential or preferential pricing and access to some has been widely, and rightly, hailed as upholding the principle of Net neutrality.

What is Net neutrality?

Imagine a massive library offering all kinds reading material (content). It has millions of members and charges a nominal entry fee, say $1, for entry and offers everyone equal access to every single book in its collection. Now, a publishing company, say Company X, keen to popularise its own titles, offers to pay the library that $1 entry fee on behalf of every member. But it has a condition: the library has to ensure that these members are given access only to its own titles and not those from any other publisher. Members wishing to read titles from other publishers will, however, have to pay the $1 entry fee.

What do you think will happen? Many people might avail of Company X’s offer and become over time its captive customers. Publishers that don’t or can’t pay for the entry of members will lose out.

And who do you think will benefit from this? Only deep pocketed publishers who can pay for the entry of members. New, small publishers who may have great books to offer will lose out and, conceivably, lose out on the chance to grow.

And who will lose out? Apart from small and independent publishers, even the members who avail of Publisher X’s exclusive offer will lose out as they will not get access to the millions of other titles available in the library.

Now, replace the library with the internet, Publisher X with Facebook’s Free Basics or Airtel’s Zero Rating Plan, or any other such preferential access plan and the members with subscribers and you get to the crux of the debate on Net neutrality.

“No service provider shall offer or charge discriminatory tariffs for data services on the basis of content. Further, no service provider shall enter into any arrangement, agreement… that has the effect of discriminatory tariffs for data services being offered or charged to the consumer on the basis of content,” a TRAI statement said.

As a result of the TRAI norms, subscribers will get equal access to all content and every website on the Net, thus, providing a level playing field to established as well as new players who dream of becoming the unicorns and more of tomorrow.

Who will be affected?

Telecom companies, which would have earned additional revenues via deals with content providers and particular websites, will lose out. For example, leading e-commerce companies could have tied up with telecom companies to make access to its websites free for surfers/customers.

But this would have created a new aristocracy of internet haves and internet have nots. Leading commerce and other companies would have used their deep pockets to drive Net traffic to their sites. New companies and internet wannabes, which could well become the winners of tomorrow, would have lost out.

Then, many telcos offer Whatsapp only or Twitter only or Facebook only, etc. packages or a combination of these at very attractive prices. These are often bundled with other offers that offer preferential or free access to other websites. These can no longer be offered. Telcos that have such plans have been given six months to wind up these plans.

What does this mean?

Telcos and other internet service providers can only offer subscribers data packs that offer a given number of megabytes or gigabytes in return for a pre-agreed service fee.

TRAI says: “No service provider shall enter into any arrangement, agreement or contract, by whatever name called, with any person, natural or legal, that 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 this regulation.”


Telcos can still offer preferential or cheaper access and tariffs in case of emergency services in times of public emergency. Telcos will have to inform the regulator of such concessions within seven days.

This means that in situations like the recent floods in Chennai or other natural calamities or other emergencies, telcos can offer free/preferential access to some or all its internet services.

What next?

Telcos and some deep pocketed internet companies are unhappy with TRAI’s Net neutrality rules. They are expected to seek judicial review of the new norms.

by Arnab Mitra

Arnab Mitra is a Consulting editor, India Inc. He writes on business and politics.

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