India bans Facebook’s Free Basics, Airtel Zero

In a move seen as an endorsement of net neutrality and a setback to offerings such as Facebook's Free Basics and Airtel Zero, India's telecom watchdog has said no to discriminatory pricing of data content.

"No service provider shall offer or charge discriminatory tariffs for data services on the basis of content," the Telecom Regulatory Authority of India (TRAI) said in a regulatory order on Monday.

"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 to the consumer on the basis of content," the watchdog said.

Facebook said it was "disappointed with the outcome", but will continue its "efforts to eliminate barriers and give the unconnected an easier path to the Internet".

Addressing a news conference after calling for the order to be published in the official Gazette, the watchdog chairman RS Sharma said the basic premise based on which the new norm has been notified is to make the Internet available to a large number of people.

Sharma also sought to make a difference between the term "differential pricing" or "zero rating" that is normally used vis-a-vis "discriminatory pricing".

"We have used the term discriminatory pricing. Essentially, we are saying that the Internet pipe should be agnostic to packets," he said.

"We have also kept a provision for exceptions in grave emergencies. We have also made exceptions in the case of closed networks, which are not Internet. Anything on the Internet cannot be differentially priced. That is the broad point we have made."

A Facebook spokesperson said: "Our goal with Free Basics is to bring more people online with an open, non-exclusive and free platform. While disappointed with the outcome, we will continue our efforts to eliminate barriers and give the unconnected an easier path to the Internet and the opportunities it brings."

But the Internet and Mobile Association of India (IAMAI) welcomed the watchdog's move, saying: "In a very clear and transparent ruling, TRAI has explicitly said 'no service provider shall offer or charge discriminatory tariffs for data services on the basis of content'. This move will ensure that the basic tenets of Net Neutrality are followed in India."

Crucial to the issue of Net Neutrality, differential pricing or zero-rating is a practice where Internet service providers do not take into account the content downloaded by subscribers from some platforms while computing their usage tariff. These become free or differentially priced.

Those batting for Net Neutrality want a uniformity in such tariff. But those on the other side of the debate feel this may be impossible because service providers have to invest huge amounts of money on infrastructure and different bandwidths call for different level of investments.

This appears to have been addressed by the watchdog.