India Bans Zero Rating As The U.S. Pays The Price For Embracing It

Broadband

from the unlevel-playing-field dept

As expected, the Telecom Regulatory Authority of India (TRAI) has passed new net neutrality rules (pdf) that specifically ban the practice of zero rating. The rules are relatively clear in that they prevent either content companies or ISPs from striking deals that exempt select content from usage caps. The ruling acknowledges that such models create an unlevel playing field for smaller companies who may not be able to pay to play:

“…differential tariffs result in classification of subscribers based on the content they want to access (those who want to access non-participating content will be charged at a higher rate than those who want to access participating content). This may potentially go against the principle of non-discriminatory tariff. Secondly, differential tariffs arguably disadvantage small content providers who may not be able to participate in such schemes. This may thus, create entry barriers and non-level playing field for these players stifling innovation. In addition, TSPs may start promoting their own websites/apps/service platforms by giving lower rates for accessing them.

The ruling effectively bans Facebook’s “Free Basics” program, despite an immense amount of often misleading lobbying and marketing by the social networking company. Net neutrality advocates in India had argued that Free Basics — which exempts Facebook “curated” content from wireless usage caps — gave too much walled-garden power to the company, allowing it to corner India’s ad and content markets for years to come. Facebook, in contrast, argued it was being entirely altruistic, solely worried about India’s poor farmers.

In a statement on TRAI’s decision, Facebook reiterated that it was only trying to help:

“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.”

As it stands, companies that violate the rules need to pay 50,000 rupees per day ($740), up to a maximum of 5 million rupees (an inconsequential sum to carriers and Facebook alike). The rules will be in place for two years and could be open for review at that time. As such, Facebook could still lobby to have the restriction on zero rating weakened, or could modify its Free Basics program so that it better adheres to the rules. Or, better yet, as Mozilla had suggested if Facebook really wants to help it could take all of the marketing, PR, lobbying, and design money being spent on Free Basics, and actually spend it on improving India’s lagging telecom infrastructure.

India now joins The Netherlands, Japan, Chile and Slovenia in passing net neutrality rules that clearly prohibit zero rating. Contrast that to the rules here in the States, which don’t specifically forbid the practice, instead ambiguously stating that services will only be examined on a “case by case” basis. But the mere act of opening the door to the precedent of zero rating already has already resulted in companies like Comcast and Verizon abusing it, both of them now exempting their own services from usage caps, while still penalizing competing services like Netflix.

Filed Under: free basics, india, net neutrality, trai, zero rating
Companies: facebook