My responses for TRAI's consultation paper on Differential Pricing for Data Services

1) Should the TSPs be allowed to have differential pricing for data usage for accessing different web sites, applications or platforms?

Ans: It should be permissible for TSPs to have differential pricing for certain websites. However, the criteria should be strictly defined and governed for such services. I am elaborating my criterion in answer to question#2.


2: If differential pricing for data usage is permitted, what measures should be adopted to ensure that the principles of non-discrimination, transparency, affordable internet access, competition and market entry and innovation are addressed?

Ans: Differential pricing should be treated very carefully because it has the ability to impinge on Net Neutrality. If TSPs want to offer differential pricing, the below constraints should be placed on them.

• TSPs and their partners in differential pricing (i.e. website owners/content providers) should commit to provide differential pricing as a CSR activity (Corporate Social Responsibility) and not as a profit making initiative.
• This is easiest to implement by making it a binding law on the TSPs. If any partner (website) is found to be violating this tenet, TSPs should remove them from differential pricing platform.
• This is similar to ISO 14000 certification which requires the certifying organisation to ensure their supply chains are environmentally friendly as well.
• TSPs must commit to Net Neutrality. All data packets must be treated the same.
• There should only be two price rates. One for differentially priced platforms and one for all other traffic. In other words, Websites/content with differential pricing must all belong to a single price rate. All other traffic should be charged at another price rate.
• Both these price rates should be clearly called out by the TSPs on their brochures and other customer facing information.
• Telephony Consumers must have an option to opt-in/out of differential pricing.
• The Service Providers and/or websites should not be permitted to alter/modify the traffic/website content. Irrespective of consumer opting-in/out of differential pricing, same content should be served to both of them.
• The privacy of the consumer must be protected at any cost. TSP should not share any detail regarding consumer (Neither demographics nor opt-in/out choice) with the content provider. In other words, the website owner should not have any information regarding the telephony consumer.

The result of the above constraints is that providing free data services shall become become a true CSR activity. If any loopholes are identified down the road which will enable any party in the chain to make profits out of differential pricing, such options should be plugged by making relevant changes to the law.

3: Are there alternative methods/technologies/business models, other than differentiated tariff plans, available to achieve the objective of providing free internet access to the consumers? If yes, please suggest/describe these methods/technologies/business models. Also, describe the potential benefits and disadvantages associated with such methods/technologies/business models?

Ans:A few models are being attempted around the world. All of them have their own benefits and drawbacks. Some models that I am aware of are as below

• Ad based model: I believe Firefox is experimenting this in Bangladesh. Consumers watch advertisements on the TSP's app. In return for the advertisements watched, TSPs shall provide data for the consumer. This becomes a quid-pro-quo situation benefitting both TSP and consumer. Net neutrality is achieved as well. By not permitting TSPs to share Personally Identifiable Information (PII) with advertisers, personalised advertising can be provided as well by TSPs thereby benefitting the advertisers as well. Opt-in/out is built into this solution. All round, this is the best solution in my opinion.
• PII Sharing option: This provides PII data to advertisers in return for free data to consumers. But this can lead to huge privacy issues. Opt-in/out shall alleviate the problem to some extent but still constitutes risks. For example, I might opt-in but if the other party is Opt-out, we shall have a conflict. This is a pandora's box.
• Free basics like option: This platform from Facebook might look good but, in my opinion, extremely anti-competitive. Internet offers an equal playing ground to both consumers and SMBs. Free basics, in my opinion, has the ability to destroy this fundamental freedom. I am listing this option just for sake of completeness. I do NOT recommend this option.

4: Is there any other issue that should be considered in the present consultation on differential pricing for data services?

Ans: I think we should consider the legal limitations as well. If we permit TSPs to offer a platform for differential pricing, all the entities in that agreement should be bound by Indian Law. With it's boundary-erasing nature, internet requires different handling. So, when differential pricing platforms are provided, entities in the value chain should agree to be bound to Indian Law. Else, an entity based out of India can escape legal penalties (for example: if they are found to violate any privacy or other tenets).