In Business Model, Internet Access, Mobile, News

In a move that comes as no surprise, the Telecom Regulatory Authority of India has ruled that programs such as Facebook’s “Free Basics” are covered by rules related to non-discriminatory telecom service tariffs, and has banned such offers.

For that reason, TRAI has banned such programs in India. Simply put, Internet service providers cannot offer free access to packages of applications curated by the ISP.

Having done so, TRAI has framed this aspect of the network neutrality decision as a matter of common carrier tariffs, rather than as a matter of content freedom. As often is the case, regulators have had to choose between different “good” things. 

Zero rating, TRAI notes, can allow more people–especially those with low income–access to at least some valuable services. Banning zero rating means one tool for instantly exposing more low-income people to the Internet is outlawed.

On the other hand, TRAI believes, one less barrier is created for innovation, and a more level playing field for app providers is encouraged.

The new ruling 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 to the consumer on the basis of content.”

As has been the case elsewhere, though, a distinction is made between managed services and “Internet” apps. “This regulation shall not apply to tariffs for data services over closed electronic communications networks,” the decision states.

As has been the case in other countries, Indian regulators say they have concerns about the impact of such “no charge” access to some applications as a tariff fairness issue.

In essence, the argument is that programs such as Free Basics create favored packages of content assets. In other settings, as TRAI essentially notes, that would not be an issue. TV broadcasters, radio broadcasters and others have editorial discretion where it comes to the content they wish to broadcast or publish.

In this case, TRAI essentially deems the “level playing field” more important than other values, including the obvious benefit of allowing more people of low income to use mobile Internet apps.

At least in part, the decision to use a common carrier framework is as troublesome in India as it has been in other markets, such as the United States.

In part are differing notions of what regulatory framework ought to apply, what app “fairness” means, and whether, in fact, “equal treatment” of bits is possible, as a technical matter, whatever the policy considerations.

Broadly speaking, several common models are possible, assuming one agrees that markets should generally be allowed to operate. At opposite ends of the regulatory spectrum are “freedom” and (for lack of a better word) “captivity.”

At one end, actors are free to buy and sell; speak, write or proclaim without interference (some will not appreciate the intrinsic connection between commercial freedom and political freedom, but that is another discussion). At the other end, rights are restricted.

The growing problem, in an Internet age, is the discontinuity between older frameworks and newer frameworks. In the past, some actors were mostly free; others mostly regulated. So long as clear boundaries between industries and actors exists, that has worked.

What does not work are scenarios where boundaries are erased, but legacy frameworks continue to restrict action and freedom. In other words, like actors and like products should be treated the same.

Arguably, freedom should be the framework, not “unfreedom,” when competitors are free to supply consumer wants.

The other imponderable is “for whom” freedom exists. Even if one agrees that “freedom of speech, thought, religion” should hold, “for whom” is the right to be protected–the speaker or the listener?

It is not easy to resolve.

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