On December 19th, the Telecom Regulatory Authority of India (TRAI) released new recommendations on “Encouraging Data Usage in Rural Areas Through Provisioning of Free Data.” This is the latest salvo from the Indian regulator on what types of models for providing subsidized access to the internet should be permitted. While we have questions about how some of these recommendations will be implemented, we’re glad to see TRAI continuing to uphold the Data Services Regulation and interested to see how two new innovations in providing access envisioned in these recommendations will be developed.
In February 2016, in its landmark Data Services Regulation, TRAI ruled that differential pricing practices (including many zero rating models) were too harmful to consumers and competition to be allowed in the market. Yet, according to the latest figures from TRAI, only 376 million of India’s 1.25 billion strong population are connected to the internet, clearly much work remains in the shared challenge to bring everyone online. To that end, TRAI’s Free Data consultation this summer contemplated additional, alternative models that might help bring all of the internet to all Indians. These latest recommendations are based on the feedback from that consultation.
In many respects, TRAI’s guidance follows the recommendations that Mozilla and other partners made in our submissions. TRAI rightfully notes that: “Systems that make free data a feasible model for all content and ISPs, and available to the maximum addressable consumer market, are clearly the more desirable,” and adds: “any scheme for the provision of free data should meet certain basic criteria… that it should not be possible for a TSP/ISP to use discriminatory pricing of certain data content as a service differentiator.”
TRAI also struck down “toll free models” which would allow a content/edge provider to subsidize the cost of accessing their website/service, and which was on of the models considered in the Free Data consultation. TRAI argued, as Mozilla and others did in our submissions, that this model would entail the same discriminatory effects as zero rating/differential pricing.
TRAI’s recommendations also include discussion of two models for providing free data. In the first, free data will be provided by third party aggregators which are “TSP agnostic,” (i.e., the aggregator does not have a relationship with any individual telecommunications company). Notably, TRAI requires that the activities of the aggregators “should not be designed to circumvent the Prohibition of Discriminatory Tariffs for Data Services Regulations.” While it’s unclear how the aggregator model will work in practice, and what companies would have an incentive to offer such a service, this explicit prohibition on circumventing the ban on differential pricing should be a strong bulwark against harms to users and competition. Moreover, we’re generally supportive of additional competition in the market for internet access, which often helps to drive down prices and provide additional benefits for users.
In the second model, TRAI recommends the creation of a scheme to provide 100 MB a month to rural users for up to six months to be paid for by India’s Universal Service Obligation Fund. This is very similar to the Klif phone model Mozilla pioneered with Orange in several sub-Saharan Africa and Middle Eastern markets whereby the user gets unlimited voice, SMS, and 500 MB of data per month (for 3-6 months depending on the market). As we have long said, if the argument is that “if one gives users a taste of the internet then they will demand the full internet,” that taste should be of the full, open internet, not just some parts of it. Moreover, while 100MB may seem paltry, both generally and in comparison to our Klif offering, TRAI cites a Cisco study stating that the average Indian typically uses 150MB per month.
This scheme does, however, raise certain privacy and data protection concerns, especially as this benefit will likely be tied to Aadhaar, the Government of India’s national biometric identity database. We’re sympathetic to the need to prevent double dipping, but users should never have to choose between their privacy and access to the internet. These concerns point to the need for comprehensive privacy legislation in India, which, as we’ve argued before, we believe should be a national policy priority.
While questions remain about how both of these schemes will be implemented, if everyone in India and beyond is going to come online, then further innovations and new thinking will certainly be needed. To this end, Mozilla has been working through our Equal Rating Innovation Challenge to spur new innovation to provide affordable access and cultivate digital literacy. More information about the Challenge is available at: equalrating.com.