Prohibition on Discriminatory Tariffs for Data Services

Introduction

Data services with discriminatory tariffs can discourage Internet users and affect the Constitutional Right to Freedom of Speech. Although, international norms on the subject differ from country to country, India is on debating platform to decide for itself till the regulations came. Some practices have come to the notice of the Telecom Regulatory Authority of India (“TRAI”) wherein differential tariffs has been levied based on content/application/website/platforms. Primarily, such practices are discriminatory and second were affecting transparency. Therefore, TRAI has ocme out with its regulations on February 8, 2016 Prohibition of Discriminatory Tariff for Data Service, Regulations 2016 (“Regulations”). These Regulations would come into effect immediately. From the date these packs become applicable, no new launches of prohibited packs or vouchers would be permitted. TRAI has power to notify the rates of service provider however the same has been left to the discretion of the service provider, however the tariff regime is required to follow broad regulatory principle, the same is duly kept under-sight by TRAI and these includes: non-discrimination, transparency, non-predatory, non-ambiguous, not anti-competitive, not misleading. The article is informatory for the viewers about the new Regulations.

A. Differential Tariffs

Differential Tariffs for data services as defined under the Regulations means charging of a different tariff by a service provider for data services based on content accessed, transmitted or received by the consumer. These differential tariffs have positive as well as negative impact. It may appear to make overall Internet access more affordable by reducing cost of certain types of content but by enabling fresh users to access part of the content. On the other hand, differential tariffs results in classification of subscribers based on the content they want to access therefore, it would levy higher tariff on non-participating users. One of the important economic concerns against the theory of differential tariffs was that value of Internet is a function of number of persons on it. Differential tariffs may reduce Internet effect. Price based content can make certain contents more attractive while modifying the online behavior of the customers. Moreover, the Constitution of India guarantees the freedom of speech under Article 19 (1)(a). Supreme Court in Secretary Ministry of Information & Broadcasting vs. Cricket Association of Bengal[1] allowing citizens to benefit of the plurality of views and range of opinions on all public issue is an essential component of freedom of speech. This includes right to express oneself and right to receive information as was observed by Supreme Court in Indian Express Newspaper (Bombay) Pvt. Ltd vs. Union of India[2]. Therefore, the medium like Internet should allow freedom of speech and access to plurality of diversity of views and opinions. Even in international jurisdictions, varied approach in this regard can be seen.

B. Highlights of the Regulations

  •  The Regulations provide differential tariff means charging of differential tariffs by service provider based on the content accessed, transmitted or received by the customer.
  • Under the Regulations, neither the Service Provider shall charge differential tariff on the basis of content nor they are allowed to enter agreement that can have effect of imposing tariff of discriminatory nature.
  • These regulations are not applicable to data services over closed electronic communications.
  • Any contravention of Regulation would be adjudicated by the TRAI and its decision is final and binding.
  • The Regulations provide exemption in case of emergency services or grave public emergency.
  • Consequences of Contravention of Regulations is that TRAI may direct the service to withdraw such differential tariffs. The regulatory body has power to impose fine between fifty thousand to maximum of Rupees Fifty Lakhs.
  • The Regulations are subject to review by TRAI after a period of two years of it coming into effect.
  • The guidelines are not meant to effect vouchers subscribed before coming into effect of guidelines.

Conclusions

Both Internet users and content producers have grown exponentially. It is a welcome move to ensure that prohibition of discriminatory tariffs for data services as this would ensure that service providers continue to fulfill their obligation by keeping the Internet open and non-discriminatory for common users.

[1] (1995) 2 SCC 161

[2] (1985) 1 SCC 641

Published :
February 13, 2016
Practice Area :