The Telecom Regulatory Authority of India has taken a bold decision by disallowing differential pricing for data services. By asking telecom operators to stop offering plans that allow access to a limited number of websites — either free or at lower cost than what a user pays for accessing the internet in general — the regulator has upheld the basic principles of network neutrality, which is to enable fair, equal and non-discriminatory access to all. Internet penetration in India is still at a nascent stage and the rules of the game needed to be set at an early stage; in doing so, the foundation has been laid for robust broadband growth. This is also in line with the Centre’s push to promote entrepreneurs and startups in the digital world as they will now be assured of a level playing field in accessing customers via the internet, without the fear of telecom operators acting as gatekeepers. While the arguments in favour of differential pricing cannot be dismissed out of hand, in a country where the majority is not connected to the internet, this would have given too much power to telecom operators to shape user experience. Besides, it would have also created significant entry barriers for innovative smaller companies, which could have been stifled by stronger players with deeper pockets.

On balance, the contention that differential pricing would make overall internet access more affordable and hasten online access fails against the larger principle of net neutrality — equal access for all. Moreover, the projected altruism of the former approach is undermined by the fact that what its loudest proponents really want is a slice of the internet economy. If the real object was to wean people to the internet, then a scheme offering free trial packs for a limited period would do the trick — a proposal TRAI has backed.

However, it is baffling why the regulator has allowed differential tariffs to be offered for data transmitted over so-called ‘closed electronic communications networks’. Although such a communications network does not allow data to be received or transmitted over the internet, telecom operators may use this exemption to push their versions of a ‘walled garden’ network. TRAI has left the door open for telecom operators to interpret the exemption in a way that suits them and create a parallel network to offer applications and services at lower tariffs. If the regulator truly wants to ensure network neutrality, it should clearly explain why this provision has been incorporated and the conditions that would apply to such closed networks. There should be no room for ambiguity, failing which it should withdraw this permission. Otherwise, it could be a case of so near yet so far.