TRAI is right in not allowing telcos to offer differential data speeds based on tariffs

The Telecom Regulatory Authority of India (TRAI) has taken the right decision by stopping Airtel and Vodafone Idea from offering differential data speeds to customers paying higher tariffs. While Vodafone Idea had in November last year launched a premium pack that offered up to 50 per cent higher speeds, Airtel recently gave differential data services to all post-paid users who paid above ₹500 a month. Offering differentiated services is very common in other sectors, including hotels, airlines and e-commerce. Such offers are legitimate marketing tools deployed to retain existing customers and attract new ones. However, in the telecom sector, mobile services are provided using spectrum, which is a shared resource. Unlike fixed-line telephony, where a cable line is dedicated to a specific user from her home to the nearest exchange, spectrum is shared between all users in a given location. This means that if data speeds of a select group of customers are bumped up, there is a chance that the quality of service of others in that area will get affected. As it is, consumers are grappling with call drops and poor data network coverage across the country. Both Airtel and Vodafone Idea should explain how they are managing their network design to ensure that providing higher speeds to high paying users does not impact the quality of service for the majority of users.

Communications are essential services and operators cannot discriminate based on the customer’s ability to pay when it comes to Internet speed and content. In 2016, TRAI had disallowed differential pricing for data services. By asking telecom operators to stop offering plans that allow access to a limited number of websites free or at lower cost than what a user pays for accessing the Internet, in general, the regulator upheld the basic principles of network neutrality, which is to enable fair, equal and non-discriminatory access to all. It is all right to offer bundled applications and giving priority support to premium subscribers but giving higher data speeds to those who can pay more could be seen as going against these principles of network neutrality, unless the regulator can ensure minimum quality of service to all users first.

TRAI also has some explaining to do. Vodafone Idea launched the new tariff plan in November and it has been told to stop offering differential tariffs eight months later, that too after a rival operator flagged the issue. The operator had submitted its tariff plan to the TRAI twice in the last eight months. It’s not clear why the regulator did not take any action for so long. TRAI should also clarify why the operator was given only one day to present its case before asking it to stop the tariff plan. The seeming gaps in the process adopted by TRAI could allow the operator to entangle the entire issue in the courts. The regulator should not allow the discourse to be be shifted away from the question of violation of net neutrality.

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