India Bans Zero Rating As The U.S. Pays The Price For Embracing It

from the unlevel-playing-field dept

Mon, Feb 8th 2016 9:34am — Karl Bode

As expected, the Telecom Regulatory Authority of India (TRAI) has passed new net neutrality rules (pdf) that specifically ban the practice of zero rating. The rules are relatively clear in that they prevent either content companies or ISPs from striking deals that exempt select content from usage caps. The ruling acknowledges that such models create an unlevel playing field for smaller companies who may not be able to pay to play:

"...differential tariffs result in classification of subscribers based on the content they want to access (those who want to access non-participating content will be charged at a higher rate than those who want to access participating content). This may potentially go against the principle of non-discriminatory tariff. Secondly, differential tariffs arguably disadvantage small content providers who may not be able to participate in such schemes. This may thus, create entry barriers and non-level playing field for these players stifling innovation. In addition, TSPs may start promoting their own websites/apps/service platforms by giving lower rates for accessing them.

The ruling effectively bans Facebook's "Free Basics" program, despite an immense amount of often misleading lobbying and marketing by the social networking company. Net neutrality advocates in India had argued that Free Basics -- which exempts Facebook "curated" content from wireless usage caps -- gave too much walled-garden power to the company, allowing it to corner India's ad and content markets for years to come. Facebook, in contrast, argued it was being entirely altruistic, solely worried about India's poor farmers.

In a statement on TRAI's decision, Facebook reiterated that it was only trying to help:

"Our goal with Free Basics is to bring more people online with an open, non-exclusive and free platform. While disappointed with the outcome, we will continue our efforts to eliminate barriers and give the unconnected an easier path to the internet and the opportunities it brings."

As it stands, companies that violate the rules need to pay 50,000 rupees per day ($740), up to a maximum of 5 million rupees (an inconsequential sum to carriers and Facebook alike). The rules will be in place for two years and could be open for review at that time. As such, Facebook could still lobby to have the restriction on zero rating weakened, or could modify its Free Basics program so that it better adheres to the rules. Or, better yet, as Mozilla had suggested if Facebook really wants to help it could take all of the marketing, PR, lobbying, and design money being spent on Free Basics, and actually spend it on improving India's lagging telecom infrastructure.

India now joins The Netherlands, Japan, Chile and Slovenia in passing net neutrality rules that clearly prohibit zero rating. Contrast that to the rules here in the States, which don't specifically forbid the practice, instead ambiguously stating that services will only be examined on a "case by case" basis. But the mere act of opening the door to the precedent of zero rating already has already resulted in companies like Comcast and Verizon abusing it, both of them now exempting their own services from usage caps, while still penalizing competing services like Netflix.

Regulation-Data-Service (PDF)Regulation-Data-Service (Text)

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Filed Under: free basics, india, net neutrality, trai, zero rating
Companies: facebook

23 Comments

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Whatever (profile), 8 Feb 2016 @ 9:37am

Unlike many places, the Indian government has no problem denying any and all benefits to the lower caste of people in the country. It's pretty shameful to block what may have been a reasonable choice for people who have no service at all.

India is perhaps one of the most backward counties when it comes to human rights and equality. It's really a good idea to follow their models and choices, right Karl?
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Anonymous Coward, 8 Feb 2016 @ 9:49am

Re:
In this particular instance they are more thinking than most other countries.

Or should we ignore it when they have a good idea solely because it is surrounded by bad ideas?
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IncogBrian, 8 Feb 2016 @ 10:29am

Not all bad
The time the baby didn't get thrown out with the bath water.
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That One Guy (profile), 8 Feb 2016 @ 10:40am

Re:
Guess you missed this part:

Or, better yet, as Mozilla had suggested if Facebook really wants to help it could take all of the marketing, PR, lobbying, and design money being spent on Free Basics, and actually spend it on improving India's lagging telecom infrastructure.

If they really want to help those poor farmers they were so very concerned about when they were trying to get Free Basics accepted nothing's stopping them, they can still spend the money helping improve the infrastructure and improving peoples access to the internet, they just don't get to create their own little Facebook curated and controlled version of the net in the process.

Now that Free Basics has been shot down we'll see how much they really care about those farmers, though I imagine without the ability to create a Facebook controlled system they'll go back to being completely indifferent towards them.
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Anonymous Coward, 8 Feb 2016 @ 11:55am

$740 a day? I'd think they'd just pay the fine...
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Jeremy2020 (profile), 8 Feb 2016 @ 11:57am

Re:
They would basically be admitting it is more important to capture the market then follow Indian Law. That would likely burn some bridges.
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DannyB (profile), 8 Feb 2016 @ 1:29pm

But the US leads . . .
. . . in corruption.

> India now joins The Netherlands, Japan, Chile and Slovenia
> in passing net neutrality rules that clearly prohibit zero
> rating. Contrast that to the rules here in the States
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Derek Kerton (profile), 8 Feb 2016 @ 2:01pm

"The ruling acknowledges that such models create an unlevel playing field for smaller companies who may not be able to pay to play"

I agree. But there should be nothing inherently illegal about an unlevel playing field. "Inability to pay to play" isn't inherently wrong - I can't launch an airline right now either, for lack of capital. I don't think that is unfair. It's just a question of available resources.

If all content providers are faced with the same price to enter the walled garden, and that garden is open to all, then I don't see it as anti-competitive. This applies as long as the network operator is NOT also a content provider, which would have perverse incentives.

I don't like the Facebook walled garden, and think it will harm the open web in India. But I don't see it as "wrong" unless content providers are unfairly blocked from participating.

Contrast that to this, which I do see as wrong:
https://www.techdirt.com/blog/netneutrality/articles/20160205/12564833535/verizon-gives-net-ne utrality-giant-middle-finger-exempts-own-video-service-wireless-usage-caps.shtml
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Anonymous Coward, 8 Feb 2016 @ 2:12pm

Re:
The real problem is not zero rating it's data caps, where I live we've had zero rating on some local content for years ( we are an island nation so encouraging people to access local content takes the strain off the submarine cables (only 2) that connect us to the world).
One provider had a deal with one of the television networks and another with the other one. When we had data caps it could affect your monthly bill if you used one of these providers, or didn't. But now it is very cheap to get an unlimited connection and zero rating is no longer a selling point for any of the providers.
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Anonymous Coward, 8 Feb 2016 @ 5:25pm

Re:
What a warped view of the world you have.
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Anonymous Coward, 8 Feb 2016 @ 5:28pm

Re:
If it were a competitive market, I would agree - but it's not.

Most ISPs are content "owners", and yes, that is a conflict of interest.
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klaus (profile), 9 Feb 2016 @ 12:16am

Re:
"I can't launch an airline right now either, for lack of capital. I don't think that is unfair. It's just a question of available resources."

I'm not so sure about the strength of your analogy. I see it more as you having to pay $xyz to land your planes at airports whilst AA and Lufthansa doesn't. If you really, really wanted to float an airline, you might be considering starting up with tiny planes; air-taxis are a thing...
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Whatever (profile), 9 Feb 2016 @ 8:59am

Re: Re:
Actually, no, I didn't miss that part. What you don't understand is that whatever improvements they make would be for those who can easily obtain internet service, and would do little for those who just plain cannot easily afford it.

India's caste system damns a huge segment of the population to a life of poverty and menial work for pennies (if even). Making the internet a little bit faster for the middle class ain't going to help out the millions of people who just can't afford it or aren't going to get it.
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That One Guy (profile), 9 Feb 2016 @ 9:44am

Re: Re: Re:
If non-Free Basics is doomed to only help the middle-class and above due to caste system issues, then I really doubt Free Basics would have been any different or better. They can still foot the bill out of the kindness of their hearts for low income individuals to have access, they just don't get to control what is and is not accessible via that access.
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Ninja (profile), 10 Feb 2016 @ 7:08am

Re:
And unlike many people you seem to be unable to understand that Zuckeberg's idea is bad because it will both provide a fake, censored version of the internet for the Indians AND put a major monopoly in Facebook's hands.

India is perhaps one of the most backward counties when it comes to human rights and equality. It's really a good idea to follow their models and choices, right Karl?

Let me Godwin it once again: The 3rd Reich was an absolute disaster in terms of Human Rights and yet had pretty good animal protection laws. Maybe we should ignore that and keep letting animals be abused, you know, because Hitler was bad? Then again, this is your lack of ability to see nuances showing yet again.
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Derek Kerton (profile), 11 Feb 2016 @ 12:11pm

Re: Re:
Klaus

Airline argument is simply to point out that when any startup that can't afford the natural barriers to entry in a market, that's just life.

Like when many startups couldn't launch in the days before cloud hosting. There was no "crime" in that. It was expensive to set up your own hosting and datacenter, so you didn't. With Amazon Web Serivces, now many new businesses can flourish. That's awesome, but it doesn't mean there was a crime before.
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nasch (profile), 16 Feb 2016 @ 10:20am

Re: Re: Re:
Airline argument is simply to point out that when any startup that can't afford the natural barriers to entry in a market, that's just life.

Is zero rating a natural barrier to entry?
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Indian, 20 May 2016 @ 6:13am

Re: Re: Re:
What caste system? Discrimination by caste is prohibited in India constitutionally, They are poor because they are poor, not because of caste.
Moreover members of prior low caste , scheduled tribes get reservations in government jobs and colleges, have to score less to get the same job.

Maybe update your information a bit,
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Indian, 20 May 2016 @ 6:16am

Re: Re: Re:
You are totally wrong on it. There is no sponsored discrimination based on caste. It is illegal and criminal.
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Indian, 20 May 2016 @ 6:28am

Re: Re:
How is India backward in human rights and equality? It scores more than America on the democracy index for civil rights.
The constitutional guarantees fundamental rights, liberty equality fraternity is what it is based on!
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Indian, 20 May 2016 @ 6:30am

No, it is just an unfair trade practice.
We ban unfair trade practices. Simple.
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nasch (profile), 20 May 2016 @ 7:34am

Re: Re: Re: Re:
There is no sponsored discrimination based on caste. It is illegal and criminal.

And therefore it never happens. QED.
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nasch (profile), 20 May 2016 @ 7:35am

Re: Re: Re:
How is India backward in human rights and equality? It scores more than America on the democracy index for civil rights.

Do you have a source for that?
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