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  1. Editorial: Free food OK, not free data!

Editorial: Free food OK, not free data!

Trai exceptions, for intranet, make it murky & illogical

By: | Updated: February 9, 2016 1:07 PM

Not surprisingly, given the Trai’s comments in the past, the telecom regulator has ruled out differential pricing for data which, in effect, means there can be no Free Basics of the type Facebook was offering or an Airtel Zero that Bharti Airtel had introduced and later withdrawn. This is odd since, as Trai’s order itself says, differential pricing is allowed on a case-by-case basis in the US and the EU but disallowed in the Netherlands and Chile—if Chile is to be the preference instead of the US and the EU, that tells its own story; interestingly, it was also this selective picking of countries that allowed Trai to come up with its strange recommendation to price

700 MHz spectrum at 4 times that of 1800 MHz (goo.gl/t5CSuC). Even odder, or murkier, is the exception Trai has granted. Telcos are allowed to offer free internet—100MB on Sundays, say—to their subscribers as long as this allows access to the ‘entire internet’, which is fine. What’s odd is the fact that differential tariffs are to be allowed for data on the intranet. In principle this means a Bharti Airtel or a Vodafone or an RJio can buy 10,000 movies and offer these free to their subscribers—the trick here is that they will be hosted on the Bharti/Vodafone/RJio intranet! It is difficult to see how this is any less discriminatory—to take Trai’s argument at face value—than a Facebook tying up with an RCom and allowing all websites that meet certain technical standards (in terms of how data-light they are) to offer themselves for free. Expect a lot of battles over this one clause with each telco trying to show what it is offering is not discriminatory pricing but merely services that are available on its intranet. Trai’s decision to stop a Free Basics or an Airtel Zero is even odder since, as the regulator admits, this will increase internet access.

At another level, while the government has, in the past, indicated that it is in sync with Trai’s logic, this means two explicit standards for the country. Free or differentially priced data is not to be allowed since it distorts the market, but the same does not apply to food or kerosene or other subsidised products! Surely FCI buying wheat and rice in a handful of states and not others, or the government subsidising wheat/rice and not fruits and vegetables is distortionary; surely offering subsidised kerosene, or LPG, distorts the market for petroleum products and stunts its growth? What’s sauce for the goose has to be sauce for the gander. It is odd that no one in the government has recognised the absurdity of this position.

In the meanwhile, with Trai having struck what is seen as the first blow for net neutrality—an ideal even those in the government have repeatedly sworn to—as this newspaper has argued before (goo.gl/V5AeiC), telcos need to insist on full clarity on net neutrality before the next auctions. If, in continuation of net neutrality rules, a WhatsApp voice service is to be made legal after the auctions, a telco will find 50 paise of voice services being reduced to 4-5 paise from data used in a WhatsApp call. The government is free to do this, but a telco then clearly needs to value the spectrum very differently. Going the whole hog on so-called net neutrality will affect the rollout of internet services in the country is unfortunate—why would a telco roll out more internet services if it doesn’t make as much money?—and is something the government and the regulator need to worry about. Telcos have to look after their bottomline; shareholder responsibility has to come first.

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  1. A
    Amol
    Feb 8, 2016 at 8:54 pm
    this is paid article for sure..very poorly written..
    Reply
    1. H
      Hari
      Feb 8, 2016 at 8:15 pm
      "or the government subsidising wheat/rice and not fruits and vegetables is distortionary". Yes it is distortionary but that doesn't mean we have to do it every where. Your argument is since we are doing bad in one sector lets not stop from being the same in every other sector.
      Reply
      1. Harsh Happy
        Feb 8, 2016 at 9:17 pm
        This article clearly shows how "Supari" journalism works.. Shame on you mr author and pple who run this paper.. you are out here to create an atmosphere of what TRAI did is wrong?? I bet the best thing is what has happened ..I salute TRAI for listening to Indian consumers. I dont want free stuff from FB.. ask them to invest in Indian IT Infrastructure and then earn revenue ..do the hard work.. dont fool us by your "Free" and its for "poor" marketing gimmick
        Reply
        1. J
          John
          Feb 8, 2016 at 8:46 pm
          This is probably the most pathetic defense of differential pricing for data. Your analogy between food subsidies provided by the government (under public control) vs differential pricing for websites (under telecom control, no public stake) shows your desperation. You want to make internet access like cable TV. Easy to control content, remove compeion, etc.. Well, you! If you want to show responsibility towards your shareholders, compete honestly with the newer startups that you're so scared of. Create your own version of whatsapp! Use that huge pile of money that your fat is sitting on.
          Reply
          1. U
            utk
            Feb 8, 2016 at 8:18 pm
            your w logic is flawed ! stop comparing food and people with information. Internet doesn't work like your day-to-day commodities! Just because Vodafone is offering me 50 free movies on their intranet, doesn't mean that I will not watch any other movies just because, I have these movies to watch ! But, if i can get all my data from one website itself for free, I will be FORCED to only go to that website ! that is like vodafone saying that the only movies you WILL EVER watch are the once on my intranet.
            Reply
            1. M
              murti
              Feb 9, 2016 at 2:18 pm
              Yes FB is killing the youth, links, sub links and all such stupid are very dangerous to youth today. If interested only shall be with FB and why should we post in FB and circulate our details. Good TRAI, any unwanted dangerous to society should be removed from Whatspp also. t
              Reply
              1. V
                Vivek
                Feb 8, 2016 at 8:58 pm
                Does the author even understand the difference between subsidy and corporate frills ?? Comparing subsidies with a regulation for private telecos is like comparing apples and oranges. The comparison that wheat and rice getting subsidy and not vegetables itself shows the knowledge level of yours. Pity financial express has such low quality content.
                Reply
                1. Y
                  Yash Pal
                  Feb 9, 2016 at 3:51 pm
                  I hope the author and the editor of FE have eaten the subsidised rice or wheat given to the poor. It is unpalatable. Similarly, the 'Free' basics would be. On another plane, comparing subsidy given for an essential item like food (grains, gas etc) and internet is just not possible; as they say, you are comparing apples with oranges and your arguments are flawed ab initio.
                  Reply
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