TRAI rules out Facebook's Free Basics project in India

The 10-month nationwide debate on whether Facebook should be permitted to offer data services to people in rural India through its "Free Basics" project ended with the Telecom Regulatory Authority of India (TRAI) proscribing differential pricing for data services on Monday evening.

The regulator settled the issue once for all by issuing "Prohibition of Discriminatory Tariffs for Data Services Regulations 2016" that bars service providers from offering or charging discriminatory tariffs for data services on the basis of content they provided to the people. The telecom service providers have the option of challenging TRAI's ruling in the courts but it will take a while before the judgments are pronounced.

"Prohibition of discriminatory tariff is necessary to ensure that service providers continue to fulfill obligations in keeping the internet open and non-discriminatory," TRAI Chairman RS Sharma said, adding that anything on the internet cannot be differentially priced.

"Everything on the internet is price-agnostic and nobody can beat that. This regulation comes into effect from today," he announced. Besides Facebook, the decision also impacted one of the major telecom service providers, Airtel, which launched a similar project Airtel Zero in April 2015 to offer data services by pricing the same.

The TRAI's direction is a major setback to Facebook, which has been implementing the project in many countries but could not do so in India as internet activists took the streets claiming that it would put an end to net neutrality in the country.

Reacting to the TRAI verdict, Facebook said that it was disappointed with the outcome. "Our goal with Free Basics was 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," the social network said in a statement.

Reacting to the decision from his own Facebook account, the network's founder Mark Zuckerberg wrote, "Everyone in the world should have access to the internet ... While we're disappointed with today's decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world.

"Connecting India is an important goal we won't give up on, because more than a billion people in India don't have access to the internet. We know that connecting them can help lift people out of poverty, create millions of jobs and spread education opportunities. We care about these people, and that's why we're so committed to connecting them," he added.

"Our mission is to make the world more open and connected. That mission continues, and so does our commitment to India."

Facebook teamed up with Reliance Communications to launch the project in November last year but the regulator applied brakes as the project triggered a nationwide discussion. On its part, Facebook undertook a virulent "Save Free Basics" social media campaign to counter the arguments of internet activists but TRAI's Joint Adviser K V Sebastian alleged that Facebook was trying to turn its campaign into a "crudely majoritarian and orchestrated opinion poll".

According to the TRAI order, service providers cannot offer or charge discriminatory tariffs for data services on the basis of content and they should not enter into any arrangement, agreement, or contract, by whatever name with any person, natural or legal, to the effect of discriminatory tariffs for data services being offered or charged by them for the purpose of evading the prohibition in this regulation.

The order, however, permitted reduced tariff for accessing or providing emergency services, or at times of public emergency, and these orders will be reviewed after a period of two years. TRAI will impose a penalty of 50,000 rupees a day on the service providers with a cap of 50 lakh rupees if they charged discriminatory tariffs.

According to internet activists, the project was in violation of net neutrality as it would restrict free access to the internet. The SaveTheInternet.in coalition thanked TRAI for issuing orders prohibiting differential pricing, "which would have allowed telecom operators to break the internet and become gate-keepers and toll-collectors".

The activists further stated two key aspects of the net neutrality consultation: Firstly, a proposed requirement for providers of VoIP services like Whatsapp, Viber, and Skype to obtain a government licence, which would mean that telecom operators could be required to treat traffic from unlicensed VoIP providers differently from the rest; and secondly, allowing telecom operators the ability to slow down and speed up websites, giving them the ability to play king-makers and gate-keepers.

"People should be vigilant, as always, and should consider participating in this process in the future. SaveTheInternet opposes any form of licensing of Internet Services. This includes VoIP," the activists said in a statement.

The coalition also appealed to the operators not to contest the TRAI ruling in the court as it would be unfortunate and against the interests of consumers. "We believe net neutrality will be covered under free speech protections provided under Article 19 of the Indian constitution," they added.