Television

Differential pricing can throttle India's fledgling digital space: Zee

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MUMBAI: The fight for net neutrality in India continues with major players submitting their comments to the Telecom Regulatory Authority of India (TRAI). After broadcasters like Star India and Sony Pictures Networks India sent in their comments to TRAI, now putting forth its views in favour of net neutrality, the Subhash Chandra led Zee Entertainment Enterprises Ltd (Zeel) has voiced that differential pricing is completely contrary to the concept of net neutrality and competition, and can have the impact of throttling the fledgling digital space in the country. 



The broadcaster said that differential pricing cannot be on the basis of type of services consumed, rather the basis of pricing ought to be only on the amount of data consumed. “It is akin to electricity consumption – consumers are charged the same per unit consumed. The more you consume the more you pay – you either pay for time used (as in cyber cafes) or data consumed (as in our personal plans),” Zee said.



Further presenting its case, the broadcaster said that differential pricing was already built in by pricing the bandwidth by volume slabs. For example, if a streaming Content Delivery Network (CDN) uses 1000 GB of data usage a day, it can have a different pricing slab vis-a-vis another customer who uses 1GB per day. The end customers, when they access such websites (say Youtube or Facebook) however pay the same price per GB of usage as per their own data plan without discriminating which website they are accessing/visiting. 



“However, the current question is whether for the same volume, customers can be offered differential tariffs, and the difference be bartered from the content provider or application provider website,” Zee said.



This would in turn lead to violation of net-neutrality as bigger content or application providers can make their access free, and thereby causing severe disadvantage to the newer startups, which may not necessarily have the muscle to pay charges to TSPs on behalf of customers.



Major telecom providers have proposed a new ‘Zero Rating’ scheme also known as toll-free data or sponsored data, wherein TSPs don’t charge end customers for a well defined volume of data by specific applications or internet services via the TSP’s mobile network in limited or metered data plans and tariffs. The most prevalent zero-rated programmes involve giants like Facebook, Google and Twitter, which makes the issue more contentious as it also poses a threat to local content development.



Zee Network said that in countries like India, net neutrality is more about cost of access than speed of access as Internet speeds in India have not yet caught up with the developed world. 



“Zero-rated mobile traffic is blatantly anti-competitive price discrimination designed to favour TSPs own or their partners’ apps while placing competing apps at a disadvantage,” the broadcaster said.



Citing that TSPs like Airtel, Idea, Reliance and Vodafone may offer Zero Rated plans as was done by T-Mobile in the US as a major strategy to win over customers by providing Zero priced access to all streaming websites such as Hulu, Netflix, YouTube etc. The customers of all these websites did not have to make any additional payment over and above their regular data plan for unlimited access to streaming, and such data usage was not debited from their internet pack and was free.



“As TRAI is aware, Zero Rated plans are in fact permitted by some regulators specifically in developed countries, these are in fact not favoured in developing countries. However selective Zero Rating is not permitted,” Zee opined.



Opposing any selective Zero rating or differential rating plan, Zee pointed out that the network cannot differentiate between different types of data (the fundamental principle of net neutrality).



Putting forth the reasons for opposing the same, Zee said:



(i) Internet is dominated by some large international players in all fields (Search: Google, Apps: Facebook, WhatsApp, Social sites, Streaming: Netflix, Hulu etc). Because of their scale and valuations they can completely dominate and smother any small startups if zero rated plans are permitted.



(ii) Non-discriminatory internet access Internet is key to India’s startups and innovative service providers. We need them to grow to global levels, rather than allow the Indian landscape to be dominated by selective international players who are able to pay for content.



“Differential pricing is undesirable at this stage, and in no case there should be differential pricing, which is not equally applicable to all sites that provide the same application or service,” the company said.



In response to TRAI’s questions as to if there were alternative methods, technologies or business models, other than differentiated tariff plans, available to achieve the objective of providing free internet access to the consumers, Zee said that if differential pricing is offered, it would nominally follow one of the following models:



1) TSPs providers cover the costs to users of accessing certain hand-picked sites and apps, which are their own. (This is a TSP and Content Owner combination) and should under no circumstances be permitted.



2) A company pays to provide access to a suite of different services; - Zee Network’s view is that this should not be permitted as the data charges are very high in India and only very large well established International players can afford the same killing competition.



Hence, coining the term ‘Equal rating’ for similar services and products, Zee said that the “principle of Cross ownership between TSPs and their own sites for Application or content needs specific attention and should be specifically prohibited. In some cases, TRAI may need to lift the “Corporate Veil” and ensure that the rules are not being violated by restructuring entities.”



Voicing its opinion on other issues to be considered in the present consultation on differential pricing for data services, Zee said, “We need to understand that while India is still developing its technologies and has a vibrant start up market, there are well established companies, which would easily pay for user access for access to their own websites or content. Hence: (i) Net Neutrality should in no case be violated; (ii) Creation of network owning companies where they own their network and also create content repositories should be entirely prohibited; and (iii) Zee Network would also like to strongly advise against device specific discriminated tariffs.”

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