India deals blow to Facebook in people-powered 'net neutrality' row

Facebook has lost the right to offer its free mobile internet service in India after the country’s telecoms regulator ruled in favour of net neutrality, marking the end of an intense and very public 11-month national debate.

The new regulations published by India’s Telecom Regulatory Authority (TRAI) ban differential pricing for data services, and make it easier for smaller firms to compete with established companies including Facebook.

“This is great news,” said Kiran Jonnalagadda, a member of the Save The Internet campaign in favour of net neutrality. “It is what this country needed and it took a lot of effort pushing for it. It took a lot moral fibre for TRAI to stand up to the telcos.”

India’s net neutrality movement has campaigned hard to stop Facebook controlling free access to a selected number of web services through its “Free Basics” service. TRAI has said that operators cannot “charge discriminatory tariffs on the basis of content”, or sign contracts with anyone that result in such discriminatory data tariffs with immediate effect, and will impose fines of 50,000 rupees a day ($735) if the regulations are broken.

While it acknowledged some “positive effects” of differential pricing, TRAI said that “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 web sites/apps/services platforms by giving lower rates for accessing them.”

Renata Avila, programme manager for the Web We Want campaign at the World Wide Web Foundation said the decision by India - the world’s second largest internet population - followed a precedent set in the US and Chile which have adopted similar principles.

“The message is clear: We can’t create a two-tier internet – one for the haves, and one for the have-nots. We must connect everyone to the full potential of the open web. We call on companies and the government of India to work with citizens and civil society to explore new approaches to connect everyone as active users, whether through free data allowances, public access schemes or other innovative approaches.”

Facebook said in a statement: “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.”

Rajan Mathews, director general of the Cellular Operators Association of India, also said the industry was disappointed with the ruling. “COAI had approached the regulator with the reasons to allow price differentiation as the move would have taken us closer to connecting the one billion unconnected citizens of India. By opting to turn away from this opportunity, TRAI has ignored all the benefits of price differentiation... including improving economic efficiency, increase in broadband penetration, reduction in customer costs and provision of essential services.”

Victory for Save the Internet

TRAI’s verdict is the culmination of an 11-month-long process that began in March 2015 with a 118-page, jargon-filled “consultation paper”. It recommended that telecom operators be allowed to charge extra for using WhatsApp, Facebook, Twitter and other third-party internet-based apps and services.

TRAI asked the public to respond to 20 questions from the public, giving rise to a spirited, pro-net-neutrality campaign called Save The Internet, supported by lawyers, technologists, journalists and policy experts. They created a list of responses that users could copy, paste and email in just three clicks. The movement was boosted by the popular standup comedy group All India Bakchod (AIB), who made John Oliver-style 13-minute YouTube videos explaining the adverse effects of differential pricing and zero-rating plans on the Indian internet.

By 24 April, the last date on which people could send in responses, 1.1 million Indians had emailed TRAI, urging it to stop telecom companies from indulging in differential pricing.

In August 2015, India’s Department of Telecom (DOT) moved the discussion to MyGov.in, a website designed to improve communications between citizens and India’s Union government. Campaigners suspected the move was designed to discourage people from participating in the debate because the site made it harder to leave comments. AIB consequently put out another video, urging people to post comments on the new consultation site.

By December, Facebook had stepped up its public relations and lobbying in India, changing the project’s name from Internet.org to Free Basics, and taking full-page color advertisements in India’s newspapers that talked about “digital equality” and connecting people from rural areas.

The Indian prime minister, Narendra Modi, met the Facebook founder Mark Zuckerberg in Menlo Park in September 2015, and a month later Zuckerberg flew to India to do his own town hall meeting in New Delhi.

Facebook’s argument was that it supported net neutrality because anybody could use Free Basics. Yet the company reserved the right to reject partners and disallowed voice-over-internet-protocol (VOIP) calls, high-resolution videos and photos that interfered with telco services – in direct contradiction to TRAI’s recommendation that people in rural areas should have access to more video content. It also tweaked the notifications tab on users’ homepages to notify them about friends who, apparently, supported free basics – which, as it turned out, wasn’t entirely true.

Meanwhile, TRAI asked Reliance Communications, a major telecoms operator, to put its Free Basics partnership with Facebook on hold until the ruling by the regulatory body. By 20 December, the regulator had received 600,000 comments.

TRAI rebuked Facebook in January, complaining that the company hadn’t communicated the authority’s message to its users. In a letter to Ankhi Das, Facebook’s public policy director in India, TRAI said that the company “remained silent” on the specific questions of whether or not telcos should be allowed to indulge in differential pricing, alternative revenue models and measures to ensure transparency if differential pricing were to be adopted.

In response, Facebook sent what TRAI described as a “templated response” which didn’t address the questions. The twin purposes of public consultations were to get “valuable inputs from all stakeholders” and to “foster a transparent regulatory environment”, said TRAI. “However, your urging has the flavor of reducing this meaningful consultation exercise designed to produce informed decisions in a transparent manner into a crudely majoritarian and orchestrated opinion poll.”

TRAI also expressed its concern over Facebook’s “self-appointed spokesmanship” on behalf of its users, who had not authorised the company to do so.

Not the last word

On 21 January, the regulator held a final open meeting (listen to the audio here) in New Delhi where it invited people to submit their views on zero-rating plans and differential pricing ahead of the ruling.

During the event, major telecom firms including Airtel, Reliance Communications and Idea Cellular maintained that differential pricing of telecom services is necessary to fuel innovation. Star India claimed that telcos are using this as an opportunity to “abandon” their traditional roles as provider of basic services, and playing “intermediary” between consumers and content creators. They will then “extract maximum valuation with utter disregard of not only the content industry, but also consumers, civil society and lakhs of millions of entrepreneurs in this particular space”.

TRAI’s 8 February ruling won’t be the last word on the net-neutrality debate in India. Jonnalagadda said that he expects Facebook and telecom operators to challenge the ruling in a higher court of law or before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).