Business Standard

iSPIRT questions Nasscom rationale on differential pricing

Says Nasscom's support of case-to-case based permission for internet access would harm the interest of young and small firms

Anita Babu  |  Bengaluru 

Telecos back the idea but Nasscom, IMAI oppose move

Issues around differential pricing for internet access are far from dead. Now, software product body iSPIRT has come out against Nasscom, the software industry lobby group against the latter’s support of "case-to-case basis" based permission for differential pricing for internet access.

Stating that Nasscom is not clear of the categories of services such exemption should be provided, iSpirit, based out of Bengaluru, says it would harm interest of young and small companies who could lose out to larger companies.

“This is for the stated objective of public interest however; there is a large degree of ambiguity present here,” said iSPIRT in its counter comments to the telecom regulator.

"This by itself is demonstrable of the creeping approach, where an exemption to network neutrality will slowly become bigger and later, the exemption will become the rule."

However, Nasscom defended its stance and blamed it on a few stakeholders’ lack of faith in the regulator.

“It is evident from the counter comments that some stakeholders believe that there can be no situation, ever, where there could be a need for public access to specific services and/or content free of cost or at a differential cost," Bishakha Bhattacharya, senior director for Policy at Nasscom wrote in an email response to Business Standard.

"Further, stakeholders who are contesting this idea seem to believe that even the regulator should not have the authority or discretion to mandate or allow such services to be priced differentially, even after a public consultation."

iSPIRT cites reasons such as lack of quality and insufficient reach of networks that have led to lower internet adoption in India. "Lower internet adoption is primarily tied to quality and reach of networks (as is the case with Northeast) and infrastructure as well as sociological causes such as literacy," iSPIRT said in its counter comments dated January 14.

Nasscom, while maintaining that "telecom service providers should not be allowed to don the role of gatekeepers and use tariff plans to decide what users should access", had suggested that short term (less than three months) exemptions should be allowed for "emergency and essential citizen services".

On allowing differential pricing for a few services for a short term of three months, iSPIRT contended that such a move will have the same effects as the long-term exemptions. Given the fact that in the initial stages most of the startups will be focused on user acquisition in the first three months of operations, such a move will lead to market foreclosure and end up raising the entry barriers for startups.

iSPIRT also pointed out large ambiguities in NASSCOM's case-by-case approach on differential pricing. Such an approach ignores the harms resulting from "the market foreclosure that would be suffered by startups", it says.

On Nasscom's suggestion of third-party not-for-profit entities benefiting from differential pricing of data, iSPIRT asserts "the same harms would accrue to startups where

they would be forced to partner with them and bargain like they would with any other commercial entity". This will also question the independence of such applications. iSPIRT warns that such an exemption will also be misused by foundations and trusts set up and funded by commercial entities in the sector.

TRAI has received about 2.4 million comments out of which around 1.9 million comments came from Facebook users and 0.48 million through the Save the Internet forum.

TRAI's final views will decide the fate of plans such as zero rating and Free Basics being offered by Facebook. These plans created a furore on the issue of net neutrality with many experts saying there is violation of net neutrality principles. TRAI is expected to come up with its recommendations on the issue by the end of this month.

First Published: Wed, January 20 2016. 13:20 IST