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ICLE files comments on the Telecom Regulatory Authority of India's Consultation Paper on Differential Pricing for Data Services PDF Print E-mail

Last week ICLE filed comments responding to the Telecom Regulatory Authority of India's Consultation Paper on Differential Pricing for Data Services.

Our comments explain why banning "zero-rating" and other "differential pricing" business models in India would be a costly mistake for the country. As we note in our comments:

The approach taken in this Consultation to the the question of competition and consumer harm risks putting the cart before the horse. Before special rules are crafted to attempt to address perceived threats to consumer welfare, existing and effective rules of general applicability can and should be employed to address actual harms: most significantly, the well-developed principles of competition law that have been in force in India since the enactment of the Competition Act in 2003.

Importantly, competition laws are typically employed to address actual harms on a case-by-case basis, generally eschewing per se condemnation of business arrangements (like vertical integration) that impair competition only in limited circumstances. The error costs of over-enforcement of TRAI’s principles of transparency and nondiscrimination. likely threaten more harm than do the risks of underenforcement.  In the face of rapidly accelerating technological changes — which will continue to present new and unanticipated possibilities for different tariff models — an effects-based approach under the competition laws that conducts an ex post analysis of conduct would be far more prudent. Instead of foreclosing or mandating specific conduct, such an approach would permit and foster experimentation, innovation and technological development, intervening only where actual competitive harms develop.

TRAI has a commendable history of “light touch” regulation of tariffs, reflecting the Authority’s understanding that proper regulation leaves room for market players to adapt technology and to tailor their services to evolving consumer demand. There is nothing new or unique about internet companies that would justify breaking from this approach — in fact there is much to be gained in continuing to allow differentiation as internet platforms discover better ways to enhance consumer welfare.

We've discussed non-neutral pricing and related issues extensively in the past -- see, among many others:

Our full comments to the TRAI are available here.