This article is written by Plash Mittal. Plash is a student of University Institute of Legal Studies, Panjab University, Chandigarh.

In light of the increase in complaints by consumers, Telecom Regulatory Authority of India (TRAI) notified a compensatory mechanism for consumers facing call drops. On the part of the Telecom Service Providers (TSPs), call drops are known as ‘deficiency in service’. A call drop occurs when slips occur in media, the phone goes out of range, electric and mechanic tilts occur, signal interference occurs, signal strength reduces to a minimum acceptable signal to make a call, interference due to bad environmental conditions or because of improper hard handoff. The amendment in Telecom Consumers Protection Regulations instituted on October 16, 2015; which made it a mandate for the mobile service providers to compensate their subscribers for call dropped or automatically disconnected due to technical glitches in their network. The rules mandated telecom operators to provide Re 1 compensation for each call dropped, with a compensation cap of Rs 3 per day. Cellular Operators Association of India, AUSPI and several telecom operators like Bharti Airtel, Vodafone and Reliance believed that the laws of physics make it impossible to provide 100 percent call drop-free network and that they would have to pay a penalty of Rs 1,000-1,500 crores. According to TRAI, if networks are not improved, the maximum outgo would be around Rs 800 crores per annum. The core basis for the opposition to prohibit such tariff packages was that flexibility in setting tariff should be allowed. The TRAI looking into the past position on issues like on-net and off-net calls and lifetime validity scheme allowed both the tariffs and thus such pricing was not discriminatory. Moreover, prohibiting differential data tariff is akin to having a standard voice call rate; in that case, local call rates would have been higher than 50-60 paise a minute. However, the perceived aim of such differential data packages is to widen the internet user base in the country by providing free or discounted access to certain internet services.

Section 3 of the Prohibition Of Discriminatory Tariffs For Data Services Regulations, 2016 prohibits every service provider to offer or charge discriminatory tariffs for data services on the basis of content and to enter into any arrangement, agreement of contract, by whatever name called, with any person, natural or legal or artificial, that has the effect of discriminatory tariffs for data services being offered or charged to the consumer on the basis of content, provided that the regulation would not apply to tariffs for data services over closed electronic communication networks, unless such tariffs are offered or charged by the service provider for the purpose of evading the prohibition in this regulation.

The tariff for data services could not vary on the basis of the website/application/ platform/ or other type of content being accessed. A consumer could not be charged differently based on whether he was browsing social media site A or B, or on whether s/he was watching videos or shopping on the Internet. Differential pricing is proved to be an effective marketing tool and is believed to have helped in bringing the online marketing practices to the next one billion people. The decision for the introduction of such a provision came at a time when the government was pushing adoption of Internet. It had a negative impact on the growth of the telecom industry and the consumers who could have needed such plans to afford data connections. To bring more users on the Internet, this prohibition would not apply to other forms of differentiation in tariffs that were entirely independent of content by giving limited free data enabling the user to access the entire internet. However, the legislation had a positive indication for future regulations on over the top applications such as WhatsApp and Skype. The regulation was believed to be very progressive.

International Perspective

The differential data tariff is allowed in several other countries like Singapore, Bangladesh, Malaysia, Hong Kong, and Thailand. Also SingTel, Singapore’s largest mobile operator offers a data package for Facebook disallowing voice and video calling. In Hong Kong, operators provide a dual WhatsApp tariff i.e. $18 for voice over internet protocol calls and $8 for messaging.

Current Status

The Supreme Court in May 2016 struck down the regulations framed by the TRAI which prescribed a penalty for call drops on telecom operators. A bench of Justices Kurian Joseph and Rohinton Fali Nariman held that the regulations were arbitrary in nature and violative of Article 14 and thus scrapped the law.