India says free data is good for the poor, but regulators reject evidence-based approach

Recently, the Telecom Regulatory Authority of India (TRAI) released its Recommendations on Encouraging Data usage in Rural Areas through Provisioning of Free Data. In February 2016 TRAI imposed a two year ban on differential pricing for data services, but it now acknowledges that free data can benefit the poor. In its latest decision, TRAI rejected three proposed models for free data and presents a new model in which “third party aggregators” create the market for free data. The aggregators may also be eligible to take advantage of India’s Universal Service Obligation Fund (USOF) to participate. Let’s applaud TRAI for recognizing the value of free data. Aggregation is a novel approach, but it is neither costless nor neutral. Moreover, the ruling creates a new problem of regulatory discrimination restricting how telecom service providers can participate in the market.