Facebook faces setback as India bans differential data pricing

[MUMBAI] India's telecom regulator ruled against cellular operators offering plans that charge different rates for access to the Web depending on the content - a setback to Facebook Inc's push for its limited Internet plan in the South Asian nation.

Telecom operators cannot offer discriminatory tariffs for data services based on content, and are not allowed to enter into agreements with Internet companies to subsidize access to some websites, the Telecom Regulatory Authority of India said in a statement Monday. Companies violating the rules will be fined, it said.

The regulator's decision comes after months of public lobbying by Facebook for India to approve its Internet sampler plan known as Free Basics, which allows customers to access the social network and other services such as education, health care, and employment listings from their phones without a data plan. The plan was criticized by activists who said it threatened net neutrality, the principle that all Internet websites should be equally accessible, and could change pricing in India for access to different websites.

The regulator, which had sought stakeholders' views, said it was guided by the principles of net neutrality and seeks to ensure data tariffs remain content agnostic. Operators will have six months to wind down existing differential pricing services, according to the regulator.

BLOOMBERG