The best business models for offering free Internet

In a consultation paper released recently, Telecom Regulatory Authority of India (TRAI) had sought comments on business models that offer free internet to consumers without violating the differential pricing norms set by it. In an interview, Vishal Misra, a computer science professor at Columbia University, analyses the three business models highlighted in the consultation paper. Prof. Misra has been looking into the issue of Internet economics and Net neutrality for a number of years.

Here are they:

On the model of data recharge coupons or rewards model essentially giving away free data without being a gatekeeper:

The benefit of this model is that for content providers who cannot afford to be a part of the recharge program, the recharged data could be used in consuming that content so it does not disadvantage them too much.

On Toll free API:

This option is also not discriminatory but could be open to abuse or hacking. Implied in the model is that the content provider will pay the actual data charge and not the consumer. It is also implied that the data charge would be whatever the consumer would’ve been charged, and not some fixed rate. This last part opens it up for some sort of abuse. Hackers can open up accounts with extremely expensive data charges, and start flooding the toll-free lines with traffic, running up the bill for the content provider. This is different from a denial of service attack that content providers already deal with, since all data is fixed rate. This could also lead to disputes between Telecom Service Providers (TSPs) and content providers on what the actual charge to the consumer would’ve been.

On Direct transfer of money for Internet data charges:

This is the worst of the models. Under this scheme, zero rating for select sites that can afford it will get pervasive and since the consumer is getting cash back and not data, sites that cannot afford to be a part of this scheme will be at a severe disadvantage.

The Hindu Tech