Tuesday, 9 February 2016

Differential Data Pricing and why consumers should block it in Namibia

MTC has introduced Differential Data Pricing without consulting the regulator or consumers.

Recently the telecommunications industry have seen the mushrooming of over the top (OTT) content providers as a threat to their business model. OTT refers to delivery of audio, video, and other media over the Internet without the involvement of a multiple-system operator in the control or distribution of the content - in other words the consumer chooses a data service not provided by the telco service provider.

In South Africa the dominant service providers, (Vodacom and MTN), have instigated a parliamentary debate and are doing their best to introduce hurdles to customers using services such as WhatsApp and Facebook arguing that these services do not pay tax or contribute to the actual infrastructure that customers use.

This debate is however not about services being offered - but rather the threat of losing revenue from voice and SMS.

One of the options being put forward is the use of Differential Data Pricing (DDP) - a process through which telecommunications service providers could or charge discriminatory tariffs for data services offered based on content.

In Namibia, the dominant service provider, MTC, has quietly introduced DDP without consultation with the regulator (Communications Regulator of Namibia) or consumers. The company simply introduced a separation of which data services (and how much of them) can be used within a promotional package and now consumer see a message differentiating how much voice, SMS, WhatsApp and Facebook data they may use.

Consumers must react to this back-door introduction of Differential Data Pricing and insist CRAN as the regulator brings MTC to book.

Why is it important to have an open field of how a consumer uses their data?

  1. Users should be guaranteed equal access to any website they want to visit regardless of how they connect to the Internet. 
  2. Letting Telcos define the nature of access means they and not the user, shape the users Internet experience.
  3. "We can’t  create a two-tier Internet – one for the haves, and one for the have-nots. We must connect everyone to the full potential of the open Web."
  4. In India it was found that, "Had differential pricing been officially legalized, it would have adversely affected startups and content-based smaller companies, who most likely could never manage to pay higher prices to partner with service providers to make their service available for free. This would have paved the way for tech-giants like Facebook to capture the entire market."

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