Declaration Regarding Differential Pricing for Data Services

Wed Dec 30 13:30:39 UTC 2015
By Dr. Jeffrey A. Eisenach

Facebook, Inc. engaged NERA to conduct an economic assessment of the issues raised in the Consultation Paper on Differential Pricing for Data Services issued by the Telecom Regulatory Authority of India on 9 December 2015 (“Consultation Paper”). The Consultation Paper raised certain questions about the use of differential pricing by Telecom Service Providers. In his declaration, NERA Senior Vice President Dr. Jeffrey A. Eisenach provides an assessment that is consistent with the benefit-cost framework put forward in the Consultation Paper, finding that like many forms of business conduct in markets involving the Internet ecosystem, differential pricing has the potential in the abstract to have both positive and negative effects. The actual effect of such practices depends on the specifics of the practices themselves and on the market context.

Following an examination of both the practices and the markets at issue here, this declaration concludes that the potential benefits of the differential pricing practices discussed in the Consultation Paper exceed any potential costs, and accordingly that such conduct should not be prohibited or proscribed.