November 21, 2017 17:15

Iran Regulator Introduces Internet Fair Usage Policy

Local Internet service providers are often criticized for high tariffs, abrupt disconnections and interruptions. The newly introduced scheme aims to expand access to the Internet while cutting costs

ISP services will be monitored by the CRA and companies that fail to comply with the new rules of their agreement with subscribers will be fined.

According to online database Numbero, Internet services in Iran are the 4th most expensive globally while speed is relatively  low compared to neighboring countries

In a move to expand access to the Internet, the Telecoms Ministry in collaboration with Communication Regulatory Authority has introduced a mandatory landline Internet Fair Usage Policy, which will be enforced from Dec. 1.

Telecom Minister Mohammad Javad Azari Jahromi has often censured local Internet service providers for their excessively high tariffs. “In establishing the new FUP system the interest of both consumers and businesses has been considered,” the ministry’s website quoted him as saying.

According to online database Numbero, Internet services in Iran are the 4th most expensive globally. This is while Internet speed is relatively low compared to neighboring countries and users often complain about disrupted connections.

Statistics released by the Internet World Stats indicate that some 57 million Iranian’s (70% of the population) have access to the Internet. This is while International Telecommunication Union put Internet penetration rate in Iran at 44% in 2015. The significant hike to some extent has been due to introduction of third and fourth generations of mobile communication technologies in Iran.

Through the newly introduced system Fair Internet Usage, or FUP, each landline ISP is required to announce a bandwidth cap for different Internet speeds before Dec. 1. A bandwidth cap, also known as a band cap or a data cap, is a limit imposed on the transfer of data over a network. Although often referred to as a “bandwidth cap”, it is not the actual bandwidth (bits transferred per second) that is limited, but the amount of data downloaded per month.

The minister says “If a user exceeds data cap the ISP henceforth cannot disconnect the user but is allowed to decrease the Internet speed to 128 Kbps and not lower.”

Even with the lowered speed users can access websites and online services with a relatively low, but acceptable, speed.

Furthermore, service providers should notify customers before reaching the cap. Users can pay additional fees to forestall the decrease in speed. For the ‘extra Internet usage’ ISPs cannot charge subscribers more than 20,000 rials (50 cents) per gigabyte. The current average price for each extra gigabyte of Internet usage is about 40,000 rials ($1).

One of the underlying reasons for introducing the Fair Internet Usage system is to help lift content delivery and production services. The content an average subscriber uses consists mainly of video files and the content producers income is often generated from advertisement embedded in the videos.

However, since the volume of data users are currently allowed to download is unreasonably low — 2-3 gigabytes per month — the content delivery and production services are disadvantaged.

Many ISPs in addition to Internet services offer content production and delivery services as well; this is likely to motivate them to support the new government scheme.

Through the scheme, a maximum monthly fee has been set based on Internet speed ranging from 125,000 rials ($3) for 512 Kbps services to 800,000 rials ($20) for a 16 Mbps connection.

ISPs have not yet announced the bandwidth caps. Earlier, the CRA deputy director Sadeq Abbasi Shahkoh suggested that the fair data cap for a 2 Mbps connection would be about 300 GB. According to the ministry, the service should not cost more than 250,000 rials ($6) per month. Even if the data cap is one tenth of the announced limit, many users will find the monthly charges reasonable.

Furthermore, ISP services will be monitored by CRA and according to Jahromi in case businesses fail to comply with terms of their agreement with subscribers, the ISP will be fined. One of the indicators that will be checked by CRA will be the agreed Internet speed. Internet speed should not be lower than what is mutually agreed and fluctuations of not more than 5% will be disregarded by the state regulator.

The new prices are significantly lower than what ISPs currently charge users in Iran. However, the new policy and the ‘fairness’ it promises cannot be judged before the businesses announce the data caps.