The Telecom Regulatory Authority of India (TRAI) has barred telecom service providers from charging differential rates for data services, effectively prohibiting Facebook’s Free Basics and Airtel Zero platform by Airtel in their current form. TRAI said a fine of Rs. 50,000 would be levied per day, subject to a maximum of Rs. 50 lakh, for any violation of these regulations by the service providers. An exemption, however, has been made for offering emergency services.

The authority also prevents service providers from entering into any arrangement or contract that has the effect of discriminatory tariffs for data services. The regulations come into effect immediately. The authority may review the regulations after a period of two years.

This is a major setback for Facebook’s Free Basics service, and its high voltage campaign, which provides free access to select content. In its regulations, TRAI has made it clear it “providing limited free data that enables a user to access the entire internet is not prohibited.“

While the move was cheered by Net Neutrality activists and industry bodies such as Nasscom and IAMAI, telecom operators, who had been pushing for allowing of differential tariff for data service, expressed disappointment saying the ruling would impact the Narendra Modi government’s ambitious Digital India initiative.