Facebook: 0, Net Neutrality: 1

The Indian telecom regulator dealt a blow on Monday to Facebook Inc.'s controversial Free Basics online access plan by banning Internet service providers from offering customers preferential tariffs  to access specific content, upholding the norms of net neutrality.

Net neutrality says that all Web traffic should be treated equally and technology companies cannot be allowed to price certain kinds of content differently from others. Facebook's Free Basics plan would violate this principle as it offered access to parts of the Internet, including its social networking site, free and without a data plan.

On Monday, the Telecom Regulatory Authority of India banned all Internet service providers, including telecom operators, from offering discriminatory tariffs for data services based on content. Service providers that violate these rules will be fined Rs.50,000  (or $735) per day upto Rs.5 million (or $73,585). TRAI said it may review the rules after two years.

The ruling is the latest in an ongoing battle between advocates of net neutrality and some telecom and Internet service providers.

In a post to his Facebook page on Monday, Zuckerberg wrote, “While we’re disappointed with today’s decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world. Internet.org has many initiatives, and we will keep working until everyone has access to the internet."

Those against the Free Basic program included not only net neutrality activists, but several India start-ups as well including e-commerce site Flipkart and payment services company Paytm, which had declined to make their services available with the Free Basics platform.

Commerce minister Nirmala Sitharaman tweeted Monday night "Welcome TRAI's decision on differential pricing. Favours open and equal Internet."

Facebook founder Mark Zuckerberg launched Free Basics in 2014 as a plan to allow poor people to access the Internet for free. It is available in 30 countries. In India the company has tied up with Indian billionaire Anil Ambani's Reliance Communications Ltd. In the last few weeks Facebook launched a high profile, and expensive, campaign to advocate its cause with full page ads in several newspapers. But it was slammed by critics as an effort to become a gatekeeper to the Internet.

In December, in the face of the severe backlash, TRAI ordered the company to put its Free Basics plan on hold, pending a review. That decision was made yesterday.

India is Facebook's second largest market by the number of users. With some 300 million mobile Internet users expected to be on board by 2017, it's a big market for companies in that business.

Monday's decision could also be a test case for other emerging markets where programs similar to Free Basics are pushed as a way for the poor to come online.

The battle's not over yet.