Facebook mulls reset of Free Basics after India ban

Facebook’s plans to offer free but limited Internet service in developing countries hit a significant roadblock this week, when India’s telecoms regulator ruled to ban its Free Basics program – which grants users free access to Facebook and a handful of its chosen partner sites – from operating in the country.

Monday’s ruling, which will shut Free Basics out of India’s massive and largely untapped market, is a major victory for advocates of net neutrality, the principle that all Internet services must be equally accessible to all users. Spearheaded by a grassroots campaign known as Save the Internet (STI), India's startup and digital advocacy communities have deemed Free Basics an exploitative ploy to create more Facebook users while simultaneously edging out the social network’s competitors, which are only incorporated as partners to the program based on closed-door deals dictated by Facebook.

In an open letter to India's regulatory agency, TRAI, in advance of the ruling, STI had argued that any manipulation of Internet accessibility by a major corporation will stifle innovation online and place India's digital future in the hands of an American corporation.

TRAI recognized those arguments in its ruling Monday, announcing a new regulation that prohibits “discriminatory tariffs” imposed by Free Basics and other so-called "zero rating" services, in which companies compensate the Internet service provider for traffic to certain URLs. According to a copy of the ruling posted to the TRAI website, regulators said they were "guided by the principles of net neutrality," and that their decision will "ensure that consumers get unhindered and non-discriminatory access to the [I]nternet."

The decision by regulators in the nation of 1.3-billion people could set an influential precedent across the globe. Echoing widespread concerns by net neutrality advocates, TRAI argued that allowing Facebook to offer users free access to certain services fundamentally altered the open Internet principles credited with fostering the growth of innovative startups – such as Facebook itself – allowing them to compete for users on a level playing field with major corporations. As STI put it in a statement, TRAI on Monday put “an end to differential pricing services which would have allowed telecom operators to break the Internet and become gate-keepers and toll-collectors.”

Though Free Basics has already helped 18 million people globally get online, Monday's ruling will call into question Mark Zuckerberg's ambitions of connecting upwards of one billion more. It is also a major setback for Zuckerberg personally, who has staked his philanthropic reputation on the fight for Free Basics in India. After TRAI suspended Free Basics in August and announced it would be reviewing the legality of zero rating services, Zuckerberg wrote an opinion article in the Times of India that touted the service as a helpful solution to India’s meager Internet penetration — only 15 percent of the population has access — that would help close the digital gap between rich and poor. “To give more people access to the Internet, it is useful to offer some services for free," he wrote. "If you can’t afford to pay for connectivity, it is always better to have some access and voice than none at all.”

Though Facebook officials acknowledge that creating more Internet users will necessarily be good for Facebook’s business, they have always described the program as at least partially altruistic. Zuckerberg adopted that tone in a post to his personal Facebook wall on Monday, saying he was "disappointed" but had no plans to abandon the mission "to make the world more open and connected." Internet access in India, he said, "can help lift people out of poverty, create millions of jobs and spread education opportunities."

Outside of India, the debate continues to rage over whether zero rating is an acceptable compromise to help close the Internet access gap between rich and poor — as Zuckerberg has always maintained. Jeffrey Eisenach, co-chair of the Communications, Media and Internet Practice at NERA Economic Consulting, argued in an analysis in December – at Facebook’s request – that the practice could indeed be good for India. Far from being an anti-competitive practice, Eisenach wrote, differential pricing “allows Internet services to be extended to a larger user base, thereby exploiting both supply- and demand-side economies of scale and scope and setting in motion a ‘virtuous cycle’ from which all market participants benefit.”

In his view, the TRAI ruling reflected an activist definition of net neutrality – a concept that he described to Al Jazeera as notoriously difficult to pin down. In the United States, for example, the debate revolves around concerns that Internet service providers (ISPs) will charge companies more for faster traffic – a practice Zuckerberg and other Silicon Valley chiefs staunchly oppose. The activists of STI accuse Zuckerberg of hypocrisy for his apparently contradictory stances on net neutrality in two different countries, but the Facebook founder argues giving people in developing countries some Internet access for free is a very different scenario. As Zuckerberg has written, Free Basics “doesn’t block or throttle any other services or create fast lanes – and it never will.”

Net neutrality advocates don't see this as a gray area, and argue the longterm consequences of differential pricing are always dangerous. Many, including Jeremy Malcolm, a senior analyst with the Electronic Frontier Foundation, said they hoped Facebook was, as Zuckerberg said, still committed to bridging the digital divide between rich and poor. Zero rating was simply "the wrong approach."

“The problem with Free Basics service was that it centralized control of the Internet with a single gatekeeper – Facebook and its partners – that introduced a whole range of problems, creating a new barrier to content providers that have to register with Facebook,” Malcolm told Al Jazeera. “That in turn creates a locus for control, for censorship, for privacy and security problems that didn’t exist on the open Internet.”

Rather, why not pivot resources towards offering some basic level of free, unrestricted Internet access to people in countries like India – rather than the "walled garden" activists consider Free Basics. Even if that scenario doesn't advantage Facebook to the same degree, Malcolm argued, “the more Internet users, the more Facebook users. So you achieve the same results without all the problems."