Facebook’s Free Basics hits snag in India

by Prasad Krishna last modified Feb 15, 2016 02:33 AM
Indian regulators have dealt a major blow to Facebook’s controversial Free Basics online access plan by forbidding so-called differential pricing by internet companies, in effect banning the programme in the country.

The article by James Crabtree with additional reporting by Tim Bradshaw was published in Financial Times on February 8, 2016. Pranesh Prakash was quoted.

Free Basics, a plan to make access to parts of the internet free, has been at the centre of a fierce row in the country between the social network and local start-ups and advocates for net neutrality — the idea that all web traffic should be treated equally and technology companies should not be allowed to price certain kinds of content differently from others.

Last December, the Telecom Regulatory Authority of India ordered Facebook to put its Free Basics programme on hold pending a review.

On Monday, Trai published the results of its deliberations, introducing a complete ban on any form of differential pricing.

The ruling is the latest in a series of regulatory battles pitting net neutrality campaigners against telecom and internet companies, and is likely to be viewed as a test case for other emerging markets in which programmes similar to Facebook’s are yet to be challenged in the courts.

It also marks the most significant setback yet for Free Basics, which Facebook founder Mark Zuckerberg launched in 2014 as the centrepiece of plans to help poorer people access the internet in emerging economies. It operates in more than 30 countries.

Facebook had launched a high-profile public campaign to defend its programme, which offered stripped-down access to sites such as BBC News or Facebook’s own app to customers of Reliance Communications, the US company’s local telecoms partner.

But critics attacked the programme as an attempt to become a gatekeeper for tens of millions of internet users.

In a post to his Facebook page on Monday, Mr Zuckerberg said the company “won’t give up on” finding new ways to boost internet access in India.

“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,” he wrote.

Trai’s ruling was welcomed by anti-Facebook campaigners, a group that included the founders of many Indian start-ups including online retailers such as Flipkart, Paytm and restaurant search service Zomato, which had declined to offer their services as part of the Free Basics platform.

Analysts also hailed the Indian regulator’s ruling as a landmark. “This is the most broad and the most stringent set of regulations on differential pricing which exists anywhere in the world,” said Pranesh Prakash of the Bangalore-based Centre for Internet & Society, a think-tank.

India has become an increasingly important focus for the company’s global business, with the country becoming its second-largest market by users last year.