Facebook's India stumble could embolden other regulators

Tue Feb 9, 2016 3:53pm EST
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By Jeremy Wagstaff and Himank Sharma

SINGAPORE/MUMBAI (Reuters) - India's decision to effectively ban Facebook's pared-back free Internet service is a major blow to the social network's plans, and may prompt other regulators to demand equal online access for their users.

Facebook will have to reconsider its approach in the light of India's new rules preventing Internet service providers from having different pricing policies for accessing different parts of the Web, analysts said.

"This is a major setback for Facebook," said Naveen Menon, lead analyst at A.T. Kearney in Singapore. "Not only because India was expected to be such a critical piece of the overall Internet.org success story, but more so because it has potential dangerous knock-on effects for the universal access initiative in other markets."

Internet.org is Facebook's umbrella initiative to bring Internet access to the unconnected. Part of that is the Free Basics program, which Facebook has launched in around three dozen emerging countries. The service has been criticized outside India, too, with Facebook accused of infringing the principle of net neutrality - the concept that all websites and data on the Internet be treated equally.

Critics and Internet activists argue that allowing free access to a select few apps and Web services disadvantages small content providers and start-ups that don't participate.

Ram Sevak Sharma, chairman of the Telecom Regulatory Authority of India (TRAI), told Reuters he hoped its ruling would clarify ambiguity about net neutrality and "that India has set the record straight that will be followed [the] world over."

In Facebook posts after Monday's ruling, founder Mark Zuckerberg said Free Basics was just one part of a larger initiative that includes solar-powered planes, satellites and lasers, and pairing with local entrepreneurs to provide wireless hotspots.

Expanding these approaches with or without the operators was one option for Facebook now, as well as legal workarounds where the service is repackaged, said Martin Geddes, a UK-based telecoms consultant.   Continued...

A motorist rides past a billboard displaying Facebook's Free Basics initiative in Mumbai, India, December 30, 2015. REUTERS/Danish Siddiqui