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 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.
Facebook could also challenge the ruling in the courts, but a more
likely move, said Marc Einstein, Asia-Pacific director at Frost and
Sullivan, would be to sit down with the TRAI "to try to come up with
a solution that's deemed a little more neutral."
Facebook executives were not immediately available for comment, but
India-born Karthik Naralasetty, whose blood donor matching service
Socialblood is available in more than 20 countries via Free Basics,
said Facebook was already re-thinking its approach.
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"Facebook is re-thinking what it's doing, coming up with better
plans," he said by telephone. "Communications will have to improve.
They have to get the buy-in of different governments before they go
into those countries."
FIGHT GOES ON
It won't be easy.
For one thing, said Neil Shah, a director of Counterpoint Research
in Mumbai, Free Basics made little headway in India before it was
suspended in December, gaining 1 million users. Only 252 million of
India's 1.3 billion people have Internet access.
Opponents of the service said they would continue to fight.
"Facebook is not going to take it lying down and they will try and
figure out a way for it to happen one way or the other," said Sachin
Bhatia, co-founder of Indian dating app TrulyMadly. "Our job is to
keep at it non-stop to ensure Internet freedom is not threatened."
Regional telecoms operators which partner Facebook, such as
Indonesia's PT Indosat, controlled by Qatar's Ooredoo, and Globe
Telecom in the Philippines, said the ruling would not lead them to
reconsider the partnerships.
"The Indian experience is very isolated," said Vicente Froilan
Castelo, general counsel of Globe Telecom.
(Reporting by Jeremy Wagstaff and Himank Sharma, with additional
reporting by Ruma Paul in Dhaka, Eveline Danubrata in Jakarta and
Neil Jerome C. Morales in Manila; Editing by Ian Geoghegan)
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