Free Broadband from Facebook

freebasics_facebook_thumbFacebook is talking to the FCC about launching a free Internet service in the US. This would provide a subset of the Internet for free to anybody with a smartphone and would provide such things as news, health information, job sites, and of course Facebook.

This would obviously benefit many people that can’t afford access to the web. Today the national broadband penetration of households that have some kind of access to the web is around 82%. Some of those without broadband live in rural places that don’t have access. Some don’t want Internet access. And the rest would like web access but can’t afford it.

Facebook has launched a similar product around the world in 53 emerging markets in the Middle East, Asia Pacific and Latin America. This is offered under the name Free Basics.

But the free product ran into problems and has been banned in India due to the fact that it violates net neutrality. The Indian net neutrality laws aren’t too different than our own laws and the service is what called zero-rated, meaning that any use of this plan is not counted against a data plan from a participating ISP.

In India the biggest complaint about the product was that it was restricted only to those things that Facebook wanted customers to see and not to the wider Internet. But in Facebook’s favor, it was free.

For this to work in the US, Facebook will need to find a US cellular partner which would not count usage of the app against a data plan. I recall that Facebook was close to this a few years ago in a partnership with T-Mobile that would have provided free access to a suite of products called GoSmart.

But more importantly, Facebook needs to convince the FCC that this is not a violation of net neutrality. The FCC has not formally made any pronouncements about zero-rating of wireless content, but it has talked to the major wireless carriers about the zero-rating they are already doing today.

This is the kind of situation that is really tough for regulators. With this kind of product Facebook could be providing some sort of free access to the web for millions of people in the country that might otherwise not have it. Even if it’s a scrubbed and sanitized piece of the web, it’s hard to find anything wrong with the results of that. People could buy a smartphone with no data plan and have access to parts of the web.

But the downside to the FCC is the same one faced by the Indian regulators. Once you let Facebook do this then the genie is out of the bottle and there doesn’t seem to be any way that the FCC could stop other kinds of zero-rating.

The dilemma is that Facebook is not quite like other companies. I am sure that somehow this isn’t costing Facebook too much and they might even make a little money from the idea. But Mark Zuckerberg seems to be on an altruistic mission to bring broadband access to the whole world. He has already used this idea to bring free broadband to many millions, and his goal is to bring it to billions.

But even with the altruism, this has certainly been good for Facebook – they had 1 billion users in 2015 and are now are reported to have over 1.7 billion users. That’s a lot of people to advertise to and to gather data from, which is how Facebook makes its money.

And of course, no matter how altruistic Facebook might be, nobody would expect the same motives from other large companies like Comcast, AT&T or Verizon. One of the main fears that drove the creation of net neutrality is that we could end up with a web that is filtered by the biggest ISPs and that the openness of the web would be killed by deals like the one Facebook wants to do. The web brought to you by Comcast is not the same web that we know today – and I think it’s a web that we don’t want as a society. But if we take the first step and let a big company like Facebook filter the web, we could be headed down the path where almost all future web access is filtered.

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