Indian Telecoms Regulator Effectively Bans Facebook's Free Basics Service -- Update
09 February 2016 - 1:18AM
Dow Jones News
By Sean McLain and Joanna Sugden
NEW DELHI--Indian telecommunications regulators on Monday
effectively banned a controversial Facebook Inc. program to let
people have free, but limited, use of the Internet, issuing rules
requiring companies to charge the same price for access to any
website.
Under the new regulations, Reliance Communications Ltd., the
mobile-phone service provider that is Facebook's partner in India,
can no longer offer the Menlo Park, Calif.-based company's Free
Basics. It also can't offer free access to Facebook's social-media
site.
"We have come to the conclusion that differential pricing is not
in the interests of consumers, or of the growth of the Internet,"
said R.S. Sharma, chairman of the Telecom Regulatory Authority of
India. The authority said its decision was "guided by the
principles of Net Neutrality."
A Facebook spokesman said the company was "disappointed" by the
ruling, and that Facebook would continue "efforts to eliminate
barriers and give the unconnected an easier path to the Internet
and the opportunities it brings."
A Reliance Communication spokesman couldn't be reached for
comment.
The decision was a setback for Facebook, which had waged a
vigorous and high-profile campaign to generate support for Free
Basics, which it said was designed to encourage people to use the
Internet. Free Basics offers Indian users free access to websites
that, among other things, offer job listings and sports scores, as
well as Microsoft Corp.'s Bing search engine.
For weeks, the company ran ads and encouraged backers to send
letters to the regulatory authority voicing support for the
program. The tactics drew a rebuke from the regulator, who accused
Facebook of trying to turn a "meaningful consultative
exercise...into a crudely majoritarian and orchestrated opinion
poll."
Mark Zuckerberg, Facebook's chief executive, wrote an opinion
piece published in a local newspaper that compared Free Basics to
public education and free libraries. "Who could possibly be against
this?" he asked.
But Facebook faced determined opposition from Indian startup
founders, who feared they could be left at a competitive
disadvantage, and net-neutrality advocates who argued that Facebook
and others shouldn't be allowed to play gatekeeper roles in
determining what Internet services people can access without
paying.
India is a high priority for Facebook. With 1.2 billion people,
India presents an important market for the social media site,
especially since access to Facebook is blocked in China. India is
already home to 130 million Facebook users, the second largest
population after the U.S.
Cellular service companies fought for the ability to offer
subsidized Internet access, but Monday's decision is unlikely to
damage their business. Falling smartphone prices have driven a boom
in mobile data usage in India, boosting profits.
"We are very disappointed with the ruling from the TRAI," said
Rajan S. Mathews, director-general of the Cellular Operators
Association of India, a trade group. Mr. Mathews said it would
examine the regulations before deciding whether to fight them in
court.
Write to Sean McLain at sean.mclain@wsj.com and Joanna Sugden at
joanna.sugden@wsj.com
(END) Dow Jones Newswires
February 08, 2016 09:03 ET (14:03 GMT)
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