Facebook’s Free Basics could distort markets: World Bank

New Delhi: The World Bank has warned that services such as Facebook’s Free Basics, where some basic content is offered free and other content is subject to data charges, could lead to market distortions.

The recent trend to develop such services “would appear to be the antithesis of net neutrality and a distortion of markets”, said the World Development Report 2016, released on Wednesday.

The term Net neutrality was derived out of debates in the US about the bandwidth consumed by video downloads; network providers sought to charge higher rates for services chewing up more bandwidth while content providers wanted an “open” and “free” Internet where every bit of data was treated equally.

In other parts of the world including India, the debate over Net neutrality has been recognized as a matter of freedom of expression or access to information for individuals—a human rights issue, the report said.

“(Online) traffic management measures (by network operators so as to monetise content which uses higher bandwidth or to provide different content and services at different price points), while legitimate, should not reduce the enjoyment of fundamental rights and freedoms, particularly freedom of expression,” the World Bank report said. “In whatever form a country would wish to use the Internet for development purposes, its public policies should ensure that technical management of Internet traffic is not used.”

At the heart of the debate is Facebook’s Free Basics, which has been pitched as a means of extending Internet access in low-income countries for free. Net neutrality activists have argued that the practice can become an excuse to block certain traffic streams, content or expression, to give preference to others, or to impede competition.

Following Facebook founder Mark Zuckerberg’s visit to India in September 2014 when he met Prime Minister Narendra Modi, Internet.org—later renamed Free Basics—was launched in India in February 2015 in partnership with Reliance Communications Ltd.

The idea was to connect people to the social media network, as well as websites that provide content and services related to social issues such as education and health.

The move faced criticism because it offered free access only to select content, violating the principle of Net neutrality which holds that Internet providers should not discriminate between online data by user, content, site, platform, application, type of attached equipment or mode of communication.

In April last year, the Telecom Regulatory Authority of India (Trai) released a consultation paper on Net neutrality, which was followed by Bharti Airtel Ltd launching Airtel Zero, a marketing platform that allowed customers to access mobile applications for free but charged the application providers.

Amid growing concerns over Net neutrality, soon after the launch of Airtel Zero, online retailer Flipkart, which partnered with Airtel, walked away from the deal. This was followed by travel portal Cleartrip.com and media companies Times Group and NDTV pulling out of Internet.org. Trai, which has put Free Basics on hold, came out with a second consultation paper on Net neutrality and differential pricing on 9 December. The next step will be announced later this month.

According to the World Bank’s report, care should be taken to ensure that users have the greatest possible access to an open and free Internet, which is also a key contributing factor to innovation in the digital economy.