Facebook reportedly eyes bringing 'Free Basics' stateside, but net neutrality concerns loom

Image: Adnan Abidi/Reuters

Facebook is reportedly in talks to bring its “Free Basics” internet program stateside. But the program's tactics could threaten to pit two of the FCC's priorities against each other: Connecting rural Americans and maintaining net neutrality.

The company has been in talks with U.S. government officials and wireless carriers for months now, trying to determine how to best roll out the program, the Washington Post reported, citing unnamed “people familiar with the matter.”

Free Basics doesn't exactly deliver free internet. By partnering with wireless carriers, it allows users to stretch their data plans by offering certain internet services, such as Facebook, online news, job leads and health information, without it counting toward a user's data limit.

In the U.S., Facebook would seek to offer Free Basics to low-income and rural citizens, many of whom cannot afford to pay for high-speed internet service or large data plans.

In one sense, that goal would speak to the FCC's interest in connecting rural citizens. That's been a priority for the FCC in recent years, as it has pushed to open up spectrum and change state laws to connect such users.

On the other hand, the partnerships with big player wireless carriers through so-called “zero-rating” tactics could wind up violating another of Chairman Wheeler's tenets: Protecting net neutrality. Indeed, this is what killed Free Basics in India, where the country's national telecoms regulator ruled that the program infringed on net neutrality.

Though Facebook's CEO Mark Zuckerburg infamously asked “Who could possibly be against this?” India's regulator decided the zero-rating tactic amounted to a “discriminatory tariff” that incentivized users to use certain services – those that worked with Facebook. This would essentially allow Facebook to pick winners and losers, the regulator argued.

Neutral internet advocates have also criticized Facebook's plans for that reason. “Zero-rating is pernicious, unfair and unnecessary,” Susan Crawford, a law professor at Harvard who has advocated for strong regulation of the broadband industry, told the Post. She warned permitting the practice would enable “the gameplaying of companies who have a strong interest in maintaining the status quo.”

For the FCC's part, Chairman Wheeler told reporters last month that the Commission is still “trying to make sure we understand” the full implications of zero-rating.

“Things move at the pace that is appropriate,” he said, according to the Post. “I think we're doing a good job.”

According to the Post's anonymous sources, Facebook has sought to form relationships with lesser-known carriers in order to get in front of the impression that its service is anti-competitive. Thus, it has allegedly not attempted to strike deals with national carriers like T-Mobile or AT&T.

However, smaller carriers might have reason to be skeptical of the partnership. The FCC's deliberations around zero-rating could raise a partnered carrier's legal and regulatory costs, for one thing. And telecom analyst Craig Moffett told the Post carriers should also be wary of the deal's terms changing down the road.

“There's a bigger question of opening a Pandora's box,” Moffett said. “You'd have to be concerned that Facebook might ultimately usurp the customer relationship and, at renewal time, demand to be paid rather than just carried [by the wireless company]."

The ball is in the FCC's court, and whatever it decides on zero-rating will end up affecting the viability of Free Basics' arrival. If the FCC decides that the connectivity for rural Americans is worthwhile enough, it may try to find a path for the program to develop.

A representative at the FCC did not immediately respond to a request for comment.

For more:
- read the Washington Post report
- read this article at The Verge about India's Free Basics ban

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