Facebook's Internet.org connects 9M people, but net neutrality questions lead to 'Free Basics' name change

Facebook's (NASDAQ: FB) Internet.org continues to work to connect more and more people across the globe to the Internet -- according to the Wall Street Journal, more than 9 million people across the world have connected to the Internet through the program -- but that effort is now running into some static. Specifically, Facebook has changed the name of the program to "Free Basic by Facebook," likely to address concerns over whether the program runs afoul of the principles of net neutrality.

Facebook and partners including Qualcomm (NASDAQ:QCOM), Samsung and Ericsson (NASDAQ: ERIC) launched Internet.org around two years ago. The program attempts to offer free Internet access to a handful of services, including Facebook, on feature phones and smartphones, with the goal of getting users to see the value of those Internet connections and then getting them to pay for wireless access to the full Internet. The program is currently running across 19 countries where Internet access is not widespread, including India and Indonesia.

However, as the WSJ points out in a lengthy article about the program, it has fallen under concerns that it violates the spirit of net neutrality because it only offers free access to a handful of services. For example, a travel website and two news services pulled out of the program in India earlier this year over just that issue, the publication reported.

Likely as a result, Facebook said late last week it would change the name of the Internet.org app and mobile website to "Free Basics by Facebook" in order to set it apart from the company's wider Internet.org program. A Facebook representative told the WSJ that the change was intended to "more intuitively describe the product to consumers."

Facebook CEO Mark Zuckerberg said earlier this year that those operators that have participated in the Intenet.org effort have been able to grow their revenues and customer base by offering a free tier of service that includes access to Facebook. Further, he said, carriers participating with Internet.org have not lost revenues to customers who previously paid for access to Facebook but then stopped paying in order to take advantage of the operators' free tier of service. "Will these people who are already paying move to this trimmed down service? The answer is basically no," Zuckerberg said at the time.

Christian De Faria, CEO of African operator Airtel, said earlier this year that the Internet.org free tier of service "has been a retention tool and acquisition tool," and that it has not cut into the operator's data revenues. "I have not seen any negative impact -- so far," he said.

This weekend, Facebook's Zuckerberg announced that his company would help the United Nations bring Internet connections to refugee camps, though the company has not provided details on its plans. "It's not all altruism," Zuckerberg told the New York Times. "We all benefit when we are more connected."

For more:
- see this NYT article (sub. req.)
- see this WSJ article (sub. req.)

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