What U.S. Policy Makers Need to Know About Free Basics

Providing Internet service should not endanger competition and user choice, particularly when it is targeted at underserved and marginalized user groups. But Free Basics realizes the greatest dangers of zero-rating and does exactly that. Free Basics in the U.S. would give Facebook—a private entity with no public mandate from citizens—the ability to decide the content and websites to which low-income and rural Americans should have access.

Based on its performance in other countries, there is no reason to believe that Free Basics will address the “digital divide” among American citizens. Instead, the evidence points to Free Basics exacerbating existing digital exclusion and leaving its users with the same problem they started with: scarce, unreliable, expensive access to the open Internet.

Free Basics is not “free Internet access.”

Free Basics is a zero-rated app—that is, certain Internet service providers partner with Facebook to give users free access to the app’s suite of content without digging into their data plan. Although it is country-specific, Free Basics content typically includes news, health, weather, and education—and, of course, Facebook itself.

This is not “free Internet access." More accurately, Free Basics offers free access to some Internet content on some carriers. This distinction is crucial. For users without fast, reliable coverage already available in their area, or users who do not use a carrier that partners with Free Basics, the offer of free content from Free Basics is useless.

Free Basics comes with a rocky international track record.

Launched in July 2014 as part of Facebook’s international initiative to connect “the next billion” to the Internet in developing countries, the Free Basics app has expanded to 49 countries—and regulatory responses have varied. The app has been specifically outlawed in India and Chile, and suspended in Egypt. In India in particular, a strong entrepreneurial community led the charge against the prospects of Free Basics’ deleterious effect on competition for smaller local start-ups. Now, Facebook appears to be fleeing controversy abroad in the hopes of a friendlier regulatory outlook at home.

Free Basics will not save Americans money.

Facebook’s international Free Basics initiative is often justified by the “on-ramp” argument. The idea is that selectively subsidizing mobile data for low-income, previously unconnected users will jump-start their awareness of the Internet, prompt them to buy larger data plans, and ultimately act as an “on-ramp” to bring more people onto the open Internet. This claim is often bolstered with an unsubstantiated statistic that 50% of Free Basics users pay for data within 30 days of first using it.

But this argument doesn’t hold up in practice. The American version of Free Basics would propose to serve rural and low-income Americans for whom high data prices are an insurmountable barrier to getting online. The “on-ramp” justification for this is that exposure to an application like Free Basics will inspire them to buy more data—the very data that was restrictively expensive to begin with. Free Basics will not save communities money in the long term. In the short term, it only distracts attention away from the bigger challenge of developing the local infrastructure needed to achieve sustainable Internet prices.

Free Basics does not solve the right problems—and it creates new ones.

Free Basics addresses only one barrier to Internet adoption and use: cost. Cost is no doubt a significant issue—but it is not the only barrier Americans face to digital inclusion. National disparities in connection speed, signal stability, education, and digital literacy all play a role in creating these digital “haves” and “have nots.” Pew Research finds that a third of non-Internet-using Americans did not go online because they did not think the Internet was interesting or relevant to them, and another third found the Internet too difficult to use. In comparison, the cost of Internet service or owning a computer was a deciding factor for only 19% of non-users. Instead, demographics are key: the groups least likely to use the Internet in America are seniors over 65 years old, and those with less than a high school education.

Free Basics may exacerbate these existing demographic inequalities, creating a “poor Internet for poor people.” Free Basics offers a truncated version of the Internet that disincentivizes exploring beyond the services offered for free; that is no solution to the problems of interest and digital literacy that stand in most American non-users’ way. Presenting a cost-oriented initiative like Free Basics as the solution does not capture the complexity of Internet inequalities, and risks exaggerating the depth of understanding we have about how and why some Americans are systematically excluded from Internet participation.

Users at home and abroad prefer the open Internet.

Users’ preferences are diverse and unique, and zero-rating schemes like Free Basics tend to not address them.

Internationally, the Alliance for Affordable Internet’s eight-country study on emerging mobile data models in developing countries—including Free Basics—found the vast majority of users preferring access to the full Internet, even when it came with limitations like a data cap or a steep price, over access to some of the Internet without any of those limitations. Studies in India [PDF] and Ghana independently confirmed this finding. Across the countries where Free Basics has already launched, users would rather pay for an all-access plan than get limited access like Free Basics for free.

In the U.S., user preferences are similarly incompatible with Free Basics—in particular, incompatible with a model in which only certain pre-approved applications are zero-rated. A recent study on alternative zero-rating models found that American users were interested in zero-rated services in general, but they did not agree on which services should be zero-rated. Many wanted popular services like Netflix and Instagram to be zero-rated, but even more preferred zero-rated access to more obscure, low-traffic, niche sites and applications. With these varying user preferences and interests in mind, the one-size-fits-all “walled garden” of Free Basics cannot adequately serve diverse users.

The bottom line: let users choose, not Facebook.

If carriers engage in zero-rating programs at all, those programs should be narrowly tailored to address pressing access problems. A program broadly conceived for developing country audiences, but now potentially deployed to domestic users, does not fit that bill. Even more importantly, carriers should use zero-rating models that allow users and edge providers, not carriers or Facebook, to decide what content gets zero-rated.

Read more https://www.eff.org/deeplinks/2016/10/what-us-policy-makers-need-know-about-free-basics