Why did India say no to free internet from Facebook?A common practice on the internet is for sites to provide new users with the option to sign up or log in by using their Facebook account. This is clearly because a very large portion of the internet population has a Facebook account.

Facebook is regarded as the largest and most popular social networking site in the world. To be precise, there are almost 1.6 billion active users on Facebook every month.

Moreover, according to a survey done by the Internet and Mobile Association of India along with IMRB International (a market research firm) in 35 Indian cities, out of 375 million internet users (figures reported at the end of October 2015) in India, there are around 130 million Facebook users.

In order to tap into the huge potential for Facebook usage in India, Mark Zuckerberg (founder and CEO of Facebook) was keen to offer India Facebook’s free version of the internet. This was offered as Facebook’s Free Basics program, for which Zuckerberg made huge claims at a town hall in Delhi in October 2015, speaking about connecting people and things in India and offering free internet access to the rural population.

The objective behind this free ISP app was to get more unconnected users online at no additional cost. According to Zuckerberg, internet connectivity in India is largely about understanding why it is available in the first place. He highlighted that one person gets a new job and one person is able to rise above poverty for every 10 people who have access to the internet.

Though there was a great deal of euphoria initially about Facebook’s free ISP app, however, the Narendra Modi government ultimately decide to ban it, earlier this year in February. Which raises an obvious question: Why? What loopholes were there in the app that the Telecom Regulatory Authority of India (TRAI), responsible for regulating all the telecom service providers, and the Indian government could not ignore?

Reasons for Rejecting Facebook’s ISP App

The zero rating scheme supported by the ISP app could potentially give more power to certain telecom operators and thus Facebook’s move to tie up exclusively with Reliance Global was initially opposed by some operators. And, with the presence of a highly qualified regulatory body like the TRAI, such threats would not be tolerated.

Despite the ISP app and internet.org being promoted as free to people who are not connected to the internet, it has been widely used in areas where Facebook made it available by people who already have internet usage plans with certain dedicated carrier partners. This meant that, while Facebook became free for certain carrier partners, people who were registered with other carriers had to pay to use the same.

Many users benefited from this gap to save costs on their data tariff plans. This defeated the whole purpose of Facebook’s free internet access initiative for first-time internet users, as many existing internet users started taking advantage of the limited carrier partner tie-up model. The TRAI could not approve such a model where certain providers were favoured over others.

Additionally, the major reason for the Basics app being rejected in India was its failure to fulfil the principle of net neutrality, which states that everyone must get equal access to all content (including websites) on the internet.

The tricky part about it was that it allowed free access to the internet only for a limited number of websites, with the prime focus being on free usage of Facebook. Thus TRAI banned the Facebook proposal because it did not offer equal access to all websites.

Could Facebook’s ISP App Have Benefited India?

Even though the Facebook ISP program offered free access to certain websites and services, it would have been more damaging than profitable for India.

Firstly, despite it encouraging non-internet users to use the internet, the users would only have been able to access limited sites and services. Thus, the majority of first-time internet users would not have been exposed to the true power of the internet, especially with its unlimited pool of resources, such as sites, apps and services.

On top of that, it would have created a “monopoly” scenario, where its users would only have access to certain sites for every category or industry. In a country like India where there has traditionally been so much division based on caste and religion, another divisionary model for website access would have been more damaging to the Indian mentality.

Moreover, as the Modi government has been supporting the Make in India initiative, there has been considerable growth of startups in India, especially with the eCommerce boom.

With users having free access to only a few sites, it would have been challenging for online startups to reach out to the majority of the population (as people would always prefer the free sites over sites that are accessible only using paid internet plans). Such a model had the potential to discourage innovation and the startup culture in India.

Changes Needed for the Indian Government to Accept the Facebook ISP App

Why did India say no to free internet from Facebook?As Facebook is such a massive tech giant, it would not sit idly by with this rejection of its free Basics app. It has to find ways to come back and convince the Indian government to go for this program. However, they would have to make certain changes to their proposal to get the nod from the Narendra Modi-led government.

For starters, they would need to get the support of all telecom operators in India by ensuring that they offer the ISP app through all of them and not just a select few. And, most importantly, they would also need to come up with a proposal that completely abides by the net neutrality principle of providing equal access to internet content.

To win the support from everyone in India, apart from focusing on internet access and affordability, Facebook will also need to focus on the speed of internet connectivity.

Industry experts don’t expect Facebook to give up easily. It will be interesting to see whether and how Facebook’s free Basics app finds a workaround solution to gain the approval from TRAI and the Indian government.