Author : Arun Sukumar

Expert Speak Digital Frontiers
Published on Jan 11, 2016
Unpacking Free Basics

In his monograph The history of computing in India (1955-2010), Prof. V. Rajaraman of the Indian Institute of Science notes the work of the Dandekar Committee on automation, a small, non-descript body set up by the Union Government in 1969 to assess whether computers would put Indians out of jobs. These were the heady days of socialism in India, but our computing sector was dominated then by one global giant: International Business Machines (IBM). IBM had a difficult relationship with the Indian government right from the days of Nehru and was battling a hostile regulatory environment with capital controls and local manufacturing requirements. But the straw that broke the camel’s back – leading eventually to IBM quitting India altogether for decades – was the Dandekar committee report. Egged on by vocal labour union representatives, the Committee recommended sweeping restrictions on the “use of computers in banks, government departments, private companies and insurance organisations”. Even Parliament was convinced that the introduction of computers would “increase efficiency”, but opted against the “social cost of computerization”. Never mind that this social cost was not ascertained on the basis of evidence and best practices in comparable jurisdictions. The government was simply swung by rhetoric and polarised debate, in effect, setting back India’s technological leap irreversibly.

And so, history repeats itself. We are today in the middle of a heated, shrill debate on the future of Free Basics, a platform devised by Facebook for free “access to useful services on mobile phones in markets where internet access may be less affordable.” The debate on Free Basics, which is part of a larger conversation on net neutrality in India, has been polarised by extreme opinions. Some have argued for a complete ban of the initiative, suggesting that Free Basics will be a walled garden that conditions access to information for millions of Indians. Nearly half of India’s population will be connected to the internet by 2018, so this is a legitimate concern. Others across the aisle view this as an “elite” argument, and see Free Basics as a tool to provide affordable access to first-time users, who can choose then to move beyond the initiative’s services. Both sides have galvanised their supporters into “DDoS-ing” the telecom regulator with comments during the public response period on differential pricing.

2016 is not 1969, and Facebook is not IBM. But the public policy questions around Free Basics -- affordable access, consumer choice, free speech, market competition and net neutrality – will determine India’s internet landscape for years to come. It is important that these decisions are taken after careful assessment of evidence both from India and abroad, indicated by behaviour from the market and consumers. We offer some markers for India’s regulators to assess to evaluate Free Basics:

Consider a “must-carry, must provide” rule

The “must-carry” rule, present in broadcasting rulebooks in India and the United States, imposes an obligation on cable television networks to carry public or local broadcasters. Its corollary, the “must provide rule”, requires channels to provide their content to all networks without discrimination. US law, for instance, stipulates that networks carry such content without any “material degradation.” In India, “it is obligatory for cable operators to carry 23 channels of Doordarshan including Kisan Channel, besides Lok Sabha and Rajya Sabha channels.” Were the “must carry, must provide” rule be transposed onto the Free Basics context, it would require Facebook to carry applications without discrimination on its platform. Conversely, internet applications would be platform-agnostic, providing the same content to Free Basics as they do to other such initiatives. The rule would provide a level playing field for emerging start-ups and local (language) content providers, who would have the same opportunity to feature on Free Basics as Facebook’s home-grown applications. With burgeoning applications to choose from, Free Basics consumers would also stand to benefit. The “must-provide” rule ensures “app neutrality”, and the unhindered access to applications will promote competition among zero-rating platforms. Qualitative standards can be enforced by the zero-rating platform but evaluated by the regulator.

A regulatory commitment to free speech

The current conversation is fixated on Free Basics and the role of Facebook, but zero-rated programs can assume several models with varying effects on speech, expression and access to information. But to move the net neutrality debate forward, India’s policy makers and regulators should address a fundamental question: are rights held by Indian citizens offline guaranteed in online spaces as well? If yes, what form do they take? This question has been flagged by the UN General Assembly, and more recently at the UN High Level Meeting to take stock of the World Summit on Information Society (WSIS) goals. The WSIS document is instructive – it recognises that “ICTs have shown their potential to strengthen the exercise of human rights, enabling access to information, freedom of expression <...>”. The document also suggests that the free flow of information of knowledge can take place through 9 distinct policy interventions, all of which are directly relevant to the Free Basics and net neutrality debates.

1. Open access to data

2. Fostering of competition

3. Creation of transparent, predictable, independent, and non-discriminatory regulatory and legal systems;

4. Proportionate taxation and licensing fees

5. Access to finance

6. Facilitation of public-private partnerships and multistakeholder cooperation

7. National and regional broadband strategies

8. Efficient allocation of spectrum

9. Infrastructure sharing models

Unfortunately, the Indian regulatory system is ill-equipped to handle any of these concerns. Sans a regime for spectrum sharing, open access, or even effective anti-trust regulation, net neutrality will remain a mirage. Opponents of Free Basics argue that the programme limits access to information, and hence free speech. Others view affordable internet access as a means to an end – it offers a platform (albeit qualified) without which many Indians will have no avenues to express or access information. Both these arguments seem intuitively appealing, but there is no policy evidence or regulatory yardstick to measure their effectiveness.

Skip the development kool aid

Whatever Free Basics may claim to offer, it is first and foremost an initiative advanced by a for-profit, multinational corporation. Free Basics may bear intended or unintended benefits in terms of connectivity and affordable access, but it cannot be evaluated on the mantra of development. In the short term, regulators should assess Free Basics on three simple questions:

1. Has it limited or facilitated the entry of new data-farming platforms in the market?

2. Does it discriminate between internet applications, especially local language content and emerging start-ups?

3. Has it restricted or broadened consumers’ choice on e-services and applications?

Corporations do not set the development agenda, they are contributors to it. If civil society fears the kool aid doled out by Facebook on Free Basics, it only needs to look within to find blame. Without sophisticated regulators or a transparency regime in India to finance development projects, we have mostly relied on the largesse or initiative of corporations. Based on popular perception – usually moulded by public relations agencies -- we have painted corporations in broad brush strokes, either as evangelists or agents of doom. We simply do not possess the legislative or regulatory tools to draw corporations into investing in development projects, let alone assess their impact on the market. For now, it is Facebook’s word against the rest.

On the other hand, Free Basics could start a conversation on a whole host of issues relating to data protection and privacy in India. If Facebook intends to provide affordable access to Indians, is it not reasonable to expect the data farmed from Free Basics to stay in India? A project so patently in line with national goals of digital connectivity should also provide Indians with legislative agency to secure their data. Localising Free Basics would also offer an incentive for the Indian government to provide through this platform critical services that involve sensitive data of citizens. If, however, Free Basics is rolled out into Indian markets, no services or websites that handle sensitive personal data of Indian citizens should be allowed to operate on the platform. No such allowance should be made until the Facebook servers that this personal data is routed through are relocated to India. This may prove to be the essential push that gets Indian lawmakers to finally legislate on data security.

Assess through empirical evidence

Assessing empirical evidence of Free Basics’ impact on the market – both on competition and consumer choice – is not easy. But in the absence of precedent, either in India or comparable jurisdictions, there is little choice. Regulators could recommend that Facebook deploy Free Basics for a limited window – say, 6 months – in line with the “must carry, must provide” rule. At the end of this “trial run”, the programme would automatically be rolled back, providing both regulators and researchers with valuable data to assess its impact on connectivity, consumer choice and competition.

What would a golden median on the Free Basics debate look like? First, the must-carry, must provide rule will create an incentive for local language content producers to feature their apps on zero rated platforms. The government should promote platforms that host government-owned e-services and local content. Second, the Free Basics debate must not be confined to one of access to information alone, but also the integrity and security of data that it farms from Indians. Third, the fate of Free Basics should be determined by evidence. Cutting-edge scholarship on zero rated platforms from the Netherlands and Chile has drawn on empirical methods to produce surprising results. The regulatory landscape in India may not be analogous, but data-driven analyses offer a great opportunity to evaluate zero-rating on its merit. The Free Basics debate is a classic sign of the digital economy teething – how we respond will also determine its forecast for decades to come.

With inputs from Bedavyasa Mohanty, Researcher, Cyber Initiative

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