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Is Facebook Free Basics set for US launch?

Social media giant may run the gauntlet of tough net neutrality laws to bring its zero-rated services to rural Americans

Facebook has run into so many problems with Indian net neutrality laws, in trying to introduce its ‘Free Basics’ program, that a US launch for the low cost service might seem a bridge too far. However, the social media giant is reported to be planning to bring Free Basics to the US, positioning it as a way to accelerate the extension of affordable internet access to rural and underserved populations.

These underserved groups might be far smaller than in India, but they still represent a potential new user base for Facebook and its services. If it can establish its own brand as the primary one in new users’ minds, it can seize an advantage, when it comes to uptake and customer awareness, over mobile operators, and over rivals like Google, which is also investing heavily in bringing access to the next billion.

However, while Free Basics might please rural consumers and their advocates, which have seen many universal access programs become delayed or watered-down, it is almost certain to fall foul of the newly amended net neutrality laws, which have taken one of the toughest stances in the world on this issue. That stance might have been intended to control the power of the telcos and MNOs, to favor one internet service over another, but it could work against Facebook too.

Free Basics is delivered in partnership with wireless operators and it offers a set of core services on a toll-free basis (not counting towards the subscriber’s data limit). The services include Facebook itself, of course, plus online news and various other information services. The idea is to bring a basic service within the reach of almost anyone, while encouraging those with more income to increase their usage and their data limits.

The social giant has been in talks with MNOs and US government officials for months, according to The Washington Post, over ways to roll out the program and be acceptable under the neutrality laws which were confirmed earlier this year.  But the FCC may find itself torn between these rules, and its support for affordable rural access.

In India, earlier this year, the regulator decided that the zero-rating mechanism of Free Basics was a “discriminatory tariff” that incentivized users to favor certain services – those which worked with Facebook – and so gave the social company a ‘gatekeeper’ role in steering web usage.

One route for Facebook, the Post suggests, will be to partner with smaller and rural operators rather than the big four, so that its service can be seen as a way to boost the competitiveness of the smaller MNOs while extending access to the underserved. But there will always be the danger of sleeping with the enemy – any operator partner might gain new traffic and customers from Facebook’s branding clout, but they are also in danger of surrendering the primary subscriber relationship to the web giant.

Telecom analyst Craig Moffett told the Post: “There’s a bigger question of opening a Pandora’s box. 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].”

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