India
introduced rules on Monday to prevent Internet service providers from having
different pricing policies for accessing different parts of the Web, in a
setback to Facebook Inc’s plan to roll out a pared-back free Internet service
to the masses.
The new rules came after a two-month long
consultation process that saw Facebook launching a big advertisement campaign
in support of its Free Basics program, which runs in more than 35 developing
countries.
The program offers pared-down Internet services
on mobile phones, along with access to the company’s own social network and
messaging services, without charge.
The service, earlier known as internet.org, has
also run into trouble in other countries that have accused Facebook of
infringing the principle of net neutrality – the concept that all websites and
data on the Internet are treated equally.
Critics and Internet activists argue that
allowing access to a select few apps and Web services for free would put small
content providers and start-ups that don’t participate at a disadvantage.
“While disappointed with the outcome, we will
continue our efforts to eliminate barriers and give the unconnected an easier
path to the Internet and the opportunities it brings,” Facebook said in an
emailed statement.
On Monday, the Telecom Regulatory Authority of
India (TRAI), which had suspended the free Facebook service pending a policy
decision, said Internet service providers would not be allowed to discriminate
on pricing for different Web services.
“Essentially everything on the Internet is
agnostic in the sense that it cannot be priced differently,” TRAI chairman Ram
Sevak Sharma said at a news conference.
Although the new rules will also have
implications for plans by Indian telecom operators to make money from rapidly
surging Web traffic through differential pricing, Facebook’s campaign turned
the spotlight on the social networking giant.
Free Basics is part Facebook’s ambition to
expand in its largest market outside the United States. Only 252 million out of
India’s 1.3 billion people have Internet access.
“We are delighted by the regulator’s
recognition of the irreversible damage that stands to be done to the open
Internet by allowing differential pricing,” said Mishi Choudhary, a New
York-based lawyer who led an online campaign against Facebook.
Facebook shares were down 2.7 percent at
$101.30 in early trading on the Nasdaq amid broad weakness in U.S. markets.
(Reporting by Sankalp Phartiyal; Writing by
Himank Sharma; Editing by Sumeet Chatterjee, Mark Potter and Ted Kerr)
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