India Bans Free Basics on Facebook and other Mobile Services
Free Basic as Facebook, the zero-rated mobile service of the company, has been coming under fire in the Asian country of India over the violations of net neutrality, and now the regulator in the country has spoken about the issue.
Companies found in violation of the new laws will be given a fine of about $740 per day with a maximum of 5 million rupees. It also noted that regulations will not be in place two years but the company may be open for a review.
Those numbers are quite negligible for the social network, which has invested many millions into the program, but it is a crucial victory for public opinion against the company that is currently at stake.
FreeBasics is a strategy that Facebook has to build its user base through developing parts of the world through teaming up with carriers across the local markets to give access free to specific sites, such as Facebook, through a group that it founded named Internet.org. Facebook, in India, was working together with Reliance Telecom to offer this service.
The ban on Monday comes after a TRAI or temporarily banned service last December.
To be fully clear, the announcement and the broader report that lays out its conclusion in a more detailed manner does not single out FreeBasics or Facebook by name. However, it was the emergence of the program that had caused the outcry and had prompted the regulator’s investigation.
The new regulations, in addition, outline the essentials of what is FreeBasics, as the type of service that is no longer going to be allowed.
The ruling has come after TRAI opened consultation with stakeholders during December and a forum to discuss the regulations in January.
While it could be a victory for supporters of net neutrality, others might view it as a step back from the broader growth of usage of smartphones in the country where a large number of the population cannot afford the services without some form of subsidies.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.