A response to Facebook’s “What Net Neutrality Activists Won’t Tell You”
By aggressively advertising ‘free basics’ in leading newspapers, and using rhetorical advertisements which are titled “what net neutrality activists won’t tell you or
the top 10 facts about free basics”, Facebook has confirmed that this is fundamentally a political struggle about the ownership and control over a fundamentally free
space or ‘commons’ called Internet. Facebook has made certain claims, so I would like to respond to Facebook’s argument point by point.
- The most basic of it all, nobody is going to be charged anything. Free really means ‘free’. Facebook produces no revenue; there are no ads in the version of
Facebook on Free Basics.
–> Nobody is going to be charged. Does free really mean ‘free’? Monopolization itself means that huge social costs are involved in it. These social costs may not be
necessarily in the monetary or accountable form, but letting a private player decide the course of development of a free space such as internet and losing public
control over a ‘commons’ as a result of the growing monopolization is a huge social cost.
Growing monopolization provides the party involved with a very important capacity, the capacity to create artificial scarcity, which imposes huge social costs on the
There is always a struggle (or, at least a debate, which nonetheless reflects deeper antagonisms in the society) in the society over which spheres of life should be
allowed to be commoditized and which shouldn’t be. For example, even within capitalism, certain spheres of life are kept outside the ambit of markets and
commoditization. Commoditization and privatization of any sub sphere previously belonging to the public sphere reduces the public control over it on the one hand and
provides a handful of people an opportunity to become vastly wealthy at the expense of the wealth that belongs to the public. Growing monopolization of Facebook would
mean more commoditization of internet and lesser public control over it.
(For a detailed discussion, see http://monthlyreview.org/2011/03/01/the-internets-unholy-marriage-to-capitalism/)
- In this venture, Facebook is not limiting the possibility of other mobile operators joining hands with Facebook.
–> Facebook and mobile operators are joining each other because there are mutual gains in such a venture, but at the expense of the public wealth. We can call this
‘association for complementary monopolization’. A question can be raised, “what is wrong if they are gaining?” The real question should be, “who are going to be the
losers?” And this growing monopolization means, as in the case of all private monopolies, that the society at large is going to be the loser.
Also, when one operator joins Facebook, it automatically forces other operators to join so that they can compete with each other to exploit the possibility of
capturing the huge market. This means that Facebook becomes not only a monopoly social networking website, it also makes all the operators accept its monopoly, thereby
guaranteeing preferential treatment to Facebook and reduction in the possibility of the operators joining hands with ‘marginal’ social networking sites or start ups in
a similar way. So Facebook is rather revealing its innermost desire but posing it in a way that ‘sounds’ non-discriminatory.
- Facebook does not pay for the data consumed and operators participate because this brings more people online.
–> This point is tautological in nature. Of course, the operators want more people online, but without radical changes in the social structure or changes in the
highly unequal distribution of income and wealth. Also, they want to bring more people online without sacrificing their profit levels by bringing down the prices of
various services offered, which are decided by a cartel with players tacitly agreeing that the competition would take only ‘non-price’ form and prices would be
determined and varied in parity.
The internet diffusion rate in India has remained low (25 out of 100 people). Though there has been a modest growth in the number of internet users, it has not matched
the growth rate of mobile phone users. Also, 94% of the internet users connect through mobile phones. So, in such a situation, joining hands with Facebook, which would
work as an exogenous stimulus to the expansion of the market, seems the best way out of the impasse of low internet penetration. But a more fundamental question should
be asked, “Why is the internet penetration rate particularly low in India?” I believe that the demand side constraints are largely responsible for it.
(For data regarding internet diffusion, see http://www.epw.in/system/files/pdf/2015_50/51/Diffusion_of_Broadband_Internet_in_India_0.pdf)
- It is open to every kind of content development. No discrimination of any kind here, with subject to certain guidelines. And as a result of this, nearly 800
developers support Free Basics.
–> The debate regarding net neutrality and free basics is only partly related to ‘non-discriminatory treatment to all the content developers’. Content developers are
just one of the stakeholders, and rather secondary stakeholders, who wouldn’t care about net neutrality as long as they are ensured that they can publish and develop
So even if developers support Free Basics, they are indifferent between supporting and not supporting it, given their position in the game.
- When people are given an access to free basics, 40% of them shift to complete access to internet within 30 days.
–> Why don’t they ‘buy’ an access to the complete internet before they are given Free Basics? Some of them could really be ignorant about the usage of internet, but
that must be a very small percentage. Here, I believe, a vast majority of population do not buy complete internet access because they cannot afford to. According to a
survey conducted by Pew Research Center, 95% of Indians earn only 10 $ or less (180 rupees at PPP exchange rate) a day, which means 5400 rupees or less per month. We
can imagine what kind of internet service can be bought when a person gets 5400 rupees salary per month. So when 40% of them would shift to complete access to internet
(if at all!) after using free basics for only 30 days, they would do so with their spending on mostly essentials and necessities getting compressed.
Nonetheless, as Facebook is going to feature heavily in the usage of these ‘40%’ people even when they shift to complete access, the usage becomes profitable for
Facebook through posted ads and other marketing strategies. This happens at the expense of the compressions in the spending of a vast majority on essential
(For data on income and wealth inequality in India, see http://www.pewglobal.org/2015/07/08/a-global-middle-class-is-more-promise-than-reality/ and
- Free Basics is growing and popular in 36 countries.
–> Internet.org alias Free Basics are provided in 36 countries (mostly underdeveloped). This in itself doesn’t mean that it should be implemented in India. But we
should try and understand why Facebook is allowed to provide free basics in the underdeveloped world even though it violates the basic principle of net neutrality.
Within the present neo-liberal economic regime, capital is globalized. As a result, the welfare state which worked as an external stimulus during the ‘golden age of
capitalism’ is on the retreat. The welfare state is on the retreat because if the state starts playing the role of ‘welfare state’ by providing universal public
provisions of certain essential commodities and services (internet should be one of them!) and financing it by heavily taxing the rich, capital would flow out because
the state “interferes too much”. In this sense, the retreat of the welfare state is a direct consequence of the emergence of globalized finance capital. In other
words, in such a scenario, the state is internalized in the capitalist system and cannot play an important role of an ‘external stimulus’.
But the state wants to digitally literate this vast population, not because it must be considered a fundamental right, but because it would attract international
finance capital towards the internet literate and skilled but excessively cheap and politically unorganized labour reserves. The state realizes that making a majority
of population digitally literate would require huge finances but the state is not in a position to ‘heavily and progressively tax the rich’ to mobilize the finances as
it would scare away internationally mobile finance capital.
Now in this kind of an impasse, the only viable option in front of the state is to join hands with a private player, who would take the financial responsibility of
such an ambitious project but who also seeks certain long term advantages in doing so, in the form of private control over publicly owned resources and more
possibility of profit extraction and monopoly rent extraction etc.
In this sense, the governments of these nations are largely to be blamed because they substitute free basics provided by private players for the real public policies
which would expand the full internet access to everyone.
(For a discussion on neo-liberalism, see http://mrzine.monthlyreview.org/2015/patnaik170515.html)
(For data regarding the amount of revenue of the government forgone in the form of tax concessions, see
http://www.outlookindia.com/article/how-much-can-we-forgo-to-india-inc/291424 and http://www.outlookindia.com/article/so-richie-rich-have-another-one-on-us/293675)
(For a discussion about the falling tax to GDP ratio in India and concessions in direct taxes, see http://peoplesdemocracy.in/2015/0308_pd/budget-2015-16-bonanza-corporates)
- 86% of Indians have supported free basics. 3.2 million people have petitioned the TRAI in support.
–> This is where Facebook has won, of course by subverting the whole issue and misleading people. (In an ironical way, doesn’t this prove that being on Facebook does
not automatically make people internet literate? Also doesn’t this reveal the enormous power of Facebook to inform and influence people’s opinions, preferences, actions and decisions?)
- I think the principle of net neutrality and net equality must be defended at any cost. The principle states that those who control and own the physical network
should not discriminate between websites and services offered on internet. It is easy to see why this principle seems so problematic from the standpoint of the
internet monopolies and the telecom giants. In spite of the ‘well intended and benevolent attempt’ by Facebook to bring more people online, we should oppose it because
the exclusion of the principle of net neutrality from the legal framework regulating the telecom sector may give a vast population free access to Facebook right now,
but it will also allow the internet giants and owners of the physical network to use the principle of non neutral internet for monopoly rent extraction in future. The
integration of this fundamental principle in the legal framework regulating the telecom sector would keep internet free and independent from the interference of the
telecom giants and online monopolies such as Facebook and their possible rent seeking behavior in future. But this fight must be necessarily combined with a demand for
‘universal access to full internet as a fundamental right’.
PS: Not sure who wrote this