Poor People Of India To Zuckerberg: We Don't Need Your Economic Racism

Perhaps you've been following the news from the digital front in India - there's been a significant movement in support of net neutrality.

This is the concept that holds, among other things, that all bits and bytes should be treated the same on all telco and carrier networks, so that all users can have their experience of exactly the same internet, with no bias for or against any site for any reason - including payments by that site to the carriers for preferential access.

Over 750,000 emails have been sent by concerned citizens to the regulators, TRAI, from http://savetheinternet.in in the last week. This in itself is unprecedented.

Deep distrust of Zero, in the land that invented it.

One sidelight that has assumed much larger proportions now is the status of "Zero Rating" services. Simply put, these are products where a set of websites are bundled and users get to surf them for free, because the bandwidth in these cases is paid to the operator by the sites themselves.

Two of the more infamous zero offerings are Airtel Zero and Facebook's Internet.org. First, the Airtel offering, which has been trying to present itself as a "marketing platform for apps".

You might say, so what's the problem with that? Look at it this way - if internet access is offered for free, then one can assume that folks will rush to spend time there - and many of these folks will be the economically less-advantaged ones.

Once they log in, though, they'll end up seeing only a handful of sites that have typically paid a large chunk of money to be there. And those that have paid these placement fees essentially now sit at the 'front door' of the internet to these newbie users - and they will raise their prices to make back the hefty fees they've paid to get their prime spots. Also, from the user's point of view, there's no other part of the internet they can go to from here.

In every way, from exploiting the poor, to being a restrictive trade practice because start-ups won't have a chance to be discovered by users via word of mouth because they can't afford the placement fees, to simply denying the wonder and the width of the internet to the young and knowledge-hungry - this practice is terrible.

[Added Apr 18] For those who've written in to ask: hey, it's free - what can be bad about it? Here's my answer: Think of a large group of hungry people. And a government-owned food distribution network, licensed to a private operator, who charges people to deliver the food they order. And another private party wants to come in with a free offer (it's only free because they're paying the private operator to push it to the hungry people). And this is the offer: high-fructose corn syrup or french fries, all you can eat, and nothing else. Does the government have a right to step in and say - hey, my people deserve a balanced diet and the freedom to choose every part of it - this skewed offer forces them into making unnatural and perhaps unhealthy choices, so you can't do this? Yes, that's my point really.

And 750,000 people thought so too, to write to the government to stop it.

Both the Zero services - Airtel's and Facebook's - have had bad days lately, with Flipkart leaving the former and a line of Indian internet firms: Cleartrip, NewsHunt, NDTV and IndiaTImes (partly) leaving the latter.

Zuckerberg defends his apparent charity.

While the telcos - especially Airtel, hide behind their increasingly harried-sounding industry group COAI, Mark Zuckerberg of Facebook decided to go on the offence with an "editorial piece" in a leading newspaper where he tried to defend his product Internet.org as some sort of world-changing CSR effort born from the goodness of his heart.

Internet.org is slightly different from the Airtel product. While Airtel are open that they're launching Zero to make money because they say they don't make enough - last years' net profits of Rs. 9,500 crores (US$1.5 bn) notwithstanding, Zuckerberg is slightly more subtle - though he's doing it to vacuum up new users from the bottom of the pyramid for Facebook

Here's how the scheme works. Facebook approaches a telco - in this case, Reliance - and (correction here after clarification from Facebook:) pays to promote the joint offering to the public if the telco throws in the bandwidth costs of serving the Facebook site and a small group of other sites.

So when the poor, who in theory can't afford a net connection come to the Facebook Zero service confusingly called Internet.org - they're made to believe they're on the internet while in reality they're only on Facebook and a few hand-picked sites.

And the sites too are picked in secret under some unknown process. For instance, Facebook chose to offer the distant-second search engine Bing instead of industry-leading Google. Why? Is it rivalry with Google? Or because of Microsoft's stake in Facebook? And then Facebook's Zero product features a tiny job site like Babajob instead of the industry-leading Naukri. Why? So that the poor have fewer job options? No one knows. Facebook doesn't feature YouTube - the largest video site in the world and an immense education resource - (correction follows) or any videos at all.

My friend Nikhil Pahwa rips apart Zuckerberg's stand in his response, pointing out research after research that shows zero rating services around the world universally tend to do badly for the people who use them. It all seems to amount to economic racism - exploiting the poor in under-developed parts of the world to become your customers under the guise of some apparent charitable purpose. While offering them a shoddy, stunted version of the real thing. As a colleague, Vijay Shekhar Sharma of PayTM puts it: "It's poor internet for poor people".

In perfect irony, Zuck talks about seeing the wonder of a kid in a remote Indian village discovering the power of the internet. The upshot being that if Zuckerberg - himself a child prodigy - ever was brought up on internet.org, he couldn't have ever built a Facebook.

Internet Dot Org neither offers the internet to its users - nor is a dot org, denoting a charitable organisation. It just seems to be a cloaked proxy for the Facebook Economically Disadvantaged User Acquisition Department.

Indian political leaders reject the charity.

Two of the more digitally astute Indian politicians - Naveen Patnaik of Odisha and Arvind Kejriwal of Delhi state - who together represent more than 60 million Indians - have weighed in against Facebook and Airtel's Zero efforts.

The Odisha Chief Minister says in his letter to the regulator that "While the underprivileged deserve much more than what is available, nobody should decide what exactly are their requirements. If you dictate what the poor should get, you take away their rights to choose what they think is best for them."

The Aam Aadmi Party says: "The Aam Aadmi Party believes that the innovative youth of this country will give us the next Google, Facebook or Whatsapp.  However, if some websites or applications or services are offered free or at faster speeds, the balance tips towards established players with deeper pockets which kills the innovative young start-ups that will emanate from this ecosystem."

The ruling party, the BJP, has made noises about net neutrality and non-discriminatory availability of the internet, it's still adopting a wait-and watch attitude to the actual regulation process.

Neutrality in Silicon Valley, but not in Araku Valley.

Meanwhile the heat is turning up on other Silicon Valley firms who are part of these Zero efforts. Google, which led a loud battle in the US for net neutrality, has quietly been part of the Airtel Zero product in India, in shining hypocricy to its stance in the West. Twitter has done the same too, managing to speak out of both sides of its mouth, being part of the Airtel Zero plan in India while singing hosannas to neutrality in the US. 

While Airtel has a long history of playing fast and loose with customers, one wonders why Facebook had to do this. Perhaps the flat stock price is one reason. 

While Facebook and Google have pretty much the same number of users - around 1.3 billion worldwide - the former makes $12 billion off them and the latter makes $66 billion - a full 5 times more per user. Not being able to bridge this gap, it probably figured it had to do all it can to increase that number of users - while not letting them go to Google for search.

Ergo, internet.org, all dressed up as some well-meaning Silicon Valley philanthropy.

We'll never know, though. But it increasingly looks like India is saying "thanks, but no thanks" to Facebook and Airtel's Zero efforts.

Perhaps the only way the second world and the third world can grow is to behave like they're first world nations, and demand to be treated on par with every other netizen in the world.

Oh, we're not done yet. The battle still rages. And it doesn't look like Facebook and Airtel are done yet.

(Correction as on Apr 27: Facebook responded to my piece with 3 contentions: 1. they claimed that they did not pay the telco to carry Internet.org, 2. that they do not support videos in Internet.org and 3. that they picked other participants of Internet.org in a transparent manner.

On pushing for specific information and receiving it from them, I understand that  1. Facebook did not pay the telco but they instead put money behind promoting the service in public, which was available only through the telco, which is some sort of indirect promotion of the telco 2. that the version in India does not support videos and 3. that there was no transparence in the selection of the other participants of Internet.org, at least in India.

I am amending my piece herewith to correct my mistake on the videos issue and to amend it on the payment issue.. My point on non-transparence remains. )

(Mahesh Murthy is an investor and marketer. He tweets @maheshmurthy )