(This was originally written for Caribou Digital's website, and then picked up by Next Billion.)
Facebook launched Internet.org in 2013 to make free Internet access available everywhere, via pared-down web services focused on job listings, and agricultural, health care and education information - along with Facebook's own social network and messaging services. Until recently, Internet.org users could only access a few select websites, and Facebook determined which sites made the cut. But early this month, Facebook opened the Internet.org service to any developers that meet its criteria, stirring a new wave of debate and criticism about the initiative, which has been billed as a way to provide web access in low-income markets around the world. This new move is largely a response to the growing backlash from net neutrality supporters, especially in India, where some content partners pulled out of participating in Internet.org due to public outcry. (A good background article can be found here).
Critics complained
that not only was “zero-rating” (in which telecom providers agree to
absorb the costs of handling the data traffic so that consumers can
receive services for free) fundamentally against net neutrality
principles, but that Facebook would control which services (including
which web sites) were offered for free as part of the Internet.org
portfolio, creating a classic walled garden
model. Given the expected advantages of a service on Internet.org
versus a competitor not on Internet.org, Facebook would essentially be
picking the winners and losers for these markets.
By
opening Internet.org to all developers, Facebook is addressing this
second criticism. Facebook VP Chris Daniels stated clearly that its intent with Internet.org is not to create another walled garden.
If we leave aside the fundamental conflict between zero-rating and net
neutrality, the underlying strategic intent and potential implications
of this move are important to consider. Because while Facebook is only
creating the rules for Internet.org, if the platform becomes a
significant part of the mobile Internet landscape in emerging markets,
the model that it establishes may become the de facto standard – just as
Apple’s iTunes and App Store model set the standard for the first wave
of the mobile app ecosystem, including the now-universal 30 percent
margin that the platform owners take on apps.
The Internet.org platform will be open to any developer, but not any app, as there are three eligibility requirements
all apps must meet: First, the app/service has to encourage users to
“explore the broader internet” by limiting what is available for free
through the app; in essence, Facebook is encouraging a freemium model.
Second, the service has to be efficient with data, and work well on more
basic phones, which means more text and fewer images. Third, the
service has to comply with a set of technical requirements,
including not encrypting traffic via HTTPS, or using JavaScript, Flash
or SSL. The lack of encryption has generated criticism of how Facebook
is handling privacy, especially given that all traffic will be served
through Facebook’s proxy servers.
While
on the surface Facebook seems to be creating another app store similar
to Apple’s and Google’s, there are a few structural differences that are
important to call out. First, this would be a mobile app store based
not on an operating system, but on a service, signalling the
increasingly powerful role that services – especially those like
Facebook that capture user data – are taking in the mobile industry.
Traditionally it has been Apple, Google and Microsoft that have been
able to establish power through their respective platform ecosystems and
app stores, all of which are based on an operating system. But the OS
is losing its importance as the critical asset, in part because
cross-platform interoperability is easier and cheaper, but especially
because we are increasingly relying on cloud-based services - accessed
through an app - and it is these services that are able to lock-in
users. Simply put, most people who are heavy users of Facebook, Gmail,
Dropbox and so on would rather switch to a different operating
system/device than switch to a competing service; we are locked in by
our personal data and will follow it.
Perhaps
even more importantly, this new app store structure would reframe
Internet and web access for the millions of people in the developing
world who are its potential users. In the industrialized countries,
mobile Internet usage has been steadily shifting away from the web and mobile browser, and toward apps,
mostly because they’re purpose-made for specific tasks or entertainment
functions, making them easier and faster to use. Compared to the open
web, which is unrestricted and free-to-use, apps are more directly
controlled (via the app store owner, who can determine access to the
store) and monetized (via the app developer and the app store owner).
This
gets flipped on its head in the new Internet.org platform, where the
open and unrestricted web costs money, and it’s the directly controlled
apps that are free-to-use. Given these options, how many new users are
going to choose the open web?
Of
course, this restructuring of controlled apps vs. open web affects
producers as well. New firms seeking to enter the space will have to
abide by Facebook’s terms of service and eligibility requirements, limiting the scope of innovation. For one, all apps/services on the Internet.org platform must agree to sharing user data with Facebook, which in turn will share it with mobile operators.
More constraining is the “freemium” requirement, which, according to
Facebook VP Daniels, encourages those services that “simplify features
of their applications such that in order to access the entirety of their
websites or their applications, one has to pay for it.”
Would
a new form of Wikipedia be able to meet this requirement? How about
Facebook itself? Facebook enjoyed tremendous user growth as a standalone
website on the open web, with no requirement to limit its functionality
or force users to pay for key features (it mostly sold ads). And when
users signed up, there was no third-party entity above Facebook that was
collecting data and sharing it with the user’s Internet service
provider.
So it’s with some irony that Facebook is
now using its dominant market position to push free access to
Internet.org, and thereby directly weakening the role of the open
web–the same innovative and unrestricted environment that helped it grow
into a $200 billion company–in favor of a tightly managed ecosystem
that it controls and mines data from.
Opening
Inernet.org to developers will probably improve public opinion of the
initiative, and may have been a step that Facebook had planned all
along. Because while the perception is that this opens the gates to the
walled garden, Facebook remains firmly in control of regulating
participation – and thus innovation – only now at a larger scale. But
the more insiduous issue is that the new Internet.org will continue to
position the open web as costly, and controlled apps as free, using
affordability as a form of platform lock-in to a limited Internet
experience with real data-privacy trade-offs.
This garden has real dangers, and taking down the walls may only encourage more people to enter.
