The following information published in a World Bank Report (World Development Report 2016: Digital Dividends) is amazing. On the average, 8 out of 10 individuals in the developing countries own a mobile phone. Further, within the bottom 20% population, 70% possess individual mobile phone connections. There is more access to mobile phones than to electricity and clean water in the developing countries!
It seems access to mobile phone is near universal and the coverage is growing very fast. What benefits may have motivated the poorest of the poor to seek a mobile phone connection even when basic amenities like water and electricity may have been near absent in their lives? Convenience of communication may have helped create more opportunities for them while affordable prices would have been the spur.
Alongside the spread of mobile phones, the world has witnessed growth of Internet connectivity, but at a much slower pace. About 31 percent of the population in developing countries has access to Internet while 80 percent of the population in the developed world enjoys such access. Most businesses (9 out of 10) have access to broadband Internet in high-income OECD countries. The coverage of businesses in low-income countries is woefully less (mere 4 out of 10). There is no doubt that benefits of digital revolution would accrue to the fullest when more and more people and businesses are connected to the Internet. However, people must be imparted minimum skills to use the Internet. The digital spread must be accompanied by appropriate public policy for everybody to benefit in a fair and competitive manner.
In this context, it is interesting to read what Mark Zuckerberg, founder of Facebook had said while launching his ambitious internet.org services in India in February 2015: “ …to continue connecting the world, we have to connect India. More than a billion people in India don’t have access to the Internet. That means they can’t enjoy the same opportunities many of us take for granted, and the entire world is robbed of their ideas and creativity.” There is a compelling reason to get everybody connected, but the Facebook seeks to achieve this by providing free data access to people on their mobile phones so that they can take advantage of certain Internet services. This has subsequently been termed as ‘free basics’.
I have no intention of entering into a debate on the policy makers’ dilemma on ‘free basics’, nor do I intend to comment on any orchestered opinion poll by Facebook, which apparently has mired the process of public consultations in this country. Let me rather go back to the basic debate on whether Internet should be made available free of cost as if it is a public good? And.. whether Facebook’s offer of ‘free basics’ can be treated as a public good? Will the Digital Dividend as described in the above mentioned Word Development Report be accelerated in India through the offer of ‘free basics’?
Let me try to answer these three questions:
Internet is a form of public good but not in the traditional sense: A public good essentially is one, which once provided, is available to all, whether they pay for it or not. Typical examples of public good are street lights, defence or policing services, etc. provided by public authorities. Internet in that sense is not a public good in itself as access to the net is usually subject to a fee. The providers of internet services are mostly in the private sector, and the private sector is least inclined to produce a public good. However, the traditional text-book definition of public good based on ‘non-rivalrous’ and ‘non-excludable’ characters do not appeal in the modern context. A public good is rather something that creates enormous positive externalities and contributes significantly to common good making a case for its universal availability. This availability may be ensured free of cost or at an affordable price irrespective of whether it is provided by a private entity or a public authority. Access to Internet could fall in the category of public good in this modern sense.
Facebook’s ‘free basics’ is made out to be a public good in the modern sense as above, but does it appear reasonable? ‘Free basics’ is a bouque of Internet services that Facebook thinks are essential for the common good of the society and it thinks that the same should be made available free of cost. Without going into what exactly is the proposed content of this bouquet of services, there is a prima facie question: how does Facebook determine what should come to the customers free of cost? What is the guarantee that it is really going to promote the ‘positive externality’ aspect of the public good argument? As a private entity is trying to determine the contents, the positive externality character of ‘free basics’ comes under suspicion. Remember, it is the fundamental access to internet that may qualify as a public good, not the access to certain specific services by exclusion of certain others. Thus the public good character of ‘free basics’ appears dubious.
Digital Dividend from ‘free basics’ appears vague and taken for granted. Mere access to Internet is not enough to guarantee economic and social upliftment of the people it intends to address. There is a lot more that needs to be ensured. The World Development Report articulates this aspect very well. It says that the impact of digital revolution has not fully fructified, as its ‘analog complements’ have not made commensurate progress, such components being mainly the right kind of regulations on entry and competition for operators and enabling people’s skills to reap the benefits of the digital revolution. Here comes the role of public authorities in India to see if ‘free basics’ is indeed a public good with enormous positive externality. Available information in the public domain does not tell us the exact positive externality that ‘free basics’ proposes to provide.
Universal access to Internet is a public good of a different kind and it needs calibrated intervention by the public authority.
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Manoranjan Mishra 
Frankly, I have not understood the issue in its entirety. From a common sense point of view, what’s the loss if Facebook offers something free? As long as it’s not asking for money from its ‘free basic’ customers, it should be fine. End of the day, everyone has the option of not joining. Think, if governments provide such a service will there be such an outcry? Governments across the world offer similar ‘free basics’. Example, health care – you have the option of availing it ‘free’ in a public hospital or go to a corporate hospital for a price. No one complains.
I think we shouldn’t bother much as long as it’s ‘cash neutral’ for the customer.
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The debate here is not about pros and cons of “Free Basic”. The debate should be on providing Internet Access to every one, especially to 1 Bn Indians without access to internet despite having mobile phones.
Most of us would agree that internet has changed lives for better for a majority of our population, though to a varying degree based on one’s level of literacy & infrastructural issues . If Facebook is willing to provide Internet freely ( by way of access to a few essential public services) for the internet-excluded population , I see no point in opposing .
We do not crib when we access Google’s search engine free or its G-mail free. Even if Google collects some ad-revenue by providing G-mail for free, we are not concerned as long as we are able to get basic e-mail facility for free. This itself is a public good for many of us, more so for those without an internet access on their mobile phones.
As Access to Internet is prohibitive for many due to predatory pricing or cartels among the Telecom service providers, I think Facebook’s initiative to provide Free-basics(even for select public services) is a welcome step. The Free basics has , so far, been a success in many countries. The murmur of protests against Free-basics could be mainly from entrenched Telecom service providers, who might find their business models going for a toss due to Facebook’s disruptive idea.
However, the Govt needs to regulate the contents of Free basics and ensure that it is really “free”.
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