Facebook’s Free Internet Service Fails To Win World Bank’s Confidence


Facebook has an ambitious plan of making the Internet accessible in all the parts of the world, towards which it is working really hard. But those efforts do not seem sufficient for winning the confidence of the World Bank.Facebook's Free Internet Service Fails To Win World Bank’s Confidence

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World Bank concerned about Facebook’s free internet

On Wednesday, the World Bank released a 359-page report in which it stated: “The recent trend to develop services in which some basic content can be accessed free of data charges (such as Facebook’s Free Basics or Internet.org), while other content is subject to data charges, would appear to be the antithesis of net neutrality and a distortion of markets.”

In the report, the international financial institution offered its view on net neutrality and has made reference to the debate in many developing countries, such as India, and the offers that companies like Facebook are making. In India, many organizations participated in Facebook’s plan, but they had to withdraw following protests after indications by the regulator that these platforms will lead to unequal treatment of the various online services, the report said.

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The World Bank report said the digital revolution has not been able to touch the lives of the majority of the people around the world. It noted that only 15% of the world population is capable of affording access to broadband Internet, while there are about 2 million people in the world who do not own a mobile phone, and 60% of the world’s population is deprived of Internet access.

Facebook says its service will benefit all

Facebook CEO Mark Zuckerberg has been defending Free Basics, saying said that it is not possible to provide the whole internet for free. The service aims to provide free access to selective Internet services which include weather information, Wikipedia and Facebook as well. Facebook’s service also has support from many who argue that this practice will serve as a good means of extending Internet use into low-income countries.

Concerns regarding the tech sector not addressing income inequality were also been expressed in the report. It noted that in 2012 there were 5,000 employees working with Facebook, and most of them were skilled, white-collar workers. In comparison, Kodak had 145,000 at its peak.

On Thursday, Facebook shares closed up 3.07% at $98.37. Year to date, the stock is down by over 6%.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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