URGENT QUESTION: Was Internet.org initiative really aboutserving the bottom of the pyramid or was it more about Facebooktrying to expand its reach?

1 Facebook’s Internet.org Initiative Serving the Bottom of thePyramid? “Connectivity cannot just be a privilege of the rich andpowerful. It is a human right." Mark Zuckerberg, Facebook CEO “I dohave to question Zuckerberg's motives. Users are offered limitedinternet access before being asked to pay for more. Is this aphilanthropic project or money making exercise for Facebook?"–Brendon Petsch, IT Director, Gritit Moments in history were madememorable due to the invention of new technologies that completelyrewired the way society functioned. One such invention was internetthat revolutionized the way people connected and improved theireconomic well being. Social networking site, Facebook redrew themap of connected world and was scouting for future growth fromdeveloping countries. This initiative had taken effect inPhilippines, Zambia, Rwanda, Paraguay and Tanzania with a‘pay-as-you-app’ model that charged different rates for dataconsumed by different apps. In that process, Facebook had emergedas an intermediary and offered services ranging from education tobanking and health with its profit-driven motives. Also, thisinitiative would make access to contents through Facebook networkalone thereby influencing its users. India too had joined thebandwagon and internet.org was launched in India in 2014.Facebook’s founder Mark Zuckerberg had acknowledged the initiativeas the organization’s long term project that would eventually turnprofitable. Praised and criticized by many, the case study wouldlook into the motives behind the launch of non-profit initiativeinternet.org and how it served Facebook’s business interests. Whiledoing so, it will also analyze whether Internet.org was a smartbusiness move dressed up to sound like charity. “The goal ofInternet.org is to make Internet access available to the two thirdsof the world who are not yet connected, and to bring the sameopportunities to everyone that the connected third of the world hastoday”. Apart from Facebook, the other founding partners ofinternet.org had believed in the power of connected world and hadcome together to achieve the lofty goal of making internetavailable to everyone on Earth. A study by Deloitte had revealedthat internet connectivity was a major key driver for economicgrowth in developing countries. It would become a powerful tool ofsocial change with a capability to create nearly 140 million jobsand uplift 160 million from absolute poverty besides providingcritical information for leading a healthy life. But the majorchallenge encountered in becoming a knowledge economy was the slowgrowth of internet connectivity. Only a third of world populationi.e. around 2.7 billion people were connected. Even though, morethan 85% of global population lived under cellular operator’scoverage area, only 30% were accessing the internet. In order toincrease the affordability and awareness, the key challenges forinternet adoption, internet.org had introduced the Internet.org appthat gave free basic services to the users. Through thisapplication, people could access information regarding health,employment and local news. This was made available initially inZambia through Bharti Airtel and extended to other parts of theworld as well. In Philippines, where internet.org initiative wasadopted in collaboration with the mobile operator Globe, promisingresults were seen. More number of people got free access to appsand also through loans they registered for its various data plans.Within a few months of 2 starting this initiative, the mobile usersubscriber base on Globe network had increased by 25%. While inParaguay, in collaboration with TIGO8, this initiative hadincreased the user base by 50%. Nearly 3 million people had accessto internet and their daily data usage also increased by 50%.9Also, in Indonesia, internet.org had improved the country’s networkas well as enhanced its app performance thereby closing theconnectivity gap. Tanzania also joined this initiative in October2014. In Kenya, along with Airtel, internet.org had startedoffering basic internet services free of cost. Another pilotinitiative of internet.org was the introduction of Social EDU thatprovided Rwanda students with free access to online education incollaboration with the government of Rwanda together with Nokiasubsidizing its Smartphones for the initiative. In India,internet.org had collaborated with Unilever to expand netconnectivity in rural areas and also to evaluate educational andcultural factors that limited the usage of internet in India.Unilever’s Chief Marketing and Communications Officer Keith Weedasserted, “Access to the internet is improving in countries likeIndia but there is still a very high proportion of people thatwould love the opportunity to connect and engage but who cannotenjoy what many of us take for granted. We hope, together withInternet.org, we can use this know-how to understand better how avital modern resource can benefit many more millions." But JenSchradie, a PhD student of University of California felt that theinitiative was a ‘Trojan Horse’ and was intended to expandFacebook’s potential market. He opined, “The internet as a humanright is more than just freedom of speech, it is also freedom toaccess all of the tools of that speech. Access to Facebook andparticipating in its black box algorithms that generate profits forthe company are not human rights.” A Support for Emerging Economiesor a Smart Business Move? Zuckerberg felt that the internet.orginitiative would generate a positive impact on the globalpopulation. “They’re going to use it to decide what kind ofgovernment they want. Get access to healthcare for the first timeever. Connect with family hundreds of miles away. Getting access tothe Internet is a really big deal.” But barriers to internetconnectivity were many and internet.org was geared to break thebarriers More so, Facebook had focused its approach towards India,as it was blocked in China. However, in India, the low penetrationof the internet and low Average Revenue Per User (ARPU) did pose achallenge to Facebook. Zuckerberg had taken efforts to explore hisoptions in India. Ultimately he had wanted to improve Facebook’srevenue and also the number of Facebook users which would increaseits ARPU from Asian region. Internet and Mobile Association ofIndia (IAMAI) and IMRB23 International had found that availabilityof regional language content in India would give a boost tointernet growth by 24% in rural areas, as Facebook executivesclaimed India as "brutally localized" country. All along,Zuckerberg had reiterated that internet.org was not meant to makemoney immediately, “Traditional businesses would view people usingyour service that you don't make money from as a cost." But he hadwanted this initiative to become profitable in the long run. Hehimself acknowledged, “There are good examples of companies -Coca-Cola is one - that invested before there was a huge market incountries, and I think that ended up playing out to their benefitfor decades to come. I do think something like that is likely to be3 true here. So even though there's no clear path that we can seeto where this is going to be a very profitable thing for us, Igenerally think if you do good things for people in the world, thatthat comes back and you benefit from it over time." Internet.org’s"on-ramp" would bring in contents through Facebook alone and wouldinfluence the users on their access to entertainment and news.Also, it influenced them in their education, health and bankingactivities. Zuckerberg also stated that the goal of theinternet.org initiative was to offer credit and identityinfrastructure in developing countries "that is still nascent inmany developing countries." But analysts had warned that the socialmedia sites, with its own limitations would in turn increase theanxiety level of the site users. Also Facebook was not an entityalone to provide these services to developing countries. Users hadto bear in mind that Facebook was a for-profit organisation whoseinterests were much different from that of an ordinary citizen.With long term growth expected to come from the developingcountries, Facebook had played its cards well through internet.orginitiative. They emerged as a monopoly and got hold of data toincrease their revenue from advertisements. "Internet connectivityto all" had become a commodity for the technological companies andwas guised as a humanitarian activity. Evgeny Morozov, a Journalistand author made scathing remarks about Zuckerberg’s positioning ofinternet.org as a humanitarian mission of Facebook and not as afor-profit business expansion plan. Morozov was worried that itwould expand Facebook’s reach, sold more of its advertisements andsqueezed other app developers. Moreover, others not in the Facebookecosystem would be pressurised to join with the rest to use itsapps. Apart from that, in a price sensitive developing market likeIndia, internet.org tilted the scale in favour of free servicesthat brought distortion in the neutral access space. The initiativeforced the competitors to enter into revenue sharing arrangementsand gave excessive power to people who selected services forinternet.org initiative. Net neutrality was forgotten andinternet.org made business sense for Facebook and not for India.The altruistic propaganda of internet.org had its own catch as itaffected net neutrality and internet freedom. People got access tolimited sites and these initiatives acted as gatekeepers to theiroffered choice. In that process, poor people became hostage tofreedom of accessing sites. They were also forced not to accessother sites and networks thereby creating a monopoly portal,ignoring net neutrality and controlled people both in thedeveloping world and the developed ones. That echoed the statementmade by proclaimed Management Guru C.K Prahalad (Prahalad) on howaccess to internet connectivity would help in mining the "fortuneat the bottom of the pyramid". Many organisations tend to overlookthis aspect as these markets offered low revenue potential andtheir operating expenses were also more. Prahalad wanted anentrepreneurial approach rather than a charity to elevate the poorand needy. He felt, “If we stop thinking of the poor as victims oras a burden, and start recognizing them as resilient and creativeentrepreneurs and value-conscious consumers, a whole new world ofopportunity will open up.”He also wanted multinationalorganisations to pursue partnerships with them to innovate andsustain growth. 4 As Prahalad reaffirmed, “cases certainly can befound of large firms and multinational corporations (MNCs) that mayhave undermined the efforts of the poor to build their livelihoods,the greatest harm they might have done to the poor is to ignorethem altogether. When the poor at the BOP are treated as consumers,they can reap the benefits of respect, choice, and self-esteem andhave an opportunity to climb out of the poverty trap. The problemof poverty must force us to innovate, not claim "rights to imposeour solutions”. Visualizing the path ahead, Zuckerberg opined, “Themission is to make this world more open and connected. In terms ofconnected, we want to go from one billion connected to the nextfive billion connected. I don’t know how long that will take, andit might be a lot harder than the first billion, but that’s what weare focused on. That’s what Internet.org is all about... We arealso focused on making the economy work better. We built ourbusiness on ad products. When we are building product forbusinesses, we are not thinking only about making money, we arethinking about how can we help aspiring entrepreneurs create theircompanies, create jobs, how can we help e-commerce companies sellmore.” Chris Smith wrote in the article ‘The hidden cost ofFacebook’s Internet.org project’, “Developers and online serviceswill have to make sure they have apps ready to run inside Facebookto reach as many users as possible, especially users who may notwant to pay for additional access outside of what Facebook willoffer for free” Elaborating more he said, “Imagine your water metergiving you free quick showers but charging you for a bath... Andthis is the profit-driven assumption behind Internet.org’s allegedbeneficence: Once it gets enough people to take its free digitalshowers, more users will reach into their pockets to take a digitalbath.” Apple’s CEO Tim Cook stated, “When an online service isfree, you’re not the customer. You’re the product.” But someanalysts felt that the initiative would be a win-win situation forboth Facebook and its consumers in the developing countries as itwould help the company to improve its network penetration as wellas the quality of life of its consumers. Internet.org would be selfsustaining because of the founders’ self-interest and theirpre-competitive nature and focus. Mixing up business and socialcause was considered normal and organizations like Facebook withtheir experience and expertise would crack down tough problems tooffer solutions to developing countries in net connectivity. Theonly solution offered by the critics of the initiative was that thepublic should be ever vigilant and check their activities and seeto that the beneficiaries were not trampled upon in perpetuatingthe self-interest of the companies involved in the initiative.