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Is Facebook Free Basics Back? No, Improved Discover Starts by Killing Net Neutrality Arguments

A few years ago, it was a matter of a raging debate on social media. Facebook was rolling out the Free Basics platform in India in 2015, which allowed free access to certain pre-listed content such as websites and online service. Facebook’s pitch was simple. They said they wanted to connect users with the internet, the same demographic for whom mobile data was still too expensive or had no access to internet services till now. Arguments against the app centered around net neutrality. Could we be heading for another showdown between advocacy groups and the world’s largest social media network which still harbors aspirations of connecting the masses. Or some may suspiciously say, internet domination.

Let us look at things objectively for a second, before jumping to conclusions. Or revisiting the past. Facebook is testing a new app that offers internet access in developing countries. It is called Discover and is being first trialed in Peru. The company confirms it will be launched subsequently in a number of countries, including Thailand, Philippines, and Iraq. No mention of India, yet. Activists can breathe.

Carrying on, this is how it works. Facebook Discover requires residents of Peru to have a SIM card from one of the partner providers, and download the Discover app from the Google Play Store. At this time, Discover is available for Android phones. Bitel, Claro, Entel, and Movistar are on board Facebook Discover project in Peru. It is expected that Facebook will have similar partnerships for Discover in the countries it subsequently launches in.

Telecom partners feed in the free daily data

With this tie-up, Facebook wants to bring internet connectivity to people who may still either not be connected with the internet (yes, there are still millions like that around the world, something difficult to fathom while enjoying our 100Mbps internet lines), or may still find data packs too expensive. The partner cellular companies will bundle a daily data limit for free, which users who have Discover on their phone, can use to browse the internet. This will off-course be low-bandwidth browsing—you will not be able to view videos on this, for instance, or load data intensive elements. This will be a very lean app, because it is meant for low-end phones which don’t necessarily have very powerful specs driving the Android experience and most also don’t have very large displays. This will be mobile web browsing, at its very basic.

You do not need a Facebook account for this to work.

The Big Takeaway: All websites are treated equally

The reason why Facebook Free Basics was immediately in the line of fire was because it did something similar but restricted the free internet access to certain websites and services. Therefore, the argument about preferential treatment for certain content while taking away the choice for the user, if they wished to access some other websites as well. This time, it is clear. Discover allows access to any and all websites via the app. Just that what you will see will be a stripped-down version of the web page, to keep it low bandwidth. “In response to feedback, we’ve developed Discover to allow people to browse all websites using a daily balance of free data from participating mobile operators,” Facebook confirms.

This is the biggest change between the Free Basics of the past, and the Discover of the here and now. It could also be the single biggest change to eliminate the criticism. There is no preferential treatment for any websites or services. There is no slicing of the internet into two-halves or more—based on priority. It is the same platform for everyone, where the choice seems to be with the user. Now it is up to how good your product is, for the users to return.

Net neutrality, by its very premise, dictates that Internet service providers—be it mobile networks or wired broadband services or internet accessing apps—should not discriminate among web services by prioritizing some over others by either blocking any app or service, throttling the access to any app or service or limiting the quantity of consumption. There should be no such preferential treatment based on websites, content, apps, device in device, a user’s browsing history and more.

Facebook will filter the elements on the page, but no ads based on browsing

Facebook says that they do not store any user’s browsing history, it can in no way be identified with any particular user and the browsing activity is not used by Facebook to serve ads.

But mind you, everything that you browse via Discover does get decrypted temporarily to strip down the bandwidth hogging elements. Facebook says they will route web traffic through the Discover proxy and temporarily decrypt it to remove video, audio, and high-bandwidth content that is not supported on Discover. “To support security, we encrypt information between our servers and any device that supports HTTPS where possible — even if the service being accessed runs only over HTTP. For websites that support HTTPS, a second certificate is used for traffic encrypted between our servers and the developers,” they say.

Rural users are getting connected; Facebook Discover needs to move fast

India could be a big market for Facebook’s Discover. If at all. Perhaps at some point in the future. Research firm Statista suggests that India will have as many as 564 million internet users by the end of this year, and more than 666 million by the end of the year 2023. The COVID pandemic has sped up the process of getting many more people online, particularly in rural areas. According to an Internet & Mobile Association of India (IAMAI) report released earlier this month, there are more than 227 million active internet users in rural India, a number that is 10% higher than the number of urban users, who clock in at 205 million. But if India is on the agenda, Facebook may need to move fast with Discover here. Once habits form, it is hard to get users to shift from one app to another.

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Tech

LG Electronics Logged Net Losses of $717 Million in Q4 2019

LG Electronics said that its fourth-quarter deficit widened due to losses in its equity ties with a display-making affiliate, while its mobile business remained in the red. The tech giant said it logged a net loss of $717 million in the October-December period, compared with a $67.7 million net loss a year earlier, Yonhap news agency reported. The company’s operating profit increased by 34.5 percent on-year to 101.8 billion won in the fourth quarter, but this was an 87 percent drop compared to the previous quarter. Sales rose 1.8 percent on-year to $13 billion in the last three months of 2019. For the whole of 2019, LG Electronics’ net income tumbled 87.8 percent on-year to $150.9 million.

Operating profit dropped 9.9 percent on-year to $2.01 billion, but sales inched up 1.6 percent on-year to a record $52 billion. LG Electronics said its equity ties with LG Display Co. hurt its bottom line. The company holds a 37.9 percent stake in the world’s leading OLED panel maker. LG Display, which is scheduled to announce its fourth-quarter earnings on Friday, has been suffering from falling LCD panel prices.

Analysts here expect LG Display to suffer more than $839 million in losses in 2019. Aside from equity losses, LG Electronics saw its mobile business extend a slump to 19 consecutive quarterly losses. LG Electronics’ mobile business unit posted $278 milion in operating loss in the fourth quarter, widening from a loss of $267 million a year earlier. The unit’s sales plunged 21.2 percent on-year to $1.09 billion.

For all of 2019, its mobile business had sales of $4.9 billion, down from $6.62 billion in 2018, while the operating loss was tallied at $847 million, also widening from $661 million in 2018. Analysts here predict that LG Electronics shipped only 29 million smartphones in 2019, down 28 percent from a year earlier.

“Sluggish sales of mass-tier smartphones in overseas markets, increased marketing expenses, and retail inventory adjustments led to operating loss in the mobile business,” the company said.