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Saturday, January 16, 2016

What happens if free basics is legalized?

There have been multiple arguments on either side of Facebook's Free Basics and net-neutrality debate.

Taking a neutral view- let's see what could actually pan out if Facebook's Free Basics gets a go-ahead in India and other focus markets - in order of occurrence -

  1. Definitely a lot of people without access to Internet would get access to the "free basics" portfolio. These guys would get on the digital platform 
  2. They would start using the limited bouquet of services and Facebook would get to analyze their consumer behavior 
  3. As per Mark Zuckerberg's own statistic - 50% of them would evolve into full paying data customers 
  4. As of result, telcos would penetrate into an entirely new segment - good news
  5. These upgraded users would also seek to better their experience with better devices- I believe mostly android low end smartphones- So OEMs gain- Good news again 
  6. With the insights gathered about upgraded users in the "free basics" phase - Facebook would be uniquely positioned to target them with specific advertising. So, more the upgrades from free basics to fully paid users - more the cache of the target base Facebook can target. This would obviously lead to an upside in their advertising revenue from a totally new untapped base- excellent marketing strategy 
  7. Seeing this success, carriers and content companies would line up to join Free Basics. With old rules of supply and demand coming in- there would be a situation of haves and have-nots
  8. What this would lead to is that the have-nots would rally around the other biggies - Microsoft, Google, Amazon and others to create their own versions of Free Basics
  9. This would divide the Internet into "private clouds"- a collection of sites and content provided free of cost to end users by various players including but not limited to Facebook, Google, Amazon, Microsoft and others 
  10. So a user would now have less incentive to upgrade to a full data pack as he would find most of his used apps and content falling within the multiple "private clouds"
  11. Operators now would start suffering as growth to paid users would slow down unless they stick to a single "free basics" platform which seems to be difficult 
  12. With these multiple "private clouds", user choice in any category would be pre-determined to what is part of these systems 
  13. This would create huge entry barriers for any new innovation or game changer
  14. It was this openness and the lack of entry barriers which lead to Facebook and Google becoming what they are today
  15. This ultimately would lead to the end of the Internet as we know it
Hence, now with full conviction, I oppose Free Basics 

As Robert Frost said - "Something there is that doesn't love a wall,
That wants it down."

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