When Donald Trump won the presidency, his early decisions made it clear that the Federal Communications Commission would become much less strict in regulating Internet service providers. The FCC transition team he formed to chart a new course for the agency was primarily composed of people who oppose net neutrality rules and want ISPs to face fewer regulations in general. After the transition advisors finished their analysis and made recommendations, Trump named Republican Ajit Pai the new chairman, and Pai has since gotten to work reversing the net neutrality rules and other decisions made by his Democratic predecessor, Tom Wheeler.
One of the most immediate changes was that the FCC leadership now fully supports zero-rating, the practice in which ISPs exempt some websites and online services from data caps, often in exchange for payment from the websites. Zero-rating is controversial in the US and abroad, with many consumer advocates and regulators saying it violates the net neutrality principle that all online content should be treated equally by network providers.
But some zero-rating proponents believe it can serve a noble purpose—bringing Internet access to poor people who otherwise would not be online. That’s the view of Roslyn Layton, who served on Trump’s FCC transition team, does telecom research at Aalborg University in Denmark, and works as a visiting fellow at the conservative American Enterprise Institute.
Layton wasn’t authorized to speak about the FCC transition team’s work, but she described her general views about telecom regulation in recent conversations with Ars. Layton believes that zero-rating should be used to get poor people on the Internet in the US, similar to the “Free Basics” program that Facebook has implemented with mobile carriers in developing countries.
“I want Free Basics for the USA,” Layton said. “There is a subset of people who are truly poor… who need access to basic kinds of services, and I don’t think they should have to pay for them. If companies want to pay for them to do it and put advertising behind it, I don’t see the harm.”
There has been industry speculation that Layton could be nominated by Trump to become an FCC commissioner, but no official announcement has materialized. Although the majority of Trump’s FCC advisory team reportedly wants to strip the Federal Communications Commission of its role in overseeing competition and consumer protection, Layton said that was not her proposal.
“If anything, I would like the FCC to strengthen its economic function, its consumer protection function,” she said. Instead of strict rules against a broad range of practices, like the net neutrality regulations, Layton says that economists at the FCC should be empowered to determine whether specific actions by ISPs harm consumers. This could help target predatory pricing, bundling, tying arrangements, and foreclosure, she said.
But despite her preference for oversight, Layton still argues that zero-rating and other free data programs would ultimately be good for consumers.
Net neutrality controversy abroad
Facebook’s Free Basics application provides free access to a selection of websites on mobile carriers in a few dozen countries in Africa, the Middle East, Asia-Pacific, and Latin America. Free Basics provides a free connection to Facebook and “a range of free basic services like news, maternal health, travel, local jobs, sports, communication, and local government information.” It’s limited to those sites that are on the platform—it doesn’t provide access to the whole Internet.
Facebook says the platform is open and non-discriminatory, but developers, nonprofits, and governments that want to be included must configure their websites to use less data and be compatible with the Free Basics app. Free Basics is optimized for feature phones and slow networks, but it works on smartphones, too. VoIP, video, file transfers, and photos larger than 200KB are not allowed. Facebook opened the platform to developers in May 2015 after an earlier version was criticized for being too restrictive. It was first launched on a carrier in Zambia in July 2014 under the name, “Internet.org,” and given its current name of Free Basics the next year.
Layton acknowledges that Ars Technica readers aren’t the target audience for this type of application.
“To be sure, Ars Technica readers are savvy and well-educated people who know how to play complex online games with advanced devices,” she said. “First-time Internet users don’t. The point of offers tailored for first-time users is to reduce their barriers to get online. This includes lowering the cost, but also simplifying the tasks so that it is easy to use and relevant to them.”
Free Basics itself doesn’t guarantee access to mobile devices, but could be used in combination with other programs that provide free or subsidized devices.
About 95 percent of US adults own a cellphone and 77 percent own smartphones, but the percentages are substantially lower among people with low incomes, according to the Pew Research Center. For example, 64 percent of people who make less than $30,000 a year own a smartphone.
The FCC has helped subsidize phone service for poor people since 1985 with its Lifeline program, and last year expanded Lifeline to let poor people use a $9.25 monthly household subsidy to purchase home Internet or mobile broadband, or bundles including both voice and Internet. Lifeline can also be used to obtain free smartphones and other cellphones.
India banned Free Basics and similar zero-rated services in its net neutrality rules in February 2016. Canada also took a strong stance against zero-rating, even for services designed to meet social needs. That’s because, as Canadian regulators said, “defining a content category is problematic.” Facebook has been wary of bringing Free Basics to the US, but it reportedly started talking to White House officials about how to roll out Free Basics without inviting regulatory scrutiny when Barack Obama was still president last year.
Facebook wouldn’t face any opposition from Pai’s FCC. Besides yesterday’s preliminary vote to eliminate the current net neutrality rules, he has already rescinded the FCC’s previous determination that AT&T and Verizon Wireless violated net neutrality rules by zero-rating their own video while charging other companies for the same data cap exemptions. Websites don’t have to pay Facebook to be included in Free Basics, making it even less likely to be opposed by US regulators.
Facebook’s role as a news source raises potential problems with the social network being front and center in a platform designed to provide essential services. Facebook has had trouble preventing its website from contributing to the spread of “fake news,” and that problem could be compounded in an Internet service that prioritizes Facebook above other sites. If Free Basics came to the US, it would be up to legitimate news organizations to get onto the platform—and up to Facebook to ensure that legitimate news sites aren’t drowned out by unreliable sources.
Facebook is also willing to restrict access to information on its platform in certain countries, as seen recently when it “blocked users in Thailand from accessing a video” of the country’s king wearing a crop top, due to “the country’s laws banning criticism of the monarchy,” Vice News reported.
The big question: Who will bring it to the US?
Such problems might be moot in the US because it’s still unclear whether Facebook or any other entity intends to use zero-rating to bring broadband access to poor Americans. Zero-rating programs have been used heavily by AT&T, Verizon Wireless, and T-Mobile USA, but not for boosting Internet access for poor people. This recent history suggests there may not be a strong commercial case for Free Basics in the US.
“We haven’t seen a free zero-rating program introduced in the United States that creates substantial Internet access for people who don’t have it,” Ryan Clough, general counsel for consumer advocacy group Public Knowledge, told Ars. “That may suggest that economically, there may be insurmountable economic barriers to designing an effective program.”
When contacted by Ars, Facebook said it has nothing new to share. Instead, it referred us back to a statement from October 2016 in which it said that “Facebook’s mission is to connect the world and we’re always exploring ways to do that, including in the United States.”
In 2015, Facebook CEO Mark Zuckerberg said that Free Basics supports itself financially because “When people use free basic services, more of them then decide to pay to access the broader Internet, and this enables operators to keep offering the basic services for free.”