Wednesday, December 30, 2015

Mahesh Peri - Facebook Is Not A Charity, And Nothing Is For Free

No corporate works for charity -- by intention and definition. To explain why Facebook's intentions are fraudulent, I will take the experience of Delhi's healthcare policy.

Delhi decided to provide quality healthcare to all its citizens. They started allotting free land (like spectrum) at a fraction of the cost for setting up hospitals with a pre-condition that they provide free treatment to 15% patients (like "free basics") from economically weaker sections (EWS). However, I have rarely seen inpatients belonging to this category in any top private hospital. Every bed is at a premium and they wouldn't waste it on a patient who isn't paying for it. But the official records will show 15% patients from the EWS category as having been treated. In India, most books are manufactured to suit a regulation!

An ideal situation would have been to collect 15% of the turnover of all these hospitals and use that money to insure the EWS category. That would ensure fair treatment of EWS without discrimination. Everyone becomes a similarly paying customer as money is reimbursed by the insurance company. But then, transparent policies kill corruption and no government will allow that, including AAP.

Back to Facebook. It is a NASDAQ-listed company. Mark Zuckerberg owns only 28% of the company and other investors include corporates, PEs, VCs etc. Analysts will punish FB with impunity the moment they see it swerve from the path of being a profit-making enterprise.

If FB's intentions are indeed honourable, they will use all the resources they intend to invest on free basics to give limited access to all the population, of all the internet. Referencing research done at the Oxford Internet Institute, internet activist Nikhil Pahwa says that though people prefer some internet to none, "they would rather be given the choice of deciding what they want to access, with millions of websites and apps to choose from, for say, three days, over being given unlimited access to a limited selection".

Facebook's endeavour in India is about control. This is about being the gatekeeper. This is about controlling the pipeline and what is channelled through the pipe. To dress it up as charity is a lie. To mislead us is a fraud. FB is a company and they will not be allowed to do anything for "charity" that doesn't have benefits for the company. If indeed it is charity, let them declare it in an SEC filing on NASDAQ, allocate funds for it and face Wall Street.

The government must realise that private enterprises for profit can never be the vehicles that carry the mission of Digital India. The Modi government has made a promise and they need to fulfil it without FB being the vehicle. We can easily afford to fund every data connection, if it uses less than 64KB data (with people using more than that paying for all data). Spectrum, like land, is a national resource not to be frittered away. We don't need free basics. What we need is free internet to connect India, even if it is for a very limited period of time.