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Facebook sparks net neutrality battle: the app is designed to bring millions of Africans online but net neutrality campaigners warn that its dominance could harm competition.

In September, Facebook announced that loom Africans are signed up to its service; half of all the people on the continent currently connected to the internet. The social media giant has big plans for the continent, spurred on by the growing penetration of the internet. On current projections, Facebook could be targeting as many 500m users by 2020.

Aware that Africa is one of the last green fields for customer acquisition in a world becoming increasingly saturated in terms of online access, Facebook is pushing hard to get more people online.

It began this year by launching Facebook Lite, a simplified version of its mobile website for bottom-of-the-line phones, being piloted in Nigeria, South Africa, Sudan and Zimbabwe.

But the main plank of the company's policy in Africa is, the partnership it leads with the avowed goal of getting the remaining two-thirds of the world online. Through the app, the company gives free access to popular websites, including BBC News, Jobberman, Wikipedia--and of course, Facebook--for free, with the services 'zero-rated' in terms of data charges.

On the face of it, the goal to increase internet access seems a noble one. Facebook's critics warn, however, that the company is building a dominant position that may lock consumers into using their services, and limit the ability of smaller companies to compete in these new growth markets.

The global consultancy McKinsey projects that if Africa's internet penetration grows the same way as that of mobile phones, as much as 10%, or $3oobn, could be added the continent's total gross domestic product by 2025. Mobile is the primary channel for consumers to access the internet in Africa, and bringing down data costs should speed up this growth.

Operators, keen to attract customers themselves as more Africans obtain mobile phones, are also seeing the benefits of zero-rating. Maria Pienaar, chief information officer of Cell C, which recently zero-rated the messaging service WhatsApp, said the move substantially boosted customer acquisition. "There is the additional value add of things customers do like to do. You do see a trend where people do move to where value is," she says.

Willie Ellis, head of products and innovation at Airtel Africa, which has partnered with Facebook to rollout the app in Ghana, Kenya and Zambia, said zero-rating assisted with the operators' "land grab" of customers, and said he could see Airtel and Facebook working together on monetising these customers in the future.

There are those raising fears, however, that for all the benefits of zero-rated access to certain services, the net result will be a "walled garden" internet where users will only be able to gain access to certain, usually global, services made available for free via a partnership with the operator, locking small companies out.

Marc Herson, chief operating officer of smaller social network 2go, says is a "race to the bottom".

"It is going to be critical if we want to support a local content ecosystem across the continent to create the diversity of experiences for end users over time. From a long-term perspective, concentrating power will be bad," Herson says.

Brett Loubser, managing director of Chinese chat app WeChat, which is attempting to grow its usage in South Africa, raises similar concerns, and questions whether the zero-rating strategy is sustainable if it locks out smaller companies and excludes future revenue-sharing models.

"What happens to my partnership with the operator once it achieves its goal?" Loubser says. "Zero-rated access to my content has allowed the operator to build its customer base, but the opportunity to build longterm value has been missed by short-term thinking."

The fact that it is smaller players, rather than market-leading operators, who are looking to enter into these deals also limits the scale of the opportunity, Loubser adds.

Politicians have joined the fray as well. Marian Shinn, South Africa's shadow minister for telecommunications, says that although appears to be a genuine attempt to help Africa leapfrog into new, cheaper technologies, it is actually a strategy to "lock new markets into their proprietary world."

" is showing an altruistic face of basic, free internet but it is really a grab for dominance of Facebook and its chosen business partners," Shinn says.

"African ICT regulators must be the frontline to protect the corporate creep that can potentially lock out innovative entrepreneurs from being seen and heard on the internet. Net neutrality must be their stand and they must regulate to protect it."

Facebook responds to the "walled garden" claim by saying it does put some local content on the Internet, org app, with EMEA head of international growth and partnerships Nicola d'Elia saying: "With each operator we decide a set of services that will be appropriate to the local market."

Herson and Shinn, however, point out that it is unlikely the company would consider having a competitor zero-rated through its partnerships.

Facebook is not the only company launching such zero-rating schemes in Africa. The Wikimedia Foundation has made basic free mobile version of Wikipedia --Wikipedia Zero--available in South Africa, saying it is boosting education on the continent by offering its online encyclopedia free of charge.

However, even this seemingly philanthropic act has been criticised, with digital rights pressure group Access calling it a "Band-Aid on a bullet wound".

Access' issue with Wikipedia Zero is again connected to net neutrality, the idea internet service providers should be banned from discriminating against certain services in favour of others and from creating 'fast lanes' for certain platforms in order to promote their own commercial interests.

It is not so much that Wikipedia is doing a bad thing offering free information to mobile subscribers, its critics say; it is the fact it is being given an unfair advantage over other services, for which users are charged data costs.

For net neutrality campaigners, however, Facebook's initiatives are more concerning. Their fear is that for people with basic mobile phones--the majority of the population--and unable to afford an expensive data plan for the web, the persistent zero-rating of Facebook across Africa means that for many people it essentially is the internet.

This concern is supported by data. Research ICT Africa has reported that in one survey of mobile phone users in Africa, a much higher number of respondents said they used Facebook than said they used the internet.

Another company, GeoPoll, undertook research in Nigeria and Indonesia on mobile usage in the last 30 days. In Nigeria, 9% of Facebook users said they did not use the internet. In Indonesia, the figure was 11%.

The campaigners at Access believe it is "incredibly dangerous" to introduce the internet to developing countries with zero-rated services. It believes such services do little to address the underlying problems that contribute to the digital divide, and only encourage operators to continue to offer limited access deals in the future.

Facebook is well aware it stands to benefit financially in the long run. Chief financial officer Dave Wehner said during the company's fourth-quarter earnings conference call that, "over the long term ... focusing on helping connect everyone will be a good business opportunity for us."

If through zero-rating Facebook becomes one of the top services in countries such as Ghana and Zambia, "then over time we will be compensated for some of the value that we've provided," he said.

But net neutrality campaigners and smaller companies like 2go and WeChat fear being "locked out" of Africa's discovery of the internet and want regulators or operators to do something about it.

There is a precedent for this. Last May, Chile ruled that zero-rating services such as Wikipedia, Facebook and Google violated net neutrality laws and declared the practice illegal.

Net neutrality campaigners want African regulators to do the same. Facebook says that it is helping bring more Africans online--and it may well be--but its opponents fear that the net result will be a Facebook-dominated internet, with consumers and smaller companies unable to access the benefits that open access to the internet can bring.

Some opponents go even further. Niels ten Oever, head of digital at campaign group Article 19, says "walled gardens" created by zero-rating policies the world over are a threat to fundamental human rights.

"Protecting the plurality and diversity of information is fundamental to securing the right to freedom of expression for all," he says.

Unfortunately, they are under threat by moves to end net neutrality--the principle that those controlling the internet infrastructure should not interfere or discriminate between the types of data that travel along it."
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Title Annotation:Technology
Comment:Facebook sparks net neutrality battle: the app is designed to bring millions of Africans online but net neutrality campaigners warn that its dominance could harm competition.(Technology)
Author:Jackson, Tom
Publication:African Business
Geographic Code:60AFR
Date:Mar 1, 2015
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