Free basics, net neutrality and challenges of accessibility in Brazil

Lucas Costa dos Anjos and Marcos Henrique Costa Leroy

Initially launched under the name of Internet.org, Free Basics intends to broaden access to the Internet throughout the world, especially in developing countries, like Brazil. According to the research Tecnologias de Informação e Comunicação em Domicílios 2014 (Information and Communication Technologies in Households – 2014), 92% of Brazilian households have access to information and communication technologies. However, Internet access is still very limited, like in the case of the North of Brazil, where only 35% of households are online, while this ratio is 60% in Southeast Brazil. This is, in great part, due to high costs for access. Therefore, initiatives that promote free access are extremely relevant.

Despite raising accessibility, there are concerns with regard to minimum standards of net neutrality in Brazil. In some jurisdictions, limitations to content accessed online are considered threats to freedom of speech, competition and important civil liberties, deemed essential to the use of the Internet.

What is Free Basics

According to the Internet.org’s website, this is an initiative that seeks to gather efforts of NGO’s, leaders, local communities and technology experts in order to bring Internet access to two thirds of the world population, which is yet to be connected. The project would help overcome barriers such as infrastructure, cost accessibility and technical knowledge on the subject.

Free Basics’ access capability is reduced to a simplified version of Facebook, with selected news and service providers that are take part in the initiative. Supporters of the initiative claim that this would be a way of increasing access to the Internet in areas that have no private service access providers, no governmental initiatives, neither substancial economic interests in exploring these markets. Facebook and its partners say that Free Basics would raise connectivity throughout the world, improve service efficiency and promote economic development in several sectors, especially for people with limited or inexistent digital access.

This project was heavily criticized in some of the countries where it was implemented, like India. This was due to the fact that the system was deemed to be too “closed”, not allowing a minimum of innovation and freedom for users to modify and improve their use. After negative criticism in India, Facebook allowed that developers create software and apps compatible with Free Basics.

Net neutrality in Brazil

Net neutrality is particularly important so that users express themselves freely, protect their data from illegal surveillance, and identify other users with similar interests, among other aspects. It also contributes to the freedom of competition online, without data discrimination and barriers to the entry of new businesses, neither a monopolized market. In addition to that, the concept of accessibility is essential to overcome democratic deficits by providing citizens with more information about their rights, prerogatives, association and protest methods, etc.

On the Brazilian Framework for the Internet, net neutrality is mentioned on article 9, which allows for online data discrimination only in exceptional cases. Data packages cannot be discriminated according to their content, origin, destiny, and types of service or applications. Federal regulation n. 8.771, of 2016, also explores the necessity of preserving net neutrality in the country. According to this regulation, “data discrimination or degradation are exceptional measures, due to the fact that they can only be applied when called for technical reasons to adequately provide services and applications, or to prioritize emergency services” (Article 4).

In the case of Free Basics in Brazil, Internet access would take place without any costs for people who are not connected. However, they would be conditioned to content provided by Facebook, promoting a limited access to the Internet, which infringes net neutrality – are there advantages to investing such high values, with a great possibility of developing a region and little governmental interest.

Economic impacts

Free Basics targets people who live in areas with difiicult access and little or nonexisting Internet connectivity. The promotion of this social and economic policy would reach a free and open market, in which the society does no have many means and informational resources regarding the digital environment. Therefore, the spectrum of this tool Facebook is creating tends to create, from a series of factors, a highly concentrated market, thus easily monopolized.

This is due to the fact that there are no barriers regulating its entry. This new form of Internet access, which is also a commercial activity, even when for free, has little control and limitation by the government, especially when it comes to its legislative specificity.

It is also necessary to refer to the Brazilian Framework for the Internet, and its federal constitution, which intends to promote de right to Internet access to all, assuring rights and duties in its use and policies to federal entities. They are responsible to promote the expansion and use of the Internet in Brazil, optimizing network infrastructures, without damaging neutrality and participation (articles 24, II and VII). This reveals that the new idea from Facebook is actually a governmental policy, with little room for development in a limited Internet (Free Basics).

Despite there are no regulating barriers, the financial capital spent to finance such project, with little direct profit, directly affects any possibility of rivalry against Free Basics. This is because there would be no substitute products for consumers (relevant material and restricted market); it would reach a geographical market that is brad and difficult to access; and there would be little income interest from Internet long-term providers. If there is no future, not even on a global scale, for other companies to generate a competition against Free Basics, this would create a temporal market hard to change.

This complex and initially costly structure involved in the Free Basics’ platform generates a strong economic power to Facebook due to its great market share and a dominant power by lack of competitors. Free Basics, however, ought to be analyzed by means of its efficiency, intelligent scale economy and a scope that would guarantee a beneficial context to consumers, especially by offering free content.

In a more objective analysis, one can observe that the North region of Brazil has a great disparity from others when it comes to availability of services (which is also important for rural areas) and even for safety reasons, privacy and contact with dangerous content, according to TIC Households research.

Facebook, despite demonstrating the existence of a social interest in this initiative, will obtain something of great value in the digital age: personal data. Therefore, an information previously unavailable online will have one or a few companies with access to its contents. This raises possibilities and reaches in a broader sense the market of digital data, but would also mine competitive environments and promote monopolies.

While analyzing this data, we should consider consumers’ interest in having access, searching for a competitive market that allows future agents to compete and avoid new flaws. Therefore, promoting connectivity and generating social and economic development in areas with no digital access is something to look for and to protect. However, this access should really guarantee freedom of expression and consumer’s well being, so that there is no misuse of a project with a huge social impact, exclusively financial and with great possibilities of being appropriated by the market. Thus, free access is what is ideal, such as the regions’ growth and integration to an important new model of economic and social relation: the Internet.

About the authors

Lucas Costa dos Anjos has a Master and an undergraduate degree in Law by Universidade Federal de Minas Gerais (UFMG), with a complementary degree at Baylor University School of Law. Has a Specialist degree in International Law by Centro de Direito Internacional (CEDIN). Is a CAPES scholar and a member of the Study Group on Intellectual Property, Internet and Innovation (GNet).

Marcos Henrique Costa Leroy is an undergraduate law student at Universidade Federal de Minas Gerais, and a researcher with a scholarship at the Study Group on Economic Law (GPDE) e of the Study Group on Intellectual Property, Internet and Innovation (GNet). Studied at Université de Lille II – Droit (France) subjects such as copyrights, economic analysis of law, and economic analysis of crime.