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Free Web Called Threat To Net Neutrality in India

NEW DELHI—Hundreds of people showed up at an auditorium in India’s capital on Thursday for a passionate hourslong debate about whether Facebook Inc. and others are undermining freedom of the Internet by offering free services that give people limited access to the Web.

Representatives of India’s cellular-service operators joined net-neutrality activists, startup executives and regular Internet users for an open-house discussion hosted by the Telecom Regulatory Authority of India. The session centered on the importance of net neutrality, a principle that holds that the Internet is a public good and all data on it should be treated equally. 

Discussion of the concept, which was little-known in India until last year, has exploded into a full-blown war of words between some net-neutrality advocates and supporters of Facebook.

Since last year, Facebook, along with India’s fourth-largest telecommunications company, Reliance Communications Ltd., has been offering what it calls Free Basics, an online service that allows free access to a limited selection of websites.

The social-media giant has been teaming up with cellular companies in many emerging markets to offer Free Basics as an introductory sample of what the Internet has to offer. If users stay on the free service they aren’t charged data fees while surfing.

Facebook’s high-profile attempt to offer the service, which included an extensive ad campaign and a visit to India by founder Mark Zuckerberg, triggered a growing backlash from people who say the service violated net neutrality.

Critics of Free Basics and similar services say companies are trying to restrict access to just a portion of the Internet. Facebook said it supports net neutrality and its program is designed to create new Internet users and doesn’t violate net neutrality.

As the debate has heated up recently, the TRAI told Facebook to stop offering the service so regulators could gather more opinions about how regulations should apply.

The discussion on Thursday was the penultimate step in the Indian regulator’s weekslong decision-making process. In its call for opinions about what should happen, it has received more than 1.5 million written responses. The regulator was overwhelmed by the “responses on responses,” said R.S. Sharma, chairman of the authority.

A decision by the regulator is expected before the end of this month.

A billboard displays Facebook's Free Basics initiative in Mumbai, India, in December. PHOTO: DANISH SIDDIQUI/REUTERS

In the TRAI auditorium, a crowd of corporate executives, startup founders and young software coders were each given a few minutes to present their arguments to a panel of officials seated onstage. More than 30 people spoke; many took aim at Facebook.

Allowing Facebook’s Free Basics to operate in India would “destroy the innovative tapestry of this country once and for all,” said Pulak Bagchi, head of legal and regulatory affairs at Star TV’s India unit. Star TV is owned by 21st Century Fox, which was part of the same company as Wall Street Journal owner News Corp until mid-2013.

If they are allowed to, Internet-service providers would pick and choose which services users could access for free, putting others at a competitive disadvantage, Mr. Bagchi said.

Facebook’s representative, who identified herself only by her first name, Deepali, reasserted the company’s position that its service wasn’t created to try to control or restrict the Internet. She asked the regulator to allow “innovative models that expand access and bring more people online, such as Free Basics.”

Indian cellular- and broadband-service providers said allowing some services free is part of healthy competition, which is good for consumers.

Indian consumers have benefited from price competition on everything from airfares to pizza, and competitive price cutting on the cost of making a phone call has put India’s cellular rates among the least expensive in the world.

“The TRAI allowed differential pricing for voice [calls], and voice tariffs really crashed,” said Amit Mathur, a vice president at Reliance Communications, referring to the price competition allowed early in the century. Permitting companies to compete on cost for Internet services would drive down prices in a similar way, he said.

 Others noted that telecommunications companies are public utilities. They can set the price for their services, but they shouldn’t be allowed to decide how consumers use it.

 A phone company restricting where people can surf on their smartphones would be like telling people which businesses they are allowed to call on their phones.