Facebook’s International Business Blunder: Following In The Footsteps of Google

With good intentions, and also a good dose of Facebook business strategy to expand its base of users, Mark Zuckerberg has struck out to promote Free Basics, a free limited Internet for the poor in less developed countries sponsored by Facebook and its local telecommunications partners. While on the face of it Free Basics would seem to have merit, Zuckerberg has run into a wall of opposition.  On close inspection of the details, Facebook’s problem, despite all of its global corporate sophistication, appears to be naïveté about the foreign markets it is trying to enter. It is possible to argue that Zuckerberg and Facebook have the best of intentions and sound arguments.  But the best of intentions and sound arguments mean nothing if the key element lacking is a clear understanding of the targeted foreign market, and the crucial need to adapt to it or fail.  Zuckerberg could have looked no further back than 2013 for clues to why he has failed.

In 2012 and 2013, I was involved in an effort to deploy wide area wireless Internet capability to broad swaths of India. This involved working with large Indian corporate partners. We were also working at a time when Google, Microsoft, and others were also busily competing to deploy so-called “white space Metro WiFi” to rural areas in lesser developed countries. Google was also experimenting with its “loon balloon” project to use high altitude balloons to deploy Internet access points in remote areas.  It quickly became clear to us that the Indian government and corporate officials wanted only an indigenous Indian Internet solution, which fit our strategy of working with Indian partners.  Google and the other big U.S. based companies were viewed as neo-colonialists. Ironically, on March 19, 2013, Google Chairman Eric Schmidt wrote an editorial in The Times of India, “Which Internet Will India Choose,” in a well-intentioned effort to convince Indian leaders of the Google vision for the Internet in India.  For all intents and purposes, Schmidt’s editorial landed on deaf ears in India.  Also, regrettably, Indian corporate culture being what it is, not much happened on the Indian side to develop their own Internet deployment solution. All of this is not unusual in foreign markets.

Read more: Eric Schmidt: Which Internet Will India Choose?

As a veteran of high technology international business, I am intrigued by these international business blunders by otherwise very sophisticated business leaders and corporations.  They seem to repeat themselves over the years, sometimes in different ways and in different markets. Years ago I stumbled on David A. Ricks book, Blunders in International Business, now in its fourth edition, with new and updated case studies.  It is enlightening and also quite funny.  I recommend the book to Mark Zuckerberg.

Mark Zuckerberg can’t believe Egypt  & India  aren’t grateful for Facebook’s free internet

The nerve. (AP Photo/Rajesh Kumar Singh)

December 28, 2015Quartz India

All Facebook CEO Mark Zuckerberg wants to do is make the world a better place for his new daughter. While he’s technically on paternity leave, he couldn’t sit idly by as India attempts to halt Internet.org, Facebook’s initiative to provide free but limited internet to the developing world.E

Last week, the Times of India reported that the country’s telecom regulatory body had asked Facebook’s partner, wireless carrier Reliance, to cease the Internet.org service as it determines whether operators should be able to price their services based on content. Responding to criticisms of the program, Zuckerberg penned an op-ed published Dec. 28 in the English-language daily. In it, he expressed annoyance that India is debating net neutrality—a principle dictating that telecom operators provide people with equal access to the internet—as the country struggles to connect its citizens to the internet.

In the process of defending Internet.org, Zuckerberg paints India—where about a billion people are not connected to the internet—as backwards for even daring to question the benefits of Facebook’s charity-like endeavor.

“Who could possibly be against this?” he asks passive-aggressively. “Surprisingly, over the last year there’s been a big debate about this in India.”

Yes, net neutrality is a big deal—and not just in India. In the US, for example, an appeals court is currently examining the legality of a new set of net-neutrality rules enacted by the Federal Communications Commission this year. But Zuckerberg almost portrays net neutrality as a first-world problem that doesn’t apply to India because having some service is better than no service.

Net neutrality activists have long argued that Internet.org provides a “walled garden” experience because the sites that users can access for free are determined by Facebook and its telecom partners, essentially making them gatekeepers to the internet for poor people.

While Zuckerberg acknowledges that Internet.org, which is currently active in more than 30 countries, does not provide people with access to the full web, he argues that it’s a step in the right direction. According to the Facebook CEO, half of the people who come online for the first time using Internet.org decide to pay for full internet access within 30 days.

Instead of wanting to give people access to some basic internet services for free, critics of the program continue to spread false claims–even if that means leaving behind a billion people.

Instead of recognizing the fact that Free Basics is opening up the whole internet, they continue to claim–falsely–that this will make the internet more like a walled garden.

Instead of welcoming Free Basics as an open platform that will partner with any telco, and allows any developer to offer services to people for free, they claim–falsely–that this will give people less choice.

Instead of recognizing that Free Basics fully respects net neutrality, they claim–falsely–the exact opposite.

Zuckerberg continues by offering an anecdote of a farmer named Ganesh, who uses the free internet service to check weather updates and commodity prices. “How does Ganesh being able to better tend his crops hurt the internet?” he asks rhetorically.

But examined more closely, his arguments don’t directly address the concerns of net neutrality activists. For the people who choose not to upgrade or can’t afford to pay for full internet access, Internet.org does indeed provide a walled garden of online content. Millions of people already have a skewed perception of the web, believing Facebook to be the internet, a Quartz analysis has shown.

Furthermore, while Facebook can add more telecom partners, which would theoretically open up the number of sites and services Internet.org users could access for free, it currently has only one partner in India, Reliance.

Zuckerberg also fails to address the claims that zero-rated services such as Internet.org amount to economic discrimination—that this is essentially poor internet for poor people. Furthermore, in an op-ed published in the Times of India in October, net-neutrality advocacy group Savetheinternet.in quoted Tim Berners-Lee, father of the internet, as saying: “Economic discrimination is just as harmful as technical discrimination, so [internet service providers] will still be able to pick winners and losers online.” Facebook’s walled garden could very well determine the sites and services that will succeed in India.

Over and over again, Zuckerberg has pointed to research showing that internet access can help lift people out of poverty. The fact remains that Internet.org provides limited, slow, and subpar access, and these limitations make it all the more difficult for people to climb the economic ladder. As Naveen Patnaik, chief minister of the Indian state Odisha, has said: “If you dictate what the poor should get, you take away their rights to choose what they think is best for them.”

The Digital Utopian Vision of Marshall McLuhan and Stewart Brand Is Cracking

It appears to me that the original vision and promise of the Internet, referred to by many as Digital Utopianism, is at severe risk of deteriorating into a “balkanized”  and severely impaired World Wide Web.

Internet barriers, censorship, protectionist Internet policy, and ubiquitous surveillance seem to be the emerging new reality.  Notable digital luminaries the likes of Vin Cerf and Bill Gates have been questioned on this point, and both have expressed no major concern about deterioration of the freedom of the Internet or with the original Utopian vision.  The argument is that the World Wide Web cannot be effectively blocked or censored.  Google would probably respond that their “loon balloons” could simply be launched to counter censorship. As a long time Silicon Valley high tech executive, I understand this optimistic view, but the facts on the ground are now providing serious evidence that the Internet is under attack, and may not survive unless there is a significant shift in these new trends.

This week alone, Turkey’s Erdogan has tried to block both Twitter and YouTube to prevent Turks from viewing evidence of his corrupt government. This morning’s New York Times reports Edward Snowden’s latest revelation.  While the U.S. government and media were investigating and publicly reporting on Chinese government Internet espionage and Chinese network equipment manufacturer Huawei, the NSA, the British GCHQ and Canada’s  Security Intelligence Service (CSIS) ,  were all collaborating, doing exactly the same thing. The hypocrisy and irony of this is not lost on either the Chinese or the Internet community. CBS 60 Minutes reported on the Chinese espionage, but has been essentially silent on NSA’s own transgressions. 60 Minutes even broadcast a report that NSA metadata was essentially harmless, which has now been shown to be false. The 60 Minutes objective reporting problem is the canary in the coal mine of the corporate takeover of media and the Web.  Protectionist policies in various countries targeted against Google, Microsoft and others are emerging. One of the many negative effects of the NSA revelations was the announcement this week that the United States was giving up control of the International Committee for Assigned Names and Numbers (ICANN), which essentially sets Internet traffic policy. Finally, this week, Netflix spoke out forcefully against the “peering agreement” it was blackmailed into signing with Comcast to insure “quality of service” (QOS) for Netflix programming to the edges of the Web.

Read more: NSA breached Chinese servers

Read more: Netflix Thinks Peering Should Be A Net Neutrality Issue

I recently came across Professor Fred Turner, Professor of Communication at Stanford. It has been a revelation for me.  His book, “From Counterculture to Cyberculture’ is an acclaimed milestone work. Turner has articulated the World I lived in the counterculture of the 1960’s and in the early Silicon Valley. His work explaining the evolution from the “counterculture” of the 1960’s to the emerging new “cyberculture” of the late 1980’s and 1990’s is an excellent record of that time in northern California.  This was the World of Steve Jobs at that time and his personal evolvement to a digital Utopian.  It is detailed in Jobs biography, and in Jobs wonderful Stanford University 2005 commencement speech, in which he also acknowledged the importance of Stewart Brand and the Whole Earth Catalog.  This was also my countercultural World as a Communications student at San Jose State at that time, in the heart of the Silicon Valley, and subsequent high tech career, beginning at Intel Corporation.  But even Professor Turner has expressed his own ambivalence about the future direction of the Web, though only from the standpoint of less worrying lack of diversity of Web communities. My concern is much more deeply based on current evidence and much more ominous.

Fred Turner, Stanford Professor of Communication – Counterculture to Cyberculture

Stewart Brand, the father of the Whole Earth Catalog and the original digital utopia visionary, has been rethinking its basic concepts. Brand has come around 180 degrees from environmental Utopianism based on “back to the land,” and is now embracing the future importance of urban enclaves. While this new urban view is now a widely held idea by many futurists, it can also be viewed as another facet of the end of digital utopia.  This TEDTalk by Brand lays out his new vision.  Where we go from here is anyone’s guess.