Facebook's Free Basics service has been dealt a severe blow by India's telecommunications regulator, which ruled on Monday that telecom service providers are prohibited from charging differently for data depending on the content or the application that the user is accessing.
The move follows strong protests by civil rights groups in the country against Free Basics, which was seen by its critics as creating a "walled garden" of select free websites, including Facebook, in the name of providing uncharged Web access to the poor.
The critics were also opposed to Airtel Zero, a platform launched by mobile operator Bharti Airtel so that app developers could offer so-called zero-rating apps with no data charges to customers after paying the operator a fee.
Anticipating a possible ban of the Free Basics service in India, Facebook tried to enlist support of users and developers. It fought back with a campaign that invited its users to send emails in support of Free Basics to the Telecom Regulatory Authority of India. The regulator at one point described Facebook's "Save Free Basics in India" campaign as a "crudely majoritarian and orchestrated opinion poll."
During the controversy Facebook CEO Mark Zuckerberg has personally defended Free Basics, which has been launched in 38 countries. In a response to critics in India, Zuckerberg said last year that net neutrality should not prevent the underprivileged from accessing the Internet. "It is not an equal Internet if the majority of people can't participate," he said.
The social networking company has also tried to promote Free Basics as an open platform on which developers can include their services, provided the services and sites meet certain criteria. But opponents have criticized Facebook's role as an arbiter.
In a consultation paper in December, TRAI had expressed concern that the acceptance of preferential, including free zero-rated, access to some websites that telecom providers "like" will implicitly lead to the acceptance of the principle that service providers may also prescribe non-attractive or prohibitive tariffs for some websites that they may "not like."
TRAI also asked Reliance Communications, the wireless carrier offering the service, to put a halt on the commercial rollout of the service, which would involve large-scale advertising and promotions, until the regulator decided on whether the differential tariff would be a threat to net neutrality in the country.
On Monday, TRAI said that except for certain emergency services, all differential tariffs for data services would be prohibited. It said it considered the view of some people that it should evaluate differential pricing schemes on a case-by-case basis, but found that option would carry "substantial social costs." Such an evaluation would have a high regulatory cost and benefit those companies that are not well-financed enough to pursue regulatory and legal options, TRAI said.
Facebook did not immediately respond to a request for comment.
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