Zuckerberg’s Internet Vision Sure Likes Facebook

Facebook Inc. founder Mark Zuckerberg is thinking big about how to increase Internet access in the developing world. That’s an ambitious and laudable goal. Incidentally, it could also be very profitable for Zuckerberg’s company.

This week, Facebook and a few other companies announced a partnership, Internet.org, with plans to expand access “to the two-thirds of the world who are not yet connected.” They want to make it cheaper to get online, improve the efficiency of data usage and encourage business models that can help poorer consumers connect more easily.

This would be good for the world’s poor and marginalized -- and good for Facebook, too, as the newly connected begin obsessively updating their Facebook profiles. In principle, that’s great: the kind of doing-well-by-doing-good synergy sought after by civic-minded entrepreneurs the world over. But before we beatify Zuckerberg for this effort, let’s consider some of the details.

The plan envisions most people getting online via mobile phones. This makes sense, because phones have quickly spread through the developing world, but expanding the data networks necessary to connect them all to the Internet could prove hugely expensive. As Joshua Brunstein of Bloomberg Businessweek points out, there are daunting technical and regulatory hurdles to taking full advantage of the networks that already exist. Building capacity to handle the demands of billions of new users will require huge investments -- in land rights and cellular towers, in power generation and maintenance.

Zuckerberg agrees, but if he has a plan for meeting these costs, he hasn’t divulged it. A white paper he wrote about the project had plenty of high-minded rhetoric -- “I believe connectivity is a human right” -- but very few details. Presumably, paying for it all is where governments and taxpayers come in.

And, as always with Facebook, the wondrous free benefits come with a catch. Or two catches, in this case.

First, mobile phones are cheap and plentiful, but mobile data plans tend to be expensive and less popular. Zuckerberg has a solution: Offer “basic services” over data networks at no charge. Once users get used to these services, they’ll start to discover what else they’re missing on the Internet -- and have an incentive to pay for better data plans to access it. So what might qualify as a “basic service”? Zuckerberg suggests messaging, search engines, Wikipedia -- and, oh yes, Facebook. Users would be free to choose other social networks: They’d just have to pay to access those.

Second, many mobile-phone users in the developing world use prepaid calling cards -- a technology that makes users anonymous. This is annoying to a social-media entrepreneur like Zuckerberg, who makes his money by collecting personal information and selling it. He has an answer for this as well: “Giving people the ability to link their Facebook or other accounts with operators could help solve these problems and make it easier to provide better service.” That’s one way of looking at it.

Zuckerberg’s thinking makes perfect sense from a business perspective. A study last year by the Pew Research Center found that once people in developing countries get online, they tend to engage with social networks at very high rates. In countries such as the Philippines, Facebook increasingly is indistinguishable from the Internet; it’s all people want. As Facebook’s growth slows in the U.S. and other developed countries, the unconnected present a great opportunity for expansion. They’re a vast middle class in the making, and they’ll eventually have great spending power of their own.

The uncharitable way of looking at Zuckerberg’s charitable endeavor, in other words, is to see it as an effort to permanently entangle Facebook in the lives of the next wave of Internet consumers, and to attract a public subsidy at the same time.

Greater connectedness in the developing world is an eminently worthy goal: It would speed economic growth, raise living standards, boost employment, expand access to education and generally improve the lot of people in need. But it shouldn’t be achieved at the cost of a disguised public subsidy to a particular enterprise or in ways that create an unfair competitive advantage. Praise Zuckerberg for his vision, by all means -- but bear that in mind.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.