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Facebook's Zuckerberg Defends Internet.org

Facebook CEO Mark Zuckerberg used the bully pulpit of the company's quarterly earnings call to defend its controversial Internet.org program to bring the world's disconnected people online.

In India alone, Internet.org has connected more than 1 million people, but still has a long way to go, with more than a billion of the country's 1.258 billion people not connected to the Internet, Zuckerberg said. Internet.org currently works with just one operator in India, in one part of the country. (See Facebook Targets India's Hinterland .)

Internet.org has provided free basic Internet service to people in 29 countries, and is open to all developers, Zuckerberg said.

Internet.org has faced resistance in India, with critics saying the quality of service is lousy, and net neutrality advocates in India saying the service is a walled kingdom that favors Facebook and its partners.

But Internet access can be life changing for those who don't have it, Zuckerberg said. "If you don't have access to a good school, then getting basic Internet access could be your best educational information. Or if you don't have access to a good doctor, then getting access to the Internet could be the only way that you can learn about how to avoid certain diseases, or how to raise your kids and help them avoid certain diseases." Internet access can also help people find jobs. Research shows that for every ten people who connect to the Internet, one gets lifted out of poverty and one job gets created, Zuckerberg said.

Facebook views China, where Facebook is blocked, as another big opportunity. "Obviously, you can't have a mission of wanting to connect everyone in the world and leave out the biggest country," he said. Facebook will need to get access to China "over the long term," he said. For now, China is "already one of the biggest advertising markets that we have," as Chinese companies look to the social network to connect with international customers.

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Also on the earnings call, Facebook described milestones for its messaging products, which are both competitors to and opportunties for traditional carrier offerings. Apps like Facebook's WhatsApp and Messenger compete with carriers' own messaging and voice services, while also driving demand for mobile data services.

WhatsApp has hit 900 million monthly active users, while Messenger has 700 million monthly actives, Zuckerberg said. Also, more than 900 million people use Facebook Groups every month; groups are kind of a way of splitting the difference between Whatsapp and Messenger, which are private one-on-one services, and Instagram and the Facebook feed, which are more public.

Facebook reported revenue of $4.5 billion, up 41% year-over-year, driving an 11% annual earnings increase, despite a 68% increase in costs and expenses, as the company spends on projects including AI, virtual reality and Internet.org. Facebook traded at $107.65, up 3.57% after hours.


— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

DHagar 11/17/2015 | 3:32:55 PM
Re: Zuekrbert Defends Internet.org kq4ym, that makes sense.  That would be a good strategic move, which he is good at.  They can replicate their model and open up markets with high growth potential.  That should work!
kq4ym 11/17/2015 | 2:40:48 PM
Re: Zuckerberg Defends Inernet.org Even though "the service is a walled kingdom that favors Facebook" I suspect free will trump even that objection.  I would guess that Zuckerberg is ultimately trying to get into China, and the success of an India and other country project will help to get the Chinese officials to eventually open the world's largest market to Zuckerberg and leave his competitors in the dust.
mhhf1ve 11/6/2015 | 6:57:00 PM
Re: Video Analogies are never perfect.. I was trying to find one.. and came up with paid search. For many reasons, zero ratings and paid search are different. No one pays to use a search engine, etc, etc.

If there were regulations about how zero rating actually operated, I'd almost agree with you? Depending on the regulation.... 

However, nothing says that Facebook or Pandora or anyone else has to "pay the same" to the ISP to deliver "free bandwidth" services to end users -- and it would be potentially complicated to do that? Facebook could rightfully argue that it shouldn't have to pay the same as Netflix -- the two services have vastly different bandwidth requirements. So then you have different tiers of zero rating? Or what if an ISP wants to set up an auction for which services get zero rating on an ongoing basis? Should that be allowed? Maybe? But what if an ISP owns a particular content service and cuts a secret deal? Should that be allowed? Maybe not?

The airline analogy fails because there's no "new passenger that could revolutionize the seating arrangement entirely" -- whereas zero rating could inhibit the creation/growth of a new startup that no one has yet devised and that startup could potentially change the whole system. That is, the airline analogy doesn't have a scenario where it offers MarkZ a seat for the same price as anyone else in 1st class, and that enables MarkZ to take control of the whole plane and then buy the airline itself.... Analogies are just bad. 
Mitch Wagner 11/6/2015 | 6:24:53 PM
Re: Video mhh1f1ve - Paid search didn't go away because of government regulation. It went away because nobody wanted it. 

Zero rating and other net neutrality problems can be solved by requiring service providers to charge the same price to everyone for the same services. So if Facebook, Netflix, or Pandora pay for end-user's bandwidth, then any social network, video streaming service, or music streaming service should be allowed to do the same at the same price. 

Airlines offer different classes of service, but they're available to anyone willing to pay. 
mhhf1ve 11/6/2015 | 2:02:37 PM
Re: Video The downside to zero rating isn't for current services -- it's about how it shapes future services. If Facebook or Netflix or Pandora (etc, etc) are allowed "free bandwidth" to end users, then those services have an unfair advantage over other competing services. The result is that maybe zero rating is killing off innovation by raising the barriers to entry.

I understand that the likes of Facebook and Google and Netflix already have significant advantages over any smaller startups, but why allow them to get even more favors from ISPs? And additionally, zero rating then gives an ISP the power to be a gatekeeper -- an ability to crush competitive services for hire. 

What if "paid placement" in search engine results was still the norm? Perhaps it doesn't seem like a big deal, but I think the world would be a little different (for the worse) if search engines let companies pay to be at the top of the "organic" search results.
Mitch Wagner 11/6/2015 | 10:28:25 AM
Re: Video I'm not seeing the negative to zero rating. Customers get some bandwidth for free -- not seeing the harm. 
mhhf1ve 11/5/2015 | 8:19:26 PM
Re: Video Longform video doesn't seem like a great target for Facebook, given the attn spans of its users..? 

It still bothers me that MarkZ hasn't taken any steps back on the zero-rating and net neutrality issues... Can't he see that he should back down on that... and then... make sure Facebook is just prominently promoted (without zero rating). If he wants to do something charitable.. it really needs to have fewer strings attached.
Mitch Wagner 11/5/2015 | 12:51:20 PM
Video Also of interest to our readers: Zuckerberg was asked for plans for longform video. He said the company has none presently, and is sticking with its forte of allowing users to share short-form videos in the news feed. He noted that some longform video producers, like Jimmy Fallon, are chopping up their videos into short sections that are easily shareable. 
DHagar 11/4/2015 | 9:14:27 PM
Re: Zuckerberg Defends Inernet.org MitchWagner, first of all I must disclose I am not a big Zuckerberg fan - never have been.  Having said that though, he has accomplished some incredible things and clearly is producing good revenues.

The point I would make against his view is that he defines what cultures and customers wants and then fits them into his vision.  I see that as a contrast to Steve Jobs who truly mastered developing what the customer wanted and then built value for the customer.

I guess time will tell if Zuckerberg's approach is sustainable or not.
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