Your browser is currently blocking notification.
Please follow this instruction to subscribe:
Notifications are already enabled.

A Data-Driven Argument On Why Marc Andreessen Is Wrong About Free Basics

A Data-Driven Argument On Why Marc Andreessen Is Wrong About Free Basics

TRAI’s recent decision to ban differential net pricing in India evoked a varied set of emotions across the spectrum — from exultation from Net Neutrality supporters to inchoate murmuring from certain Twitterati to “disappointment” from Mark Zuckerberg himself whose company’s Free Basics program was the centerpiece of this battle.

While most of these reactions were predictable, mirroring the interests and imperatives of the dramatis personae, there was one particular reaction that was, at least to me, quite surprising.

This was from Marc Andreessen — one of the doyens of the first generation of the web, the creator of what is generally regarded as the first widely-used internet browser.

Notwithstanding the fact that Marc is on the board of Facebook (and is therefore entitled to be grouchy about a decision that impair’s Facebook’s corporate interests), this reaction was a surprise because it resorts to a moralistic line of argument rather than one that is based on data or any sort of empirical evidence.

Especially so, given the fact that Marc now runs a venture capital firm, Andreessen Horowitz, that prides itself on adopting a deliberate and thoughtful data-driven approach to investing. Moreso, because his other acolytes also adopted a similar stance that weighs heavily on moralism and pretty much nothing on facts.

So what do the facts say?

Well, for starters, Free Basics is not some hypothetical proposal that can be judged only in theory — in India itself, it has been running for over a year!

Given that Free Basics has already has a decent run, any argument that posits that it is beneficial in some meaningful manner should have been clearly demonstrable by now.

So let’s take up each of the moralistic arguments that Marc and the a16z team have been orchestrating and evaluate them against the evidence available:

“Free Basics is the solution to connecting the next billion at the bottom of the pyramid”

If this statement was true, Free Basics should have brought on board a significant number of presumably disenfranchised Indians online in the one year or so that it has been around.

So how many people has Free Basics actually brought online?

Tellingly enough, Facebook has never released any definitive numbers around the program so far. If one were to piece together the answer from various PR fragments, the answer seems to be one million (as of October 2015).

Let’s take this number at face value and evaluate it against the backdrop.

By some estimates, as many as 100 million people came online in India in the last year or so (the total number of online users in India as of today is around 300 million).

Against this number of 100 million new online users, the one million that Free Basics quotes is minuscule. If Free Basics was even remotely the silver bullet that Marc and his acolytes claim it to be, it is difficult to dispute that this number should have already been higher by an order of magnitude.

“Free Basics is about connecting the “world’s poorest””

I am not sure if Marc and his supporters have seen the advertisements that Facebook and its telco partner had released when (the original appellation for Free Basics) was launched in India. Here is a sample representative ad:

If you are awestruck by how cool India’s “poorest” folks seem to be, don’t be…because these folks, the target audience for Free Basics, are far from being India’s poor!

As is plainly obvious, the original target audience of Free Basics was not India’s poorest who have never come online but far more so, students and millennials to whom the hook was about surfing for free.

Of course, Facebook subsequently completely changed their marketing by building a media blitzkrieg showcasing various “poor” people who have benefited from coming online, presumably through Free Basics.

The true test of whether Free Basics is connecting the disenfranchised can be resolved simply by analyzing how many of its users came online for the first time through the program.

Again, neither Facebook nor Marc and his cohort have released any numbers that definitively demonstrate this contention. But by Facebook’s own admission, about 80% of the one million users were already users of the full Internet who signed up to try the offering of free data. They’re not, as Marc puts it people who weren’t online and were “being denied”.

This basically means that in the time that Free Basics has been available in India, a mere 200,000 people came online for the first time through the program — hardly a number that justifies the tall claims espousing Free Basics as a panacea.

“Free Basics is good because some connectivity is a big improvement over no connectivity…especially so for poor people”

As explained above, Free Basics was hardly something aimed at poor people and even less so, targeted at people who have “no connectivity” — this entire narrative painting it as a choice between some connectivity and no connectivity is false and disingenuous.

Be that as it may, lets take a look at what the 200,000 Free Basics users who came online for the first time feel about this. After all, actions speak louder than words and if some connectivity was indeed better than no connectivity, these folks would be the people best suited to answer this conclusively.

By Facebook’s own admission, 40% of this set (80,000 users) “graduated” to the full internet — i.e. they weren’t happy enough with “some connectivity” and decided to pony up and pay for full connectivity (presumably by signing up for a paid plan from Facebook’s telco partner). And this is the best part — they did this within 30 days of signing up for Free Basics! So it basically took these people less than one month to convince themselves that some connectivity is not good enough and is a poor substitute for full connectivity!

What about the rest?

Again by Facebook’s own admission, 55% of the people (110,000 users) who stayed on “churned” i.e. they dropped out of Free Basics and didn’t sign up for any paid plan. So clearly for this set, no connectivity (or at least the presumption thereof) was better than some connectivity.

So that leaves just 5% (50,000 users) who have signed up for Free Basics and are still using the program as of the last announced date.

I am sure even Marc will agree that this number is a mere drop in the ocean.

“Banning Free Basics is wrong because this was decided by folks who have access to the Internet rather than those who don’t have it and can’t afford it”

So all the numbers provided above are ones that I have pieced together from various media reports — let’s assume for a moment that they are all widely inaccurate.

In which case, I hope Facebook or Marc himself (or any of his supporters) can provide the real numbers that empirically establish that Free Basics has indeed achieved any of the goals that it ostensibly purported to.

More pertinently, the question that one has to ask is why these numbers weren’t made available to TRAI during the elaborate consultation process that it went through over the last few months before making a decision on differential pricing.

Contrary to what Marc and the tweet above says, TRAI didn’t take this decision on some whim, neither was it dictated by any activist or lobby.

On the contrary, TRAI set up an extremely well-regimented process where inputs were solicited from all parties.

If Free Basics was indeed anywhere as beneficial as Facebook or Marc claims, this consultation process was the ideal opportunity to provide evidence that duly confirmed this.

For instance, why didn’t Facebook provide the actual number of users who have benefited from Free Basics hitherto in India and provide real testimonials from such users to buttress its case.

Instead, Facebook resorted to what TRAI itself criticised as a “crudely majoritarian and orchestrated opinion poll” that involved uninformed Facebook users, most of whom had themselves never experienced Free Basics, send in a boilerplate request to “save Free Basics”. TRAI regarded these responses largely as spam rather than as something that aided informed decision-making. This was therefore singularly Facebook’s failure.

The bottom-line is that this ban on differential pricing was not decided by some elitist group of activists who have some un-articulated vested interest to prevent India’s poor folks to come online but by TRAI in an extraordinary democratic process that was both rigorous and comprehensive. And remarkably courageous.


By some estimates, Facebook spent as much as $45m in a high-decibel media campaign to orchestrate support for Free Basics.

Given the ban on differential pricing, the denouement of this investment was a fat big zero.

This is particularly sad because contrary to what Marc and others say, data connectivity is not expensive in India. There are some plans that give you 2GB of data for just $1.5 a month.

One can parse this in two ways.

Firstly, imagine how many users Facebook could have brought online with this same spend if they had diverted the budget to subsiding first-time users like how Aircel and others have done. By some estimates, two-thirds of India’s online users already access at least one of Facebook’s properties (Facebook itself or WhatsApp) once a day — widening the funnel without any artificial constraints would have inevitably been a net-win for Facebook given this monopoly dynamic.

Secondly, the explosion of mobile phone usage in India even among folks who could be regarded as “poor” aptly demonstrates that contrary to what some people might believe, poor people are more than capable of demonstrating agency and adopting technology on their own — as long as they see a clear and visible path towards a better standard of living. Somebody who can afford a smart phone for Rs. 3,000 (around $40) can and will sign up for a data plan that cost her $1.5 per month if she sees that it improves their ability to earn a living. There is absolutely no need to offer a condescending promise based on altruism to bring these folks online. They will do so on their own time and at their own pace with or without any external help or artificial incentive.

I hope Marc and his SV acolytes recognize this and free themselves of the post-modern “white-man’s burden” they seem to have yoked themselves with…

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.