Net neutrality fans had better cover their eyes and ears: Facebook(s fb) has bought a Finnish startup called Pryte, which helps mobile operators charge for data on a per-app, short-term-pass basis. According to a Tuesday post by Pryte, the purchase will aid Facebook’s Internet.org initiative on its quest to connect the unconnected.
The purchase price remains undisclosed, and it seems Facebook was mostly interested in hiring the Pryte team (Pryte’s app has never been released to the public.) Facebook said in a statement:
“The Pryte team will be an exciting addition to Facebook. Their deep industry experience working with mobile operators aligns closely with the initiatives we pursue with Internet.org, to partner with operators to bring affordable internet access to the next 5 billion people, in a profitable way.”
Facebook, the money-spinning offramp
Facebook already has “Facebook Zero” deals with carriers in developing markets that see the social network offered for free, with users paying the carrier if they want to click through to normal web content. This is a way to get people on the internet for the first time, ideally as paying users, but the practice has been banned in Chile because it’s anticompetitive — it creates a huge blocker for any potential Facebook rival.
The ability to charge for data on an ad hoc basis could build on this strategy. It’s not hard to see a scenario where Facebook acts as a portal, operated in conjunction with local carriers in developing markets to provide a metered offramp to the paid-for web or to other chosen apps. That’s certainly a way to get poorer people onto the mobile internet, but it’s a completely different ballgame from the neutral, flat-rate, open-web model enjoyed in developed markets.
I’m being a bit speculative here, but not wildly so, according to sources close to the action. The Pryte buy certainly goes well with Facebook’s purchase last year of data compression specialist Onavo — now the social network can go to carriers with the tools to help them ease the load on their networks while charging people on a basis that’s not reliant on data volume.
As for how much this sort of thing will hurt the egalitarian web, that’s a matter of debate. A Disruptive Analysis report into new non-neutral mobile broadband business models, published this week, suggested that various non-neutral models will account for only six percent of overall mobile internet revenues in five years’ time. Dean Bubley, the report’s author, reckons most of these neutrality-busting models will prove unrealistic in practise. However, he told me Facebook is probably better-placed than anyone else to make a combination of zero-rating and paid-app tactics work.
According to Bubley, one of the biggest blockers to these new-fangled schemes lies in apps’ porous borders (data flows between them) and Facebook may be able to use Pryte’s smarts to overcome these technical problems.
“It’s always hard for telcos to get to grips with [charging on a per-app basis] because the application environment changes too fast for these things to keep up with — there’s new stuff that breaks third-party middleware,” Bubley said. “Facebook is one of the few companies that has a number of software engineers to throw at these things to make sure they work, and also do network integration.”
He also pointed out that Apple(s aapl) isn’t much of a player in the developing world, making these new models somewhat more workable there: “You can get away with doing a hell of a lot more on Android(s goog) or web-based OSs than you can on iOS. Apple doesn’t give you access to build a really good connection manager and do things app-by-app.”