Of data capping, competition and consumer rights

This article was authored by Grace In Mono, and was originally posted on telecomasia.net.

Exactly two years to the month after I wrote about the “end of unlimited data plans” in the Philippines, we are back to talking about telcos’ fair use policy (FUP) on data usage and how it, in effect, nullifies the point of consumers for subscribing to “unli.”

After the deregulation of the nation’s telecom sector in the early ‘90s, one would think that the primary roles of the regulator would be to promoting competition and protect consumer rights. In all fairness, the National Telecommunications Commission (NTC) does try, with its limited resources and all. But its stance seems vague and actions weak on checking and ensuring quality of internet service.

The NTC does not prohibit data capping. Telcos are allowed to implement their respective FUPs purportedly to protect their subscribers against the less than 5% who hog 80% of the bandwidth.

But over the past week, with the complaints over data capping getting aggravated by issues on spam SMS and slow internet connection, the issue reached yet another tipping point. After some media attention, the regulator had to react, somehow.

This is an all too familiar scenario that is happening all too often. How many times do we have to see this cycle of constant complaints and media attention before the government steps in and does something to address the problem, for good?

Internet in the Philippines is slow and expensive. And consumers get cut off or are given slower connections once they’ve reached a usage cap.

Globe Telecom’s FUP puts a threshold of 1GB per day or 3GB per month, while Smart allows for a 1.5GB per day, both for mobile browsing but depending on the data plan.

In principle, imposing a data cap makes sense. When you have a finite amount of bandwidth and a growing pool of subscribers, it is logical to put a usage cap so that all consumers would be able to get the same service. Also, data capping is a “global industry practice” of telcos anywhere in the world, one ISP said in a statement.

But in reality, subscribers buy into unlimited data plans because of what they need, not because of what they think the ISPs could actually offer (because they ought to offer service as advertised, right?) or what the next consumer is not allowed to use.

According to Globe, “media streaming and downloading of torrents are considered… excessive use.” So that means goodbye YouTube, Pandora, and other similar online activities that, to me, are common fare at this day and age. Smart’s FUP, on the other hand, is meant to regulate customers “whose improper or abusive use of mobile browsing may jeopardize our ability to deliver the best customer experience to other subscribers.”

But how does an operator discriminate the abusive data hoggers from the typical consumer? It does not. Once the predetermined data usage threshold is reached, the consumer is informed by the ISP and his connection is shifted to 2G browsing speed regardless of reason for reaching the cap.

For Winthrop Yu of the Internet Society – Philippines Chapter (ISOC.PH), the very low usage caps are an indication of over-subscription. And this so-called industry practice is making it “nearly impossible for Filipinos to take advantage of online education (e.g. Coursera, Udacity, and even the University of the Philippines’ Open University) without getting hit with a throttling cap. The data usage caps are, therefore, anti-education and throttle human capital development.”

Globe, having received a lot of flak lately, posted an infographic to explain how their FUP is in fact, well, fair. Globe users were quick to react, with a few pointing out that 3GB per month is useless and that they did not sign up for a “limited” data plan. One suggested that it was time to switch to Smart.

Not to be outdone, Smart users complaining about the FUP set up their own Facebook page. Funnily, one complainant said, “Globe subscribers still got it good.”

Ahh, the beauty of competition!

Democracy.Net.PH, a group of citizens who led the drafting of the first crowd-sourced legislative bill on the “Magna Carta for Philippine Internet Freedom” recently issued a brief on data capping, complete with a survey of data capping policies of the country’s ISPs. The group outlined the perils of data capping, and how it is detrimental to competition and consumers’ rights.

In the spirit of calling a spade a spade, let’s label a service for what it really offers. Maybe the ISPs should consider renaming unlimited data to “conditional limited data.” Because calling it unlimited sounds like a marketing scheme designed to make consumers hungry, and pay to get all that tasty-looking chicken in the buffet. But the consumers don’t get a refill until after some time, because the kitchen ran out of chicken in the freezer. And the cook is not telling.

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Categories: Government Regulations · Other Posts · Wireless