Category Archives: Minimum Broadband Connections

Why Data Caps put a lid on you

Data capping, also known as bandwidth capping or broadband capping is a data traffic management or traffic control methodology employed by Internet service providers, network service providers, and telecommunications entities. Data capping is purposefully limiting the amount of data transfer of a subscriber’s or end user’s Internet connection.[1]

Data is measured in two ways: by transmission rate or by volume. The transmission rate is measured in bits per second. You will commonly read or hear terms like kbit/s (kilobits per second) or Mb/s (megabits per second), or MB/s (megabytes per second). Please note that there is a difference between Mb/s and MB/s. “Broadband speed” is the more familiar term used by ISPs in marketing broadband service. Data measurement in terms of volume involves measuring the total amount of data transmitted between the ISP and the end user. Units of measure used for this is MB (megabytes) or GB (gigabytes).

We can use water as an analogy.

Data could be analogous to how we measure rate and volume of water. When there is high pressure, water is pumped fast enough to get a good shower or fill a drum of water much faster. In Internet terms, the more the provider “pumps out” the data, the faster you can finish your download. So movies or youtube videos don’t buffer, when “pressure is high”, and it buffers when there is “low water pressure.” Again: you can shower when you have high transmission rate, or you’ll have to settle for buckets of water to take a bath.

While volume of water is measured in terms of litters or gallons of water stored in say a drum of water. So you fill up your computer’s storage space with your music, movie and downloads from iTunes, for example. You can fill your computer up, or burn it in disk or fill up your USB thumb drive like water was downloaded into a water tank or drum.

Data capping is like water rationing. An ISP limits the amount of water (data) you can download to enable others to get their share. The only difference is that in data capping, the “rationing” is done from the ISP. They slow down your download speed, often to a trickle, to limit your download of data.

Data capping in the PH

Broadband service in the Philippines is sold in terms of “broadband speed” (transmission rate). For example, PLDT is selling to home users its Plan 999 for PHP499 per month for up to 2 Mbps transmission rate. Globe is selling its Tattoo Home Broadband 2 Mbps transmission at Plan 1099.

The Philippines has the third slowest broadband in the Southeast Asian region, despite the reported 66% per quarter growth in broadband speeds in the local market.[2] The Philippines lags the global average connection speed of 3.6 Mbps as reported by Akami—one of the world’s leading provider of cloud solutions. The global average— 3.6 Mbps— represents a 10% upward trend in global average connection speed, with average connection speeds growing 29% year-on-year for 122 countries.[3]

The Philippines is no stranger to data capping. Most, if not all telecommunication companies and ISPs in the country have data capping policies embedded in their Fair Usage policies (Please see Annex A for examples of existing data cap policies.) These data capping policies have largely existed unnoticed. That is, until the National Telecommunications Commission (NTC) issued a draft memorandum order establishing a data cap, after which it became a hot issue in the Philippines.

The NTC issued a draft Memorandum Order (MO) on “Minimum Speed of Broadband Connections.”[4] The draft MO was said to include a clause that would allow telcos and ISPs to restrict the amount of data to be accessed by end users.[5] According to then NTC Common Carriers Authorization Department Director Edgardo Cabarios, data capping was meant to “discourage unfair use, to give everyone a chance.” The telcos and ISPs sang the same tune.

There was a loud public outcry opposing the draft MO. Two position papers opposing the measure were sent to the NTC through The ProPinoy Project: one was spearheaded by Engr. Pierre Tito Galla, an electronics engineer and now co-convenor of ICT policy advocacy group Democracy.Net.PH, [6] the other from Mindanao New Media and the Davao Bloggers through their representative Ria Jose.[7] A draft MO was also proposed through The ProPinoy Project.[8]

The immediate result was startling. The NTC was forced to remove the data capping provision from the draft[9] and hold nationwide consultations on the issue[10].

As a result of the consultations, the NTC finally released the final Memorandum Order, NTC MO 07-07-2011, titled “Minimum Speed of Broadband Connections.”[11] Engr. Galla criticized the memorandum order, pointing out its flaws. Among these was the MO’s silence on the issue of data capping, thereby effectively allowing data capping.[12] In April 2011, Globe, like Smart, announced a fair usage policy.[13] This practice continues today from both networks imposing a data cap.[14]

The perils of data capping

There is a brewing firestorm on data capping, unleashed by the recent decision of Globe to be more firm in its implementation and fed by the public’s growing discontent over the quality of broadband service offered by telcos and ISPs.

The strident public opposition to data capping begs the question: Is data capping bad? The answer is not a simple yes or no.

There are instances where data capping may be called for, such as where broadband service is abused through the illegal sharing of copyrighted material. In fact, the main argument for data capping is to curb the practices of these abusive users, who—according to the Philippine Chamber of Telecommunications Operators—hog 80% of available bandwidth even as they comprise only 5% to 7% of all end users. [15]

Data capping per se is not a bad thing. Unfortunately, data capping, as it is implemented here, is unreasonable and indiscriminate: Oftentimes, it punishes both the innocent and the abusive users.

For one, data capping favors the investor and is anti-consumer. The New America Foundation reports that “the cost of data caps are about pleasing investors, not relieving data congestion,[16] and that “the cost of delivering broadband service is decreasing, not increasing.”[17] Matthew Lasar quoting Netflix wrote, “[W]ired ISPs have large fixed costs of building and maintaining their last mile network of residential cable and fiber. The ISPs’ costs, however, to deliver a marginal gigabyte, which is about an hour of viewing, from one of our regional interchange points over their last mile wired network to the consumer is less than a penny, and falling, so there is no reason that pay-per-gigabyte is economically necessary. Moreover, at $1 per gigabyte over wired networks, it would be grossly overpriced.”[18]

Data capping also discourages competition, putting some players at an unfair advantage. “Caps can be used anticompetitively—to discourage the use of services that rival an Internet service provider’s in-house offerings,” writes the New York Times in its July 22, 2011 editorial.  “For instance, AT&T points out that Netflix hogs 30 percent of peak-hour Internet traffic in North America. Netflix also competes with television offerings on AT&T’s U-verse network. Watching TV on U-verse does not count against the data cap. Streaming Netflix does”[19]

In April 2012, Comcast excluded Xbox from their data cap plan, which watch groups in the U.S., particularly Public Knowledge’s Gigi Sohn, in particular, argued, was anti-competition.[20] Sohn said this “raises questions not only of the justification for the caps but, more importantly, of the survival of an open Internet.”[21] Sohn added “This type of arrangement is exactly the type of situation the [FCC] rules on the open Internet were designed to prevent—that an Internet service provider juggles the rules to give itself an advantage over a competitor.”[22]

More sinister is the effect of data capping in putting a lid on economic progress and human development.

The Organization for Economic Co-Operation and Development says, “Broadband and ICTs more generally are general purpose technologies with a promise of significant and far-reaching growth impacts that may arise more quickly than from other GPTs in the past. Almost every aspect of economic activity and everyday life is already affected by broadband enabled ICTs, and with rapid technological developments and a continuous stream of new applications the pervasiveness of ICTs is likely to increase”.[23]

There has been a sharp increase broadband communications activity, particular coinciding with the rise of smartphone use.[24] For example, there is a rapid, prolific real world rise in messaging applications such as WeChat, Line, Viber, Skype, FaceTime, iMessage and many others that people use to communicate with around the world for both work and family life.[25]  The effect of data cap is significant, especially in the way it has changed the way people work[26] and in across many industries. And yet, using broadband service for legitimate traffic for work can be severely penalized.[27]

There is legitimate impact of broadband on the economy.[28] Dr. Raul Katz wrote, “As seen above, according to Koutroumpis’ research, in countries with low broadband penetration (under 20%), an increase of 1 per cent in broadband adoption contributes to 0.008 per cent of GDP growth, while in countries with medium penetration (between 20% and 30%), the effect is of 0.014 per cent and in countries with penetration higher than 30 per cent, the impact of 1 per cent adoption reaches 0.023. The implication of this finding for developing countries is quite significant. Unless emerging economies do strive to dramatically increase their penetration of broadband, the economic impact of the technology will be quite limited.”[29]

 

Annexes:

Annex A –  Survey of Data Caps

Annex B  – The #MCPIF provisions relating to data capping

 

 



This is republished with permission.

(This brief on data caps was prepared by Democracy.Net.PH. Please credit Democracy.Net.PH when quoting. For more information, send email to [email protected].)

Footnotes:

[1] “Broadband Cap”. Techopedia. Retrieved 2014-01-30.

[2] Michael Josh Villanueva, “Global broadband speeds on the rise, PH 3rd lowest in region”, Rappler http://www.rappler.com/technology/news/49248-global-broadband-speeds-rising-philippines-third-lowest

[3] Akamai, “Akamai Releases Third Quarter, 2013 ‘State of the Internet’ Report”, http://www.akamai.com/html/about/press/releases/2014/press_012814.html

[4] Tag: “Broadband Cap”. The ProPinoy Project. Retrieved 2014-01-30

[5] “NTC’s proposed data caps violate consumer rights, lawyer says”. GMA News Online. Updated 2010-12-30. Retrieved 2014-01-30.

[6] “Position paper submitted to NTC on Minimum Speed of Broadband Connections”. Galla, P.T. The ProPinoy Project. 2011-01-27. Retrieved 2014-01-30.

[7] “Position Paper Re: NTC’s Broadband Capping”. Jose, Ria. The ProPinoy Project. 2011-01-12. Retrieved 2014-01-30.

[8] “A better draft memorandum order on Minimum Speed of Broadband Connections (v2)”. Galla, P.T. The ProPinoy Project. Updated 2011-01-27. Retrieved 2014-01-30.

[9] “NTC junks proposed cap on Internet downloads”. Inquirer.Net. 2011-01-12. Retrieved 2014-01-30.

[10] “NTC to hold public hearing on minimum broadband speed connection”. The ProPinoy Project. 2011-01-05. Retrieved 2014-01-30.

[12] “Ampaw: The Flawed NTC Memorandum Order on Minimum Speed of Broadband Connections”. Galla, P.T. The ProPinoy Project. 2011-07-29. Retrieved 2014-01-30.

[13] Paolo Montecillo “Globe adopts Internet ‘fair use’ policy”, The Philippine Daily Inquirer, http://business.inquirer.net/money/topstories/view/20110403-329150/Globe-adopts-Internet-fair-use-policy

[15] Cocoy Dayao, “Philippine telcos to impose Broadband cap”, The ProPinoy Project, http://propinoy.net/2011/02/01/philippine-telcos-to-impose-broadband-cap/

[17] Ibid.

[18] Matthew Lasar, “200GB to 25GB: Canada gets first, bitter dose of metered Internet”, Ars Technica, http://arstechnica.com/tech-policy/2011/01/canada-gets-first-bitter-dose-of-metered-internet-billing/

[19] Editorial Desk, “To Cap, or Not: Broadband limits need to be carefully monitored to promote innovation and competition”, The New York Times. http://www.nytimes.com/2011/07/22/opinion/22fri2.html?_r=0

[20] “Comcast Xbox Plan Sparks Debate Over Data Cap Exclusion” Telecommunications Reports, p.20, April 15, 2012

[21] Ibid.

[22] Ibid.

[23] Directorate for Science, Technology, and Industry Committee for Information and Computer and Communications Policy, “Broadband and the Economy”, Organization for Economic Co-Operation and Development, http://www.oecd.org/internet/ieconomy/40781696.pdf

[24] Kate Legget, “Forrester’s Top 15 Trends For Customer Service In 2013forrester.com http://blogs.forrester.com/kate_leggett/13-01-14-forresters_top_15_trends_for_customer_service_in_2013

[25] Raine Musñgi, Instagram, http://instagram.com/p/jylhansg0E/

[27] TJ Manotoc, Twitlonger/Twitter, http://www.twitlonger.com/show/n6aecd

[28] Dr. Raul Katz, “Impact of Broadband on the Economy: Research to date and policy issues”, International Telecommunications Union, http://www.itu.int/ITU-D/treg/broadband/ITU-BB-Reports_Impact-of-Broadband-on-the-Economy.pdf

[29] Ibid., p. 6 to 7.

Ampaw: The Flawed NTC Memorandum Order on Minimum Speed of Broadband Connections

NTC MO 07-07-2011 is a paper tigerAuthor’s Note: The full text of the National Telecommunications Commission Memorandum Order No. 07-07-2011 (Minimum Speed of Broadband Connections) was provided via email as an Adobe PDF file, in response to a request for the document.

To the best of the author’s knowledge, NTC MO 07-07-2011 has not yet been published in any newspaper of national circulation.

A sop to Filipino consumers, conceived with no regard to objective realities, and written in a lazy fashion — that, very politely, describes the NTC MO No. 07-07-2011. Not quite unlike a speech given by a traditional politician, it is prefaced by a long-winded introduction and followed by a weak policy.

To be fair, let’s begin our analysis by parsing the strengths of NTC MO 07-07-2011.

First, NTC MO 07-07-2011 requires internet service providers to be transparent in the billing of their subscribers, via Rules 1 and 2 of the order. Transparency is good for us consumers; we’ll know exactly what it is we are paying for.

Second, NTC MO 07-07-2011 requires internet service providers to be provide a minimum service reliability for their subscribers, via Rule 1. Instead of not being certain of getting what we’re paying for, the minimum service reliability ensures that we’re going to get it. In fairness to the ISPs and the NTC, a minimum service reliability of 80% is not too bad, considering the state of telecommunications infrastructure in the Philippines.

Third, NTC MO 07-07-2011 provides internet service providers good flexibility towards developing competition strategies, via Rule 1. By allowing internet service providers to offer the public various packages and prices, the ISP with the most aggressive, the most reliable, and the best-priced packages wins the market.

All that said, and despite the best of intentions, NTC MO 07-07-2011 is useless to us consumers and does nothing concrete to require good service from ISPs. Why?

First, NTC MO 07-07-2011 does not provide effectively for short-term prepaid internet connectivity. With service reliability measured on a monthly basis, prepaid internet subscriptions lasting one day, three days, or a week can easily meet 80% service reliability on paper, with the customer not enjoying the connectivity he has paid for. For instance, should a customer use a 3-day prepaid card and not be connected, his complaint will be easily dismissed once the ISP shows that he could have been connected on the other 27 days of the month, with the ISP meeting a service reliability of 90%.

Considering how much of the broadband market floats on prepaid services, that segment of the consuming public is going to continue to get screwed.

Second, NTC MO 07-07-2011 does not specify where service reliability is to be measured, instead of protecting the consumer by requiring service reliability to be measured at the subscriber end. As such, the internet service provider can very well claim to be meeting 80% service reliability or even higher, by measuring reliability at their end of the transmission medium.

This, despite at his end the consumer keeps on getting “Unable to connect to the Internet” error messages on his browser.

Third, NTC MO 07-07-2011 is silent on data volume capping. Thus, the MO allows for unreasonable data volume capping.

Therefore, a consumer with consistent 1 Mbps connection speeds can have his connection cut off every three days by virtue of a 1 GB data volume cap, and the ISP will still be completely compliant with the memorandum order, for as long as the ISP has a provision on data volume capping in fine print somewhere in the service offer/ contract/ prepaid SIM wrapper.

Fourth, NTC MO 07-07-2011 does not require ISPs to provide clear, timely, and customer-centric rebate mechanisms for customers if service reliability minimums are not met. ISPs can very well still get paid for the services they do not provide, and getting rebates will still be as easy as pulling teeth from a rabid dog using longnose pliers.

Subscribers, therefore, can continue to get screwed under the guise of “ma’am, network maintenance po kasi, di po yan covered ng rebate”, “sir, kelangan complete po ang documents and proof of downtime, tapos wait po kayo ng thirty days tapos i-claim ninyo personally dito sa office namin yung tseke”, and whatnot.

To summarize bluntly the impact of NTC MO 07-07-2011 to internet service providers, compliance to NTC MO 07-07-2011 is as simple as ISPs rewording their boilerplate contracts and marketing collaterals and ensuring that 80% reliability or higher is measured at their end. NTC MO 07-07-2011 will merely require cosmetic changes and tweaks in marketing, rather than significant improvements in service.

To summarize bluntly the impact of NTC MO 07-07-2011 to us consumers, NTC MO 07-07-2011 provides us with absolutely nothing but a wad of used toilet paper.

It’s brilliant, really. This MO will be hailed as a victory for the consuming public, with the perception of the NTC being the white knight riding to the defense against the greedy invading ISPs. The reality, however, is that the NTC MO 07-07-2011 is no more an actual strike for Filipino empowerment than the sham that was the Battle of Manila and the surrender of the Spanish troops to the Americans.

Read the full text of NTC MO 07-07-2011 here. If you want to read a proposed draft of a better memorandum order, one that serves all parties fairly, read this one instead.

And to think we were led to believe that the NTC really does have our interests at heart and does its best to serve us. Bleh.

Image from The Pulse Review (www.pulsereview.com).

Full Text: NTC Memorandum Order No. 07-07-2011 (Minimum Speed of Broadband Connections)

REPUBLIC OF THE PHILIPPINES
COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY
NATIONAL TELECOMMUNICATIONS COMMISSION

MEMORANDUM ORDER
No. 07-07-2011

SUBJECT: MINIMUM SPEED OF BROADBAND CONNECTIONS

WHEREAS, the 1987 Constitution fully recognizes the vital role of communications in nation building and provides for the emergence of communications structures suitable to the needs and aspirations of the nation;

WHEREAS, the promotion of competition in the telecommunications market is a key objective of Republic Act No. 7925 (RA7925, for brevity), otherwise known as The Public Telecommunications Policy Act of the Philippines, which mandates that “a healthy competitive environment shall be fostered, one in which telecommunications carriers are free to make business decisions and interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates;

WHEREAS, RA7925 further defines the role of the government to “promote a fair, efficient and responsive market to stimulate growth and development of the telecommunications facilities and services”;

WHEREAS, RA7925 mandates the National Telecommunications Commission (Commission) to promote and protect the consumers of public telecommunications services;

WHEREAS, it has been observed that the service providers are offering broadband/ internet connections specifying only the maximum speed;

WHEREAS, customers/ subscribers/ users have the right to be informed of the quality of the broadband/ internet connection service being provided;

WHEREAS, fixed, fixed wireless and mobile broadband/ internet access differ in transmission characteristics;

WHEREAS, mobile broadband/ internet access suffer from signal fading more than fixed and fixed wireless broadband/ internet access;

NOW, THEREFORE, pursuant to RA7925, Executive Order (EO) No. 546 series of 1979, and in order to maintain and foster fair competition in the telecommunications industry, and promote and protect the rights of broadband service customers/ subscribers/ users, the National Telecommunications Commission (the Commission/ NTC, for brevity) hereby promulgates the following rules:

1. Broadband service providers shall specify the minimum broadband/ internet connection speed and service reliability and the service rates in their offers to consumers/ subscribers/ users in their advertisements, flyers, brochures and service agreements and service level agreements. The minimum service reliability shall be 80%.

Service Reliability is measured over a period of one (1) month and calculated as

[(Hours in a day x Days in a month) - (Time internet connection speed is below minimum)(Hours in a day x Days in a month)

The service offers shall specify the service rates for a minimum broadband/ internet connection speed and the service reliability. For example: a broadband service provider can offer PhP 900.00/month for 512 kbps minimum connection speed and 80% service reliability, or PhP 1,000.00/month for 512 kbps minimum connection speed and 85% service reliability, or PhP 1,000/month for 1 Mbps minimum connection speed and 80% reliability, etc.

2. The subscribers/ consumers shall be properly informed of the broadband/ internet connection service being offered to them.

3. Service providers offering committed information rate (CIR) shall comply with NTC MC No. 12-19-2004.

4. Failure on the part of a broadband service provider to comply with this Order, the Commission shall file appropriate administrative case against said broadband service provider.

5. Any circular, order, memoranda or parts thereof inconsistent herewith are deemed repealed or amended accordingly.

6. This Order shall take effect fifteen (15) days after publication in a newspaper of general circulation and three (3) certified true copies are furnished the UP Law Center.

Quezon City, Philippines, 15 July 2011

(signed)
Gamaliel A. Cordoba
Commissioner

(signed)
Carlos Jose A. Martinez
Deputy Commissioner

(signed)
Delilah F. Deles
Deputy Commissioner

NTC to Telcos: Set minimum speed and reliability on Broadband

Newsbytes reported that the National Telecommunications Commission released a memoradum circular ordering Broadband Internet providers to set a minimum connection speed and 80 percent service reliability.

Newbytes wrote,

“The service offers shall specify the service rates for a minimum broadband/Internet connection speed and the service reliability. For example: a broadband service provider can offer P900.00/month for 512Kbps minimum connection speed and 80 percent service reliability, or P1,000.00/month for 512Kbps minimum connection speed and 85 percent service reliability, or P1,000/month for 1Mbps minimum connection speed and 80 percent reliability, etc.” the circular explained.

The NTC said it issued the circular to correct the practice of service providers who are specifying only the maximum speed in their broadband offerings.

For context on the whole minimum broadband connections issues, please checkout our coverage on it.

Why the Philippine Digital Strategy 2011 – 2016 should be scrapped

Internet Map: World Connection Density (click to enlarge)

The Commission on Information and Communications Technology recently published the Philippine Digital Strategy 2011 to 2016. The first indication that the CICT doesn’t understand the situation is indicative in its SWOT test. This isn’t to say, “Internet for all”, isn’t a good end goal. It is to say that there is no clear strategy to get there based on the Philippine Digital Strategy.

Philippine Digital Strategy SWOT test
Philippine Digital Strategy SWOT test (Click to enlarge)

What it is though, is trying to create a network for the government. To quote the PDS, it wants the Spectrum Fees collected by the NTC to be used to fund the Universal Access and Service Fund.  What this does is essentially pay for the Government’s Broadband Infrastructure, which essentially is a variation of a “national broadband”.

“A UASF uses a transparent, accountable and competitive mechanism to allocate this finance (also called smart subsidies). Private sector entities who may be interested in supplying broadband Internet service to unserved communities will be invited to submit bids in response to a request for proposal (RFP). The party asking for the least subsidy – either because it has the most efficient technology and business plan or because it is investing more of its own capital – will be declared the winner.

The UASF could fund the following items:

  • Broadband infrastructure, both backbone and access network and the subsequent service provision;
  • Broadband connections for elementary and high schools in collaboration with DepED;
  • Broadband connections for prioritized rural hospitals and health centers in collaboration with the DoH;
  • Broadband connections for existing and newly created CeCs, including a limited time of operational support if required until the CeCs are expected to become financially self-sustaining;
  • COMELEC precincts to stabilize poll automation; and/or > ICT awareness and training campaigns.”

Does this translate to funding from the Government to pay for the needs of Elementary and High Schools or Hospitals?  It doesn’t make sense when these entities are supposedly devolved from the national government.  Take for instance, a hospital under the DOH pays for its own operating expenses.  Part of being independent translates to being able to determine what capital expenditure they will need, and operating expenses, correct?  So their ICT strategy ought to be focused on the local level, correct?

As for the COMELEC, shouldn’t their ICT awareness and training come from their own budget?  As does their poll automation funding?

The PDS line of thinking comes from the fact it doesn’t understand the situation, and the needs of the future.

 

The Philippine Internet situation

What is the situation?  The business sector and consumers in general complain of a lack of broadband infrastructure. This is indicative, among other things of The Global Information Technology Report 2010-2011.

Why is this important?

The significance of broadband to an economy is like the significance of a road, a highway, a railway, a seaport, an airport and power plants.  A nation living in the 21st Century can not do business when its network infrastructure is crappy.

Creative industries that according to recent reports indicate an explosion of 50 percent in the next few years.  And yet the global consumption of media— driven by creativeness— is entirely digital.  Everything from Books to movies to music; from entertainment to serious work is driven entirely by the Internet.  This is why Netflix is growing.  This is why the Bloomberg alternative, StockTwits TV is growing.  This is why there is a whole “television” network called Twit is growing.  This makes possible, Blackberry email that is so well loved in Government and Business and it rely on Research and Motion servers.

Everything hinges on the Internet.  Not just the creation of content, but the availability of the tools to create this content is facilitated by the Internet.  Final Cut Pro X for example is available on the Mac Apps Store and it is several gigabytes of download.  Not only that, Software used to create mobile advertising, write mobile applications are downloaded off the Internet.

 

The South Korean model

The South Korean broadband model seems to be the best in the world.  This is something Filipinos ought to borrow.  What has South Korea done?  Essentially the government invested in providing for the network.  It was a public-private partnership.  It help build the Broadband Infrastructure just as America built their interstate highway.

The government has to first recognize the value of Broadband.  It has to first see that Broadband is an essential component of the economy.  It has to first see that broadband is as important as a highway that connects Manila and Batangas.  It is as important as having Caticlan International Airport make Boracay accessible to tourists.

If the NTC has two billion in funds annually on spectrum fees then it ought to go back into building broadband internet in the Philippines, which actually serves everyone.  It goes without saying that two billion pesos in annual spectrum fees won’t be enough to help setup a real deal broadband network in the Philippines. In fact, South Korea spent over thirty trillion won in building its broadband network. In US Dollars it is approximately 30 billion. In Philippine terms, it is in the neighborhood of over 1.4 trillion pesos. That would upgrade existing South Korean network to 1 Gigabit per second download. South Koreans currently enjoy 100Mbit/s speed.

The Philippine norm is 1MB/s.

Obviously, various stakeholders have to sit together to plan the network; to build the infrastructure and the costs of course would be different from the South Korean.

What reframing public policy into thinking that Broadband is a key economic driver does several things.  First, a true Philippine interconnection could be accomplished between the various service providers.  Second, a plan could now be put in place to have multiple network access from the Philippines, and going to elsewhere.  Third, it can help facilitate building of broadband infrastructure in provincial areas where it might not be economically viable to setup shop.

 

Other key elements missing

Getting the government to reframe its thinking that Broadband is an economic driver is part of the solution to drive a Philippine Digital Strategy.

1. It also needs to look into allegations that Broadband providers enter into exclusive agreements with Local Government Units.  To put it in another way, there must be real, honest to goodness free market happening on the ground.

2. If you want to drive Computer literacy; to make the Internet prevalent then you have to get the digital devices to be really accessible.  Computers, tablets, mobile phones, network infrastructure shouldn’t be taxed too much.

3. The government also needs to clean up the power sector.  Why the power sector?  Well, how else could you drive technology without electricity?  How else could you get businesses to invest in knowledge-based, in creative industries when the electricity these machines run on is expensive?

4. The government also needs to focus on getting content creators in the Philippines.  It shouldn’t stop at the BPO sector because as much as the BPO sector gets people to have jobs, we need to have an environment where animators can survive.  We need to have an environment where scientists and labs could be grown.  We need to have an environment where ebook publishing could thrive, and where music, movies and television programs could readily be purchased.

President Aquino recently dissolved the Commission on Information and Communications Technology.  It is my hope that what the government replaces it with is an agency that is forward thinking, non-political and essentially knows what are the problems, and how to solve them.  It is clear that the Philippine Digital Strategy as it stands today doesn’t understand the needs of tomorrow.  The essential idea of “Internet for all” is great.  The PDS doesn’t have the strategy to make sure that “Internet for all” actually happens.  What it is in a nutshell is a government-centric network.

Yesterday, President Aquino dissolved the Commission on Information and Communications Technology. As of this writing no reason was given, so I shall refrain from saying, great.

What President Aquino ought to do is reframe the Philippine Digital Strategy before the country is set on a path and spend money that would have no impact on the real needs of tomorrow’s Filipino.

Image source: Chris Harrison, Internet Map: World Connection Density.

Reference:

Philippine Digital Strategy 2011 to 2016:

( Philippine Digital Strategy 2011 to 2016 )

( The Global Information Technology Report 2010 to 2011 )

Broadband cap, and Network morality

News that Globe telecom has decided to implement a broadband cap created a small shimmer in the local blogosphere. This latest move shouldn’t shock anyone. For one thing, there is no NTC rule, or legislation that says this is illegal. For another thing, Globe Telecom reported their 2010 earnings that their revenues were down 22.4 percent to PHP 9.75 billion from PHP 12.57 billion in 2009. Implementation of this rule is simply an indicator that times are tough for Globe, and the company borrowed 7 billion from local bank, BDO to pay for its Capital Expenditure.

What irks people is that Globe said in their recent analysis, that the top 5 percent of heavy users take on 80 percent of their system capacity. Of course there is no way to really know this, except this is Globe’s word against anyone else. We don’t even know where the inefficiency in the network is. If this is a hardware problem, or an economic problem with Globe.

Bandwidth as resource
Telecoms argue that Internet is a finite pool. It can be analogous to electricity. Total electricity in the Philippines is N megawatts, because that’s all the plants— limited by physics and fuel can produce. Telcos do not produce bandwidth. Bandwidth is simply the bits that are processed per unit of time. So, if you’re attempting to share files with your officemate, the transfer between those two computers is measured in bandwidth. That’s bandwidth within your office or your home.

When you went to your service provider to get an Internet connection, you signed up for a particular speed. Say, 1MBps. That’s supposedly One megabits per second. So that’s suppose to be a million bits processed per second. That seems a lot right? So you’re living with a roommate and between the two of you, that 1MBps is shared. Typically to share this, the house buys a wireless router. This “WiFi router” is then attached to the modem that your service provider installed so you can connect to their service. So take for example You’re Mr. X and you were watching YouTube on iPad. Ms. Y, your lovely housemate is playing World of Warcraft on her Mac. That 1MBps connection is shared between you and Ms. Y through your WiFi router. It isn’t evenly split ok? The best analogy I suppose in this situation is the rate of water going through yours and Ms. Y’s shower. If both are turned on, the pressure might not be the same as only when one of you is taking a bath at that given moment in time.

But that’s not the whole story. Not all routers are cut from the same cloth. For example, Ms. Y has a movie stored in her Mac. And thanks to the magical technology from Apple you can watch that movie on your iPad. The transfer rate between your iPad and Ms. Y’s Mac has nothing to do with your Service Provider. This is the internal network. This is just you. Now, depending on your Wireless router you may not get fast enough data transfer between that Mac and your iPad. It could be because where you’re watching the movie is a little too far from the range of the wireless router. It could be that the signal has to pass through walls. It could also be because Ms. Y at the same time is playing World of Warcraft and your wireless router can’t process bits fast enough. So it is a combination of physics and capability of the router.

What the telcos on the other hand are saying is that there is a finite pool of internet resources available. What they’re saying for example is that your House, Mr. X is connected to their junction box. Mr. Z., from across the street is connected to the same junction box. So too is Ms. A., who lives three doors down to your right. What they’re saying from their telco server feeding to that junction box is a finite amount of bandwidth. What they’re really saying is that that junction can only process so much. For example Mr. X is playing World of Warcraft. Ms. A is downloading a youtube video while Mr. Z from down the street is downloading porn.

Now from that junction the data passes to the telco servers, and out of the Philippines. This isn’t just one server, but a whole bunch of services. Every time you visit Google.com, that’s you connecting to your service provider’s DNS server. DNS is like the phonebook on your phone. It looks up the name, and dials the IP address then it takes you to Google.com. Telcos also have a service called, “proxy servers.” These servers cache sites like Google, and Yahoo so it will load for you faster, and useful too in blocking sites. For example a company could be using a proxy server to prevent their employees from accessing porn, or Facebook.

So is Bandwidth finite? It can’t be finite because we’re talking about the rate that data is processed. It is the rate that your wireless router can process information. It is the rate the junction or the routers of your Service Provider processes information. It is the rate by which telcos transfer data from their servers out on to the world.

What they’re really trying to say is that their tech can’t handle the data. Is it finite in the sense that maybe all they need is to upgrade their hardware? Which costs money. Which, in every free market in the world means, they have to somehow earn money from it to cover that cost and their operational expenses.

What Service Providers are now trying to condition the marketplace is that they can’t handle unlimited internet. Wouldn’t it be a simple computation of how much computing resources a subscriber could possibly consume? My daily consumption according to my computer is between 1GB to 2GB of network transfer. That’s not accounting for playing MMORPG. So couldn’t a service provider assume that per household they should be allocating at least 5GB a day on their DSL connection? And make assumptions for big businesses as well?

There are no unknowns here. This is engineering and science, and based on their subscribers, telcos can definitely measure how much bandwidth is consumed. They could know how much capital expenditure they should be doing per year to keep up with worldwide bandwidth. We also know that cables going to and from service providers have natural physical limitations. We also know that cell towers broadcasting 3G signals have natural physical limitations. We also know that each router has its own physical limitation, and can process only N amounts of information. So from an engineering standpoint you can determine capacity, so where then does the problem lie why there is crappy internet in the Philippines?

Several weeks back, a few people in my household were complaining of crappy Internet speed. “I can’t connect to Facebook!” Which was odd in that I was on Facebook at the same time they were complaining. Our provider is Globe, and they were pissed off naturally. I sought to figure out why my Mac could connect to Facebook while the other PC (no, it wasn’t the PC’s fault!) So I found out that the PC wasn’t using Google DNS or OpenDNS. DNS is like this phonebook that your computer looks up so that it can contact a website. For some weird and totally insane reason, Globe’s DNS is really lousy. And boom! Just like that they were happy. So what’s up with that?

Where then does the problem lie on why there is crappy Internet in the Philippines?

The state of hardware these telcos have of course is related to the amount of money they want and can invest in. This is a business that telcos are in. Of course they are going to build capacity just right to keep up profits and to keep up with shareholder value. In the case of PLDT they bought Sun so they can grow their subscriber base. In the case of Globe they’re being slaughtered because for one thing, their service is really bad.

Telcos are always taunting, “market forces,” well if there really was competition people could easily switch service, right? Several days ago, I wrote that PLDT buying Sun may not be a bad idea. In a comment, Carlos Nazeno wrote,

“t’s not a bad idea. It’s a horrific idea.

See that “lack of availability of competing services in your area”?

Often, it’s not only cost but also territorial exclusivity agreements with LGUs that prevent other players from entering.

IF PLDT/Digitel pushes through, it’s going to get even worse and since you’ll be stuck with a monopoly, they won’t have incentives to improve service as opposed to if competition is available.

This brought up and discussed during the public consultation on Broadband/Internet with the NTC commissioner and legislators from the House Committee on ICT at MINT College last Feb.19.

NTC Commissioner Gamaliel Cordoba promised reforms that would open up the market and encourage new players to join.

What’s going to happen if this pushes through?”

So, is it true that LGUs are in collusion and hence market forces doesn’t happen?

Morality
Telcos are arguing that the reason why the network is slow is because of the top internet users are consuming content. Telcos are service providers. They are like Meralco, or Maynilad or the toll way operator. We buy access to get to the Internet. What we do with that bandwidth is our business. If Ms. Y wants to use it to browse porn that is her business. Why should telcos care what we do with that access so long as Ms. Y is paying? Meralco doesnt’ complain if you watch Willing Willie all day. Maynilad doesn’t complain when you spill gallons of water, so long as you pay. Maynilad doesn’t care if you use that water to shower with an escort you hired. The police may care that you hired an escort, and your priest may care that you hired an escort, but Maynilad doesn’t, and shouldn’t. It is a simple business arrangement between you and the company to provide a service. There is no morality involve!

As for the allegation that bandwidth is being used to download illegal content. According to a Canadian study, Illegal music, movies, and software is market failure. It is a content licensing issue. Hulu isn’t broadcast outside the United States because of it. Some eBooks aren’t sold by Amazon in a territory because of licensing issues. For the longest time, the Beatles weren’t on iTunes because of licensing issues. It has nothing to do with telcos. People want to watch content when and where they want to watch it. That’s what’s been clear in the 21st century.

Where does the problem lie then?

Telcos and problems
The state of a telco’s network of course is driven by market forces. The fewer subscribers they get, the less money they have. A telco’s terrible service affects its bottom line. Market forces dictate that people will flock to the alternative, the cheaper or the better service. Bandwidth cap is just another sign of how badly a service provider’s service is. Corporations are there to make money. To blame the user for spending too much of that service, which is clearly something that they can figure out through math, is a terrible way to make money. To raise a business issue to a moral one, likewise is throwing blame at things other than where the problem lies.

A consumer of internet service doesn’t care whether or not a telco’s router is overwhelmed. He cares about watching YouTube without buffering. A consumer doesn’t care about the telco’s internal woes. He cares about getting his money’s worth. If 1MBps is the agreement then why shouldn’t he get that 1Mbps? If the signed agreement has a fair use policy, that’s fine, consumers signed on it, but you know, there is something nasty when Service Providers never explain that fine print to their consumers. Yes, it wouldn’t be the first time, of course.

Imposing a bandwidth cap was never the issue. It is imposing that bandwidth cap with such lousy Internet speed and service is the issue. Imposing morality on the network is disingenuous, and blaming customers from using service is one hell of a way to be biting the hand that feeds you. Consumers just want what they agree with the service provider: Internet speed that is reliable, and agreed upon. Aren’t you pissed when you don’t get your money’s worth?

# # #

Official position paper on Broadband Caps by ProPinoy is here.

Globe moves to cap Internet data volume

Without any law to prevent its adoption, Ayala-led telco Globe Telecom has decided to invoke the “fair use” doctrine in imposing a reported data limit on the Internet subscription of its customer as a way to curb unrestrained use of just a few broadband users.

Globe’s move, first reported by the Philippine Daily Inquirer, was contained in a press statement issued by the company over the weekend.

The data volume limit, according to the Inquirer, “would affect only users who download data in excess of 1 gigabyte a day.”

By adopting a “fair use” policy, Globe said it can “promote a more responsible way of using the Internet that will ensure fair and optimum usage of its broadband services across all subscribers.”

In a recent analysis, Globe said only 5 percent use 80 percent of the available broadband network bandwidth, leaving only 20 percent of the capacity to be shared by 95 percent of the remaining users.

Read more at newsbytes.ph

 

Is the Internet a value added service?

The NTC believes, and continues to believe that broadband is a value added service. Value added service is another speak for, “add on.” NTC believes that this isn’t the telco’s main business, but their side business.

In the face of an age where the Internet is slowly creeping to be everywhere, this seem to be an archaic position. More and more people are using data more than they are using SMS. Granted much of the population are still on older phones, and much of the population is still using SMS and phone, the industry is in a period of transition much like the move from landlines to mobile phones themselves.


Telcos are using mobile internet as alternative in areas where they have reached capacity on DSL connections. And consumers are readily switching to these mobile broadband connections because work can not be done without Internet. It is a fact of the 21st Century. Email is routed everywhere. Webservices, information on social networks, and even Youtube have serious aspects.

What’s also clear is that Broadband is not a national strategy. This is a mistake in the face of severe lapses in education, in science, and in business infrastructure. Where once a nation is judged by businesses on the state of their roads, and phone lines, businesses today look at how great a country’s Internet connection is.

The recent 2011 Sendai Earthquake is proof of the vulnerability of the Philippines in a regional disaster. Internet services in some parts of the country, went down. It also proved the weaknesses in telco Internet exchange interconnection, as sites hosted locally were the hardest hit. They were the hardest hit because for some providers, they send traffic outside the philippines, before coming back to view sites hosted locally.

While it shouldn’t be government policy to run the telco business, it is government policy to dictate the basic rules of the game, and to enforce those rules. How can the government enforce, much less dictate using terms and policies from the age of dial-up? The NTC is surely behind the times.

What is pretty clear in the face of global change, in the face of how much the Internet is instrumental in every part of people’s lives, and continues to grow, the Internet access must be considered as a right. At the same time, Internet infrastructure must maintain its core ethos: that no one group controls it and any law or policy must respect network neutrality.

It seems pretty clear that going forward, the Philippines must adapt an Internet policy that respects network neutrality; that sees the Internet as a right, and at the same time, be cognizant that the business of Internet infrastructure must be open to as many players as possible, and it must ensure that the government itself must not have physical control over the infrastructure. Internet is no longer a value added service, but the business itself. The faster the government recognizes this, and the importance of Internet in a long term national strategy, the better it is for people.

Update: Reader Rob Sanchez also noted that the big telcos’ business isn’t value added anymore.

New public consultation for Minimum broadband speed (Baguio)

NOTICE OF REGIONAL PUBLIC CONSULTATION

 

The NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) is inviting all affected and interested parties to the regional Public Consultation on the proposed Memorandum Order on

MINIMUM SPEED OF BROADBAND CONNECTION to be held on 18 March 2011, Friday, at 2:00 P.M. at the NTC Regional Office BaguioCity.

Copies of the proposed Order can be obtained from the Office of the Common Carrier Authorization Department, 2nd Floor, NTC Bldg. or downloaded from the NTC websitewww.ntc.gov.ph.

GAMALIEL A. CORDOBA

Commissioner

 

Context: “A Better Draft memorandum order on Minimum Speed of Broadband Connections” by The Jester-in-Exile also On NTC, Internet speed, Broadband Capping

 

source NTC via The Jester-in-Exile