Is the NTC proposed Broadband cap, a good deal or not?

I have written my arguments against the proposed NTC memorandum order, “Minimum speed of Broadband connections,” calling for service providers to conduct broadband capping. One is in an open letter to both the president and congress.  One on Blog Watch, and a brief commentary after the NTC mentioned that they are capping to prevent illegal downloading of content.  What the NTC memorandum order means in a nutshell, Broadband providers can set a limit to the amount that you are downloading.  The memorandum order also does not guarantee that broadband providers deliver the right speed or close enough speed to their advertised speed plan.  In fact, it describes it as, “best effort.”

Lady Programmer wrote a piece on why she thinks Capping is a bad idea.

GameOPS wrote, “The National Telecommunications Commission (NTC) continues its anti-consumer stand by allowing Internet Service Providers to specify the minimum broadband connection speed, service reliability and rates.”

Some of my friends have been complaining about capping like on Wi-Tribe. Another friend has been complaining about her SkyCable Internet, which has deteriorated overtime.

There is a petition online saying no to the broadband cap, and yes to better Internet.

There are many sides to an issue.  YugaTech agrees with capping.  Pinoy PC Perspective also says, yes to capping.  Both say that it is good for consumers because now, people won’t be hogging all the bandwidth.

@Solidad of PinoyPC Perspective replied to a comment I left on his site:

“When there’s technology there comes cost. If the ISPs can find ways on optimizing their existing infrastructure, they will do it. If your a Boss of a company, you would weigh greatly on the cost of new equipment. If the current equipment can still do its job with a few alterations, then, that a more cost effective solution.”

The problem is they really don’t.  It’s a nice thing to think that they do, and in a perfect world that’s what they ought to be doing in the first place, but they’re not.   Case in point— about 10 years ago, in a company I used to work for, we had this slight problem with bandwidth.  We were consuming so much of it, the company in one of the conversations with our CTO told us, we knocked out one of their routers.  The company had to update the router they use in our area just to keep up.

What we have here is the same deal with the Telcos back in the days when cellphones and texting were new.  Remember those days? Everyone complained that texts didn’t make it or that it came late.  We’ve been so used to it that every christmas and new years, we’ve been sending text a bit early just to avoid network congestion.  The same thing is happening now, only writ large and every day.  There is network congestion because ISPs aren’t updating their networks, or aren’t updating them fast enough.

Bocchi pointed this out in his research paper.

The fact is, corporations aren’t reinvesting enough because it isn’t in their interest to.  They’re making money on the status quo.

Could they make more money if they reinvested more heavily or is this a case of the market can’t handle it because there is limited money?  Is the market simply not moving fast enough because no one dares to do it?  That there is no critical mass because people are not actually investing big enough to get that critical mass?  Is it simply that when all is said and done, the economics just don’t play out?

Solidad describes what normally happens in any business.  They only build exactly without room for growth.  It never works out.  It is the difference between Apple and PC for example.  It almost never is the best bang for your buck.  That making do with stuff instead of reinvesting?   Sometimes you miss out on opportunities and innovation.  It never, ever works out.  We are at that point of the technology curve that people are demanding more, but ISPs either can’t afford to, or can’t do it fast enough.

If a business was doing its homework, it would know how the proper projection of its incoming business.  They would know how much new business they can drum up, and determine how big the demand is, and create the service.

Solidad added:

“Yes. But you don’t stream HD content on a wireless network. It hogs everybody down. 100GB for family use will suffice if ISP imposes the cap on wired services. If you want to watch HD, go wired. If you can’t, stick to SD. We’ll get to the point where 4G technologies can make this possible; for now, we have to optimize our network. Make sacrifices as said.”

We live in a country, where cellphones took off and landlines didn’t.  Everyone has already determined that cellular services is the future.  4G is already available but the real question is: CapEx.  how fast can ISPs really reinvest on capital expenditures.  Are they making money?  It would seem so.  They’re still in business. Are they getting the appropriate return for shareholder value, it would seem so.

WiMAX has been tested uncap to deliver 8MBps in the Philippines.  And boy, Globe’s delivering a fraction of that speed.  Like 1MBps (not even 2MBps), and 512KBps (as if we’re in the stone age).

On NTC Broadband cap draft memorandum order, I quoted, HubPages who reviewed Globe WiMax saying, “For heavy users of VOIP, via Yahoo messenger, skype, vonnage or Magic Jack – you guys are in for a treat. For the younger generation of P2P fanatics – this is not recommended. For regular browsing – this is acceptable. For our streaming video experience – we have had better experience with PLDT. For users of Digitel, anything other than their service is a welcome treat.”

Don’t even bother asking Wi-Tribe about their service.

I can understand say, in specific areas, they can offer the faster speed— once they’ve “optimized” their service.  But really, it isn’t good enough.  The technology is there— it really is a question of economics.

What’s the hold up?

Caps really don’t answer the fundamental question: why is Internet so terrible in the Philippines?

Everyone is saying so.  It isn’t just anecdotal stories told by friends in a cafe somewhere.

The Global Information Technology Report ranked the Philippines 85 out of 133 countries in Network readiness.  We’re ranked right beside Serbia (84). Vietnam is ranked 54.

Studies like Broadband and the economy as well as Building broadband: strategies and policies for the developing world, are good and important reads.

Capping does not get our telecoms to provide a reasonably fast service.  To think that the telcoms will do so, is to think naive.  The NTC reasoning on capping to prevent illegal use of broadband is utter hogwash, which I replied to here.  In a nutshell: there are far better ways to get people to stop stealing content.  This is one of those times where in a Free Market the rules of the game has got to be sorted out.   In a free market there are two players: the corporations and the rest of us.  The government is suppose to act as referee to ensure everyone plays fair.  This is one of those times.  The NTC memorandum is a huge mistake.

Is the NTC proposed Broadband cap, a good deal or not?

No it isn’t.  It isn’t at all.

“Moving,” by XKCD, some rights reserved.

Cocoy Dayao

Cocoy is the Chief Technology Officer of Lab Rats Technica, a Digital Consulting company that specialises in DevOps, iOS, and Web Apps, E-Commerce sites, Cybersecurity and Social Media consulting. He is a technology enthusiast, political junkie and social observer who enjoys a good cup of coffee, comic books, and tweets as @cocoy on twitter.

Cocoy is also the Managing Director and Editor-in-Chief of the ProPinoy Project.

Cocoy considers himself to be Liberal.

  • Anonymous

    This is a minor item (or maybe it is a major item) but banditry plus this Utrecht-dude’s extortion-for-a-noble-cause (with copycats among baranggay captains and local mayors) are two reasons why Pilipinas network infrastructure is low.

  • Anonymous

    This is a minor item (or maybe it is a major item) but banditry plus this Utrecht-dude’s extortion-for-a-noble-cause (with copycats among baranggay captains and local mayors) are two reasons why Pilipinas network infrastructure is low.

  • Joe America

    It’s a bad deal, and much of what you write suggests that commerce in the Philippines likes to sleep with regulators, and there is no overriding vision of what the communications networks in the Philippines ought to be. The regulators feel that they can make the users be the guilty party in the abuse, rather than their own policies. Rather like making bus drivers the guilty party for the traffic mayhem in Manila. The road planners, or keeping Manila as 10 cities instead of one, or failing to have traffic enforcers out in armies . . . no responsibility at all. It is all the fault of those negligent bus drivers.

    I’ve ridden many a bus in the Philippines. Some of the drivers are indeed cowboys, riding fast and wild, but they perhaps have the best skills of all. What will a competency exam prove when driving is a frame of mind, not muscle . . .

  • Joe America

    It’s a bad deal, and much of what you write suggests that commerce in the Philippines likes to sleep with regulators, and there is no overriding vision of what the communications networks in the Philippines ought to be. The regulators feel that they can make the users be the guilty party in the abuse, rather than their own policies. Rather like making bus drivers the guilty party for the traffic mayhem in Manila. The road planners, or keeping Manila as 10 cities instead of one, or failing to have traffic enforcers out in armies . . . no responsibility at all. It is all the fault of those negligent bus drivers.

    I’ve ridden many a bus in the Philippines. Some of the drivers are indeed cowboys, riding fast and wild, but they perhaps have the best skills of all. What will a competency exam prove when driving is a frame of mind, not muscle . . .