Data cap, broadband cap, or bandwidth cap is applied by a service provider to limit data consumed by users, or to impose limitation on competition. Read more
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.
“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.
The National Telecommunications Commission in Region XI held a public consultation on Broadband Internet, specifically on the Minimum Speed of Broadband Connections. Present durning the event were Ria Jose of Alleba Politics.
According to Ria Jose, the NTC revealed that it have the equipment to monitor broadband connections, but the commission will be utilizing statistical modeling since it can not monitor 24/7.
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?
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?
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.
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
Context: “A Better Draft memorandum order on Minimum Speed of Broadband Connections” by The Jester-in-Exile also On NTC, Internet speed, Broadband Capping
‘Netizens’ or internet citizens temporarily put aside their gizmos Saturday as they flocked the first-ever public consultation aiming to gear up fight for better internet in the country.
In partnership with Rep. Sigfrido Tinga of the House Committee on Information and Communications Technology and other lawmakers, Kabataan Partylist Rep. Raymond ‘Mong’ Palatino took part in organizing the event to “gather as much input from the people, especially internet users, so we’ll be informed on how legislation may help in mending internet service in the country.”
Palatino said that the issue of internet service has become pertinent in this age of information technology and that the quality of internet in the country affects some 30 million Filipino internet-users.
BusinessMirror published, “Broadband providers to offer new packages,”
“Data provided by the Philippine Chamber of Telecommunications Operators (PCTO) has it that about 5 percent to 7 percent hog the 80 percent of the available bandwidth, leaving only 20 percent of the capacity to be shared by 93 percent to 95 percent of the users.
Smart Communications Inc., for instance, has started campaigning on how to choose the best Internet package available nowadays. Besides this, executives said last week it will introduce a whole new set of packages to suit varying needs of users.
“We will change the way how people use the Internet now, and the key to that is to customize the right package or plan that’s best for them, because people have different needs,” said Smart head for broadband services Gio Bacareza.
In its campaign, Smart said that higher Internet speeds won’t always mean a better Web experience. The upper limit supported by any service provider, Smart said, could be anywhere upward of 56 kbps, with a range reaching up to more than 15 Mbps in some cases, depending on the type of connection used. In practice, however, the claimed speed or bandwidth is not always reliably available to the customer.
“Wired 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.”
The big question now is how these kind of billing changes will impact ‘Net consumption patterns. Many subscribers use minimal data, but that’s changing as Internet video becomes the norm. If these new plans simply discourage data hogs from backing up their 120GB pirated movie collection over the ‘Net every night, there’s no sleep to be lost. But if they scare consumers away from legitimate non-ISP affiliated movie and content sharing sites, that should be a firebell concern to consumers, entrepreneurs, and regulators.
And not only in Canada.
Exactly. When will these people learn, the Problem with Content is Content Licensing, not the the Network.
Ladies and Gentlemen,
A tweetup has been called for February 4, 2011 to discuss the Broadband situation in the Philippines. It will be at Figaro’s, along Emerald Avenue, Ortigas Center.
Everyone is encouraged to come! Signup here.