Bandwidth caps explained, NTC endorsed

A recent draft memorandum by the NTC indicates some sort of service level agreement where ISPs are required to provide a minimum guaranteed speed on subscriptions as well as allow for daily bandwidth capping on subscribers.

The circular requires ISPs to deliver a minimum average of 80% of the subscribed plan for regular broadband/dial-up lines and 99% for leased lines.

The NTC defines this accordingly:

… service reliability is measured over a period of one month and is derived by dividing the number of hours used in a day into the difference between hours used in a day and hours used below minimum connection speed in a day.

On the other hand, the NTC also endorsed recommendations by ISPs to put a daily cap on bandwidth usage. This clarifies the bandwidth caps already being imposed by telcos which we reported earlier.

While many would look at the “bandwidth caps” and cry foul, I’d look at the other provision that requires a minimum guaranteed speed based on the subscribed speed. This means if you subscribe to a 1Mbps plan, your average internet speed over a period of 1 month should not be under 800Kbps. If that’s the case, I’d gladly agree to be capped at 25GB per month (see Globe’s Broadband Internet bandwidth caps here).

I recently talked to a network engineer who’s a supplier of one of the telcos mentioned above and he explained how they arrived on the bandwidth caps imposed by the carriers.

What they do is they look at network traffic and determine how much bandwidth is used on a monthly basis. It turns out that over 99% of the users consume less than 1.5GB of bandwidth on their mobile phones.

The less than 1% who exceed are very few and inconsistent — meaning, they don’t consistently exceed 1.5GB on a month to month basis. Btw, this 1.5GB cap of Smart is for mobile 3G internet only.

In order to avoid regular users from being affected by the heavy users, the heavy users (those who exceed the 1.5GB cap) are isolated and transferred to a different network segment or bucket. The allocation for that small group in the segment is then limited. Hence, only the heavy users will be competing for the limited bandwidth in their bucket while all the regular users remain on the regular, uncongested network.

The rationale behind this policy has been studied and compared with other carriers in other countries worldwide. Of course, there are other factors that come into play.

I personally own several servers and re-sell bandwidth so I have a lot of experiences with system abuses. It’s the same reason why Cabalen imposes a double-the-price penalty to diners who put more food on their plate than they can finish. Same goes with Mang Inasal’s unlimited rice — just go try and ask for 100 cups of rice in one go. Or why the MMDA imposes number coding and restricts which car you can drive on a given day.

Apparently, in the Philippines, regular consumers don’t fully understand the “bucket system” so telcos resorted to time-based servicing. Remember that standard mobile internet used to be priced on a per KB basis back in the days? That did not work out well (the bucket system) so they shifted to the time-based billing system.

However, the time-based system is very prone to abuse (a problem which don’t exist if they imposed the bucket system). The throttling and capping of bandwidth to supplement time-based services allows the service providers to regulate the network and separate the heavy users from the regular users.

I don’t like the idea of putting caps but I’m okay with it as long as it’s a reasonable one. Just give me that 1Mbps speed I actually subscribed to. I hope this draft memorandum gets pushed thru so we can all get that 80% minimum guarantee on subscribed internet speeds.

Addendum: I think the issue here is the use of the word “unlimited” in the subscription plans when in fact it’s actually just a modified form of “bucket plans”. What if the NTC orders all the telcos to shift to “bucket plans” and sell internet connection on a pay per use basis? Say if you consume 15GB a month, you only pay Php500 but if you use 50GB in a month, your bill goes up accordingly (say Php1,500). I think that would have been a more straight-forward approach. Never mind if most of the consumers could not quantify what a gigabyte is. At least it’s not false advertising.

We’re not really that alien to caps. Even the MMDA has capped how many days you can drive your car in a week. We seem to be okay with that since everyone is experiencing how congested EDSA is.