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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.

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Avatar for Abe Olandres

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

216 Responses

  1. Avatar for Abe Olandres Abe Olandres says:

    @Mark – not really. maybe you’d get a rebate or don’t pay at all.

  2. Avatar for Benben Benben says:

    youl probably consume another 500mb for your *upload*

  3. Avatar for Mark Mark says:

    Does that mean if I get bandwidth below 80% my subscribed speed I could sue them? Hmmm… interesting… hehehehehe

  4. Avatar for Benben Benben says:

    @yuga

    oh that was quick. if thats the case, it means no torrent/p2p. Because these applications eat both downstream and upstream bandwidth..
    Say you download 700mb movie.. youl probably consume another 500mb for your download (assuming you stop seeding soon after you finished your download)

    So thats 1.2G per movie?

    sad.

  5. Avatar for zeeguy zeeguy says:

    Take a look at this webpage for Globe’s Supersurf: http://site.globe.com.ph/prepaid_services/super_surf?sid=TRvl0suxpRcAAAptqA4AAABCe

    It clearly says UNLIMITED surfing, without any reference whatsoever to any capping. No link to their fair user policy.

    With regards to the guaranteed speeds, doesn’t faster speeds mean you’d just reach the cap faster?

  6. Avatar for Robin Robin says:

    “to use an LRT analogy. Long lines and crowded trains.

    Correct solution : get more coaches and establish more lines

    solution after bribing the gov’t : bawal sumakay ng more than twice a day”

    Apparently everybody in the country is subsidizing LRT use, whether they use it or not. Getting more coaches means having to subsidize it more.

    The correct solution is to charge the correct rate.

  7. Avatar for Abe Olandres Abe Olandres says:

    @benben – didn’t completely read the fine print in the DSL contract but my guess is that it’s cumulative of downstream and upstream bandwidth.

  8. Avatar for Benben Benben says:

    @yuga

    It is still not clear.

    “1.5GB cap is for mobile 3G internet on your mobile phone. For residential DSL lines, the cap is between 15GB to 35GB ”

    will this only include downstream? what about your upload? Remember internet is not one way communication? Have they considered this on their “calculation” for capping? Because Ive read somewhere that cap limit is download + upload consumption.

  9. Avatar for Richard Benedict Richard Benedict says:

    We are the talking about capping and consumption of our ISP’s, but how high can you get for a Month.

    Here’s I have a almost 20GB limit per month on my PLDT DSL

    http://i53.tinypic.com/zmfnup.jpg

  10. Avatar for Robin Robin says:

    I am okay with the caps, especially if they actually deliver on the minimum guaranteed speed. For heavy users, they should just have plans with higher caps.

  11. Avatar for link link says:

    ABSOLUTELY NO TO CAPPING!!!
    Paano na
    yung mga gamers,
    nakikinig ng online radio,
    video watchers.
    VOIP,
    Information hungry individuals…..
    This is STUPIDITY!
    Hindi tayo mag-evolve nyan! Paurong tayo hindi pasulong…
    Somebody save us!

  12. Avatar for lolipown lolipown says:

    @Naru
    problem is, even with caps, there’s no guarantee service will improve. Telcos are prone to overselling lines.

  13. Avatar for vince vince says:

    to use an LRT analogy. Long lines and crowded trains.

    Correct solution : get more coaches and establish more lines

    solution after bribing the gov’t : bawal sumakay ng more than twice a day

  14. Avatar for vince vince says:

    I predict speeds will not increase, mabagal pa rin.
    worst of both worlds. first world caps with 3rd world speeds. All will be capped, but if you complain that the speed is slow “sir we will forward this to our technical section, please call back in one month”

    this is just like gasoline prices. When prices go up, they go up instantly. When they go down, there are a lot of T.R.O’s, delaying tactics, excuses and pa installment pa ang baba.

    how will the cap solve slow speed due to congestion if at the start of the month, everyone is not capped yet and can download?

  15. Avatar for Mr.A Mr.A says:

    I’m not opposed to the draft. What is important is that NTC or the ISP can provide a tool for us to monitor our bandwidth, serve as a reference over our usage. That way, they can’t reason us out if we go over our limit.

    This draft memo is beneficial to consumers who don’t stress the bandwidth of network, and further give them options to have a much cheaper plans because of it. If we can provide cheaper plans, like 500 for 10GB/month at 1Mb/s is quite a feat. In the end, it doesn’t prevent freedom of information, it makes it more accessible to many.

    What should be done is to have a bucket and Unlimited plan. Offer the bucket for casual users at cheaper price and offer the Unlimited plan for premium for heavy users. Business plan are exempted on this or should be given 100GB or more cap. Corporate plans and lease lines are, of course, exempted.

    I think were going to where Canada is right now. I think residential wired DSL should have a minimum cap of 100GB per month, not 30GB. But then again, that’s just me and my vast collection of HD anime. But in the end of the day, everybody will receive fast and reliable internet. I’m good with that.

  16. Avatar for Abiel Abiel says:

    I’d be happy to see if telcos will implement a pay per use basis, yeah.. it’s better if there is a plan that you will only pay for the connection that you used. Since “Unlimited” is not really unlimited!!!

  17. Avatar for Bri Bri says:

    Patay na! pati si Smart naki join na sa CAPPING scheme. lagot na kawawa naman pinas hindi pa nga nakakatikim ng more than 10 Mbps yung mga average users capped na agad. Ahahayz

  18. Avatar for neil neil says:

    unlimited internet with bandwidth caps???!!!

    WHERE IS THE LOGIC IN THAT???
    unlimited is unlimited and capping your access is limiting your usage of the network…

    remember ninu ang promo nila na P5 for 15 minutes, P25 for 3days… eh diba time based browsing ang gamit nila ngaun, mabagal pa rin eh…

    i think this bucket system is only applicable to PLDT since they have actual lines and cables to isolate and transfer… ang mga PLDT subscribers ang dapat maging aware sa bandwidth capping issue na ito…

    sa cellphone??? ano ang i-iisolate nila??? ang isang area na marami ang gumagamitng kanilang 3g???

    kaya pala mabagal ang 3g brokeband ko…

  19. Avatar for Jon Jon says:

    CApping. Hmm. There is more to this. First, these ISPs should be VERY transparent with their FUPs, capping etc. Also, there must be an accurate or reliable way for users to track their bandwidth consumption. Also, the term “unlimited” should not be used as well.

    In a worst case scenario, ISPs could cap or throttle all they want, but what about the quality of service they provide? I mean, I am sure everyone here has experienced not getting the speed they are paying for, right? And what happens when we don’t get it? Report it to their CSRs? Sadly, mostly nothing happens when we complain to these ISPs. Consumer rights??

  20. Avatar for Paul Paul says:

    @Everyone throwing a racket about the telcos using the term ‘UNLIMITED’ to describe their bandwidth plans:

    I checked their promotions and websites tonight, and I found out that only PLDT and Smart do that. Globe, Bayantel and Sky do not.

    Smart does not even use the word ‘unlimited’ to describe the bandwidth, but rather the amount of time you can use the internet in their unlimited plan.

    So it all comes down to PLDT, and they use ‘unlimited’ on pretty much all their plans.

    http://www.myworldmydsl.com/plan.aspx

    On another note, I tried that PLDT Watchpad thing and installed it on my MBP (they have a beta for Mac now, hooray). Guess what, it regularly went past the speed limit of my subscribed plan. I suppose this means PLDT isn’t running out of bandwidth to necessitate capping anytime soon.

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