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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 vince vince says:

    isipin ninyo, kung super capped/mahal ang kuryente during the 1950’s noong nag dedevelop pa lang ang bansa, sure ball na madaming mga technological inventions ay di magiging sikat kasi masyado malakas sa kuryente like refrigerator, washing machine, electric iron, microwave, etc etc.

    going back further, noong “capped” ang kotse kasi mahal and kakaunti ang ginagawa, ang kotse treated as toy ng mayaman. Noong dumating ang “uncapped” model T (cheap and madaming supply) pati mga middle class nagkaroon ng kotse and alam nyo kung gaano ka importante ang kotse (kasama jeepney and bus) sa buhay ngayon, hindi na laruan kundi isang necessity

    same thing sa internet. Madaming mga services like VOIP, tele-surgery, tele-teaching, video on demand, youtube, digital downloads, etc ay di na lalago

    in English, suppressing innovation due to limited supply

  2. Avatar for tarbis tarbis says:

    Stupidest comparison I’ve ever read. Iniisip siguro nila na ginagamit lng nakakarami ang net para sa FB. Ang tanga talaga kahit kelan tanga pa ren kahit new year na. -_-

  3. Avatar for Say no to CAP Say no to CAP says:

    Hindi tamang icompare ang internet usage sa unlimited rice ng mang inasal kasi maraming pagkakaiba, una walang taong oorder ng 100 rice, at obviously hindi naman sasapat yun para sa isang pirasong inihaw.

    Nakakahiya naman na umorder ng ganoong karaming kanin. Hindi naman kayang kainin ng isang tao ang 100 cup of rice.

  4. Avatar for Girard Andrew Girard Andrew says:

    hmmmm… remember unlimited SMS before?

    same is happening here… these ISPs are just looking for ways to squeeze money from us now that people are using more internet and less SMS…

    situation before was… people were making less calls and more SMS.

  5. Avatar for batang pinoy batang pinoy says:

    grabe talaga ang kasibaan ng mga telcos dito sa ‘pinas!!!
    nagta-trabaho yung mga tao ng matino, kumikita sila ng matino, nagbabayad sila ng matino tapos ganon lang ang serbisyo ng mga telcos…nakakahiya naman talaga, mga bulok na telcos!

    tignan lang natin kung madadala ng mga telcos na yan yung mga pera nila kapag namatay sila…mga wala silang konsensya, hindi sila marunong magbalik ng “utang na loob” sa mga customer nila na nagbabayad ng matino.

    kinikita namin yung pera namin ng matino para lang maipambayad lang sa serbisyo nyo tapos bulok lang yung ibibigay nyo sa amin?

    ano ba yang mga telcos na yan?
    negosyante o manggagantso?

    2011 na, hindi pa rin nagbabago yung serbisyo (perwisyo) nyo!!!

    mas masahol pa kayo sa mga kriminal dito sa ‘pinas!

  6. Avatar for kups kups says:

    bulok talaga telco at govt sa pinas. ang bagal ng service pati ba naman internet. kaya lumisan na kami sa pinas at sa singapore na lang kami. dto ang internet unlimited & ang minimum bandwidth 8mbps. yung iba naka 1gig pa.

  7. Avatar for Manix Manix says:

    unfortunately, one has to accept the fact that its a 3rd world country infrastracture setting

  8. Avatar for vince vince says:

    http://www.facebook.com/pages/No-To-Broadband-Data-Capping/14065090*****32?v=wall

    please LIKE this facebook no to capping page.

  9. Avatar for lolipown lolipown says:

    @cruz tupaz
    hah nailed it. This is the reason why old people in office should die out really soon. Harsh yes but we need lawmakers who understand technology better than those simply clamoring it’s for your own good.

    Seriously, how can you claim it’s for the people’s good if you have no idea how things work.

  10. Avatar for Vance Vance says:

    Masgusto ko unlimited, selfish na kung selfish, at least i don;t need to count how many gigs i use.. lalo nakung magkakaron ng tivo like service here, imagine mo nalang kung 13 shows pinapanood mo.. tapos high def.. ave 700 mb each, within a month over the cap kana kung 25Gb lang plan mo..

  11. Avatar for Kenneth Kenneth says:

    One more classic case of abuse by telcos, smart in particular.

    If you register for unli surf wether its one day or multiple days. If you browse facebook, you will get slapped an automatic deduction/charge of 20pesos for unlifacebook20. even if you did not register for it, coz you shouldn’t have to having registered/activated unlimited surfing. Double jeopardy for consumers, not so good service na nga you get charged double/extra pa …

    Haayyyy sana NTC thinks doubly hard about their recent ruling in the area of SLAs.

  12. Avatar for kyflo kyflo says:

    Kung totoo ang sinasabi ng mga telcos na ito, ibalik nila ang paggamit ng “PANA : TRUTH IN ADVERTISING” sa mga ads nila para kahit papaano ay magiging kampante ang mga consumers. I know it is not enough. Sa mga TV ads kasi ng mga telcos na ito, sadyang binibilisan ang speed para mapabilib ang mga magsu-subscribe na kumuha ng plan.

    For me kaya nag-exist ang mga on-demand services na IWantTV ng Bayan Comm. at Watchpad ng PLDT para makatipid sila sa pag-uupgrade ng infrastructures. Kumbaga an internet plan with a speed of 384Kbps which is priced at Php 990 is cheaper than the paid price, padagdag ang mga services na ito para gawing TRIPLE-PLAY service.

  13. Avatar for kyflo kyflo says:

    What Cruz Tupaz is saying is correct.
    It may be akin to censorship..

    For me, the other reason of broadband capping is for internet censorship in the Philippines. This can be the first stage then other plans until this reaches the internet blackout. If NTC approves the MO, this will be the stage where Internet connection prices will be like the ones in Myanmar. The Philippines is a DEMOCRATIC COUNTRY, not a Communist country or a country on Military Junta.

    I hope that the people of NTC will be replaced by better and competent people who protects the rights of consumers and they are not in the favor of telcos or broadcasting companies.

  14. Avatar for Razer Razer says:

    The word “abuse” can be abused by the telcos. What I see here are great opportunities for telcos to earn more by using the great “abuse” excuse by consumers.

    How about the “abuse” of the telcos? I always see the adverts of Globe Tattoo’s unlimited SUPERSURF and they use the word “bottomles.” Isn’t that false advertisement?

    Is the NTC or any government regulatory board doing any action about these? Why doesn’t Globe announce that the otherwise unlimited Internet service is really limited to 800mb?

  15. Avatar for cruz tupaz cruz tupaz says:

    reasonable capping? who decides what’s reasonable?

    the telcos are not investing into infrastructure and facilities to upgrade our Internet connections to the levels being enjoyed by our Korean, Singaporean, and Japanese neighbors.

    as long as their service is poor and unreliable, they have no right to cap our use of the Internet. it is akin to censorship.

    the NTC is supposed to protect the citizens, not to play to the telco’s whims.

  16. Avatar for frack frack says:

    @fragglerocker
    it is true that they lack in resources but do you guys know that our country doesn’t really have this so called DSL or Broadband? all telecos are connected to PLDT :) the main source.. And do you also know that PNOY wanted to have it here in our country but these politicians hinder not to because of the previous issue of ZTE deal. I have 2mbps connection here in province and i’m getting 60-70% of bandwidth. the tsr explained that the original bandwidth given is on that range. Most probably i’m getting like 215kbps (static) dl rate on torrents. MBps and mbps is total different and are misleading too. Since i saw it mbps not MBps, i dont complain anymore cause I understand the difference xD

  17. Avatar for uberover uberover says:

    @fragglerocker
    that’s true. some of the areas here in the philippines still experience “dial-up speeds” on their broadband. telcos advertisements are way too misleading to those unfortunate broadband users who only get dial-up speeds.

    shame to those telcos who do not strive in helping those poor areas. all they want is earning big money while spending less. how shameful…

  18. Avatar for fragglerocker fragglerocker says:

    TRUTH in ADVERTISING, yon lang sana, heavy user or not, pinapacommit nila yong subscriber sa kanila (1-2 years) at least naman maging honest sila sa serbisyo nila at kung pwede yong fine print wag masyadong fine na di mo na halos mabasa.

    @frack: we are whining because we still get dial up experience kahit na ka-DSL subscribe ka na

  19. Avatar for frack frack says:

    i mean Globe is practicing bandwidth distribution… (not telecos, i dont know how things work on other teleco)

  20. Avatar for frack frack says:

    it seemed that telecos here were practicing bandwidth distribution like what other telecos in other countries are doing except that they keep the price affordable as possible. Well, in Europe, they are not allowed to do P2P anymore and torrents. Everytime they download huge files, there’s a limit based on bucket system and they will pay extra if they reached their max. So consumers are afraid to do downloads because of it. My question is… what are you guys whinning?!!! LOL

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