When you sell “unlimited” data plans and put speed limits on them, there’s something seriously wrong.
The Philippines’ Justice department told mobile operators this in an
advisory today, warning them of penalties for throttling supposedly
unlimited data plans when subscribers use the internet too much.
The practice of throttling or reducing internet speeds makes it
difficult to perform tasks like navigating using GPS or watching a
Such practice under the Fair Use Policy (FUP) of telcos Smart Communications and Globe Telecom violates the consumer law, which bars misleading advertisements, Justice Secretary Leila de Lima said in a nine-page advisory.
“What is promised must be delivered,” de Lima was quoted in a GMA News report
as saying. “Our laws require not only truth in advertising, but also
fairness in packaging and consistency in the provision of the service.”
De Lima called on regulators to punish “deceptive” telcos. Sanctions
include fines as high as PHP10,000 (US$225) or imprisonment for up to a
year, or both.
Tech in Asia asked the telcos for comments, but has yet to receive their response.
The speed caps have been a hot issue this year due to the deluge of
complaints from subscribers. Globe and Smart subscribers are allowed
between one and 1.5 gigabits of data consumption per day, and anything
beyond these thresholds will trigger the downgrade to 2G.
But telcos seem confident there’s no legal issue. “It was always
there in the contract they signed with us – that FUP will apply,” Globe
CEO and president Ernest Cu was quoted as saying in another GMA News report, which came out early this year. This means customers might have not read the fine print.
Years back, there was no such thing as speed caps. They weren’t
necessary because not so many people had access to the internet. That’s
all changed, with more smartphones coming out and sold at affordable
rates. The speed caps help telcos keep up with traffic and ease
congestion on their networks.