Of data capping, competition and consumer rights

Exactly two years to the month after I wrote about the “end of unlimited data plans”
in the Philippines, we are back to talking about telcos’ fair use
policy (FUP) on data usage and how it, in effect, nullifies the point of
consumers for subscribing to “unli.”

After the deregulation of
the nation's telecom sector in the early ‘90s, one would think that the
primary roles of the regulator would be to promoting competition and
protect consumer rights. In all fairness, the National
Telecommunications Commission (NTC) does try, with its limited resources
and all. But its stance seems vague and actions weak on checking and
ensuring quality of internet service.

The NTC does not prohibit
data capping. Telcos are allowed to implement their respective FUPs
purportedly to protect their subscribers against the less than 5% who
hog 80% of the bandwidth.

But over the past week, with the
complaints over data capping getting aggravated by issues on spam SMS
and slow internet connection, the issue reached yet another tipping
point. After some media attention, the regulator had to react, somehow.

This
is an all too familiar scenario that is happening all too often. How
many times do we have to see this cycle of constant complaints and media
attention before the government steps in and does something to address
the problem, for good?

Internet in the Philippines is slow and
expensive. And consumers get cut off or are given slower connections
once they’ve reached a usage cap.

Globe Telecom’s FUP puts a
threshold of 1GB per day or 3GB per month, while Smart allows for a
1.5GB per day, both for mobile browsing but depending on the data plan.

In
principle, imposing a data cap makes sense. When you have a finite
amount of bandwidth and a growing pool of subscribers, it is logical to
put a usage cap so that all consumers would be able to get the same
service. Also, data capping is a “global industry practice” of telcos
anywhere in the world, one ISP said in a statement.

But in
reality, subscribers buy into unlimited data plans because of what they
need, not because of what they think the ISPs could actually offer
(because they ought to offer service as advertised, right?) or what the
next consumer is not allowed to use.

According to Globe, “media
streaming and downloading of torrents are considered... excessive use.”
So that means goodbye YouTube, Pandora, and other similar online
activities that, to me, are common fare at this day and age. Smart’s
FUP, on the other hand, is meant to regulate customers “whose improper
or abusive use of mobile browsing may jeopardize our ability to deliver
the best customer experience to other subscribers.”

But how does
an operator discriminate the abusive data hoggers from the typical
consumer? It does not. Once the predetermined data usage threshold is
reached, the consumer is informed by the ISP and his connection is
shifted to 2G browsing speed regardless of reason for reaching the cap.

For Winthrop Yu of the Internet Society – Philippines Chapter (ISOC.PH),
the very low usage caps are an indication of over-subscription. And this
so-called industry practice is making it “nearly impossible for
Filipinos to take advantage of online education (e.g. Coursera, Udacity,
and even the University of the Philippines’ Open University) without
getting hit with a throttling cap. The data usage caps are, therefore,
anti-education and throttle human capital development.”

Globe, having received a lot of flak lately, posted an infographic
to explain how their FUP is in fact, well, fair. Globe users were quick
to react, with a few pointing out that 3GB per month is useless and
that they did not sign up for a “limited” data plan. One suggested that
it was time to switch to Smart.

Not to be outdone, Smart users
complaining about the FUP set up their own Facebook page. Funnily, one
complainant said, “Globe subscribers still got it good.”

Ahh, the beauty of competition!

Democracy.Net.PH,
a group of citizens who led the drafting of the first crowd-sourced
legislative bill on the “Magna Carta for Philippine Internet Freedom”
recently issued a brief on data capping,
complete with a survey of data capping policies of the country’s ISPs.
The group outlined the perils of data capping, and how it is detrimental
to competition and consumers’ rights.

In the spirit of calling a spade a spade, let’s label a service for what it really offers. Maybe
the ISPs should consider renaming unlimited data to “conditional limited
data.” Because calling it unlimited sounds like a marketing scheme
designed to make consumers hungry, and pay to get all that tasty-looking
chicken in the buffet. But the consumers don’t get a refill until after
some time, because the kitchen ran out of chicken in the freezer. And
the cook is not telling.

 | Telecom Asia