The Philippine Online Chronicles

“Ugh, huh,” I heard my boss, the CTO muttered. When he hanged up, he turned to me and said, “That was our ISP.” He paused and continued, “They said the reason why we’ve lost Internet, apparently we consumed too much bandwidth that we took out their router.”

It was a facepalm moment.

The boss got up and strode to our big boss’ office to break the news. It was our third ISP in the year.  ISPs couldn't handle the strain of our little office.

The story is loosely based on real events, circa 2000/2001. Our connection back then was a 512MB line, which was shared in our 10 person office.  And yes, we really did take out a router that bad.

Fast forward to the end of 2010, and 69 percent of the population still use Internet cafes to get their Facebook fix. They play LAN games. They chat with their loved ones abroad. They create user generated content daily.

The case of terrible Internet has also propagated.

The NTC recently announced a draft memorandum order called, “Minimum Speed of Broadband Connections,” and calling for a cap on Internet usage.

If you go to any ISP they will tell you frankly that the speed N MBPs is theoretical and not guaranteed. It is the fastest they can offer, but if you listen closely none of them will tell you today, they can achieve it. ISPs are actually honest about it. We, users have lived by it for years. It is the only expectation we have.

The latest Memorandum Order is nothing new, expect for part five that allows “service providers to set the maximum volume of data allowed per subscriber/user per day.”

This is called a broadband cap.

A broadband cap means that if you subscribe to a 1MBps plan, you’re not supposed to get a speed lower than 800KBps, but your ISP is free to slow down your speed or cut you off if your Internet use exceeds 25GB per month.

Broadband Caps are nothing new. In fact, countries like the United States, Australia, New Zealand and South America are some of the more famous countries known for their bandwidth capping. The United States in particular, broadband caps are norm.

So is Internet very good in America?

Walt Mossberg of the Wall Street Journal wrote a review of iPhone 4. It was a great review, but did you know what he said was the downside? It wasn’t the phone, the downside, Mossberg said was the AT&T network that iPhone was exclusive in.  it wasn't very good.

In Great Britain, bandwidth capping is an issue too like this op-ed piece from the Register on “ISPs against BBC iPlayer.”

The best country in the world for Internet connection is South Korea. So much so that their biggest ISP is working to keep people from Internet addiction.

YugaTech agrees with the NTC and the telcos on Bandwidth capping.

GameOps blog disagrees. GameOps wrote, “The National Telecommunications Commission (NTC) continues its anti-consumer stand by allowing Internet Service Providers to specify the minimum broadband connection speed, service reliability and rates.”

Some of Twitter people are saying:

@JonDoblados: “@aileenapolo Sure is not. Especially when these ISPs are already delivering less than what subscribers signed up for.”

@aileenapolo: “@JonDoblados definitely going backward when all other countries are moving forward. Haaaay naku, buhay nga naman.

What do I think?

I say this is utterly wrong. And I have written an open letter to President Aquino, and to the 15th Congress to review our telecommunications law, and to determine a National Cyber Strategy.

I find the concept of Bandwidth caps to be regressive.

Let me tell you why.

I will start with a little work and a little entertainment. Recently, I was able to obtain a free copy to beta test DC Universe Online. The beta key was given to me by DC Comics. To participate, I had to download 12GB of the game. Every few weeks the DC Universe Online Team would update the game. Less than a month later, another 8GB download to patch the game.

That’s just downloading content, and not playing the game. You can imagine how much bandwidth I consume to just field test it. That’s not the point, you can imagine how much time and electricity was wasted keeping the computer on just to finish downloading the game.

I do this for both work (hence the Lintech column about The virtual world of DC Universe Online), and play.

You can imagine how much bandwidth I consume.

I’m not your atypical Filipino Internet user, and in fact, I’m the odd man out.

According to Yahoo-Nielsen Net Index 2010, 69 percent of Internet users in the Philippines actually use Internet cafes. What do people use Internet cafes for? They play games. They video chat with their relatives abroad. They chat. They Facebook.

To update one of the local games in those Internet shops like say, Rohan, or Special Forces, is several MBs to a few GBs of data. Regular patching occurs. The same scenario occurs: you spend a lot of time downloading because of the slow speed, and should the NTC have its way, you get to have a cap on bandwidth speed that is already crappy.

Is it an issue of technology then?

On 11 December 2009, YugaTech announced that Globe WiMax tops at 8Mbps uncapped. Globe offers its subscribers today, a maximum 1MBps on WiMax at PHP995 per month.

Ergo, it isn’t a question of technology.

HubPages reviewed Globe WiMax and said, “For heavy users of VOIP, via Yahoo messenger, skype, vonnage or Magic Jack – you guys are in for a treat. For the younger generation of P2P fanatics – this is not recommended. For regular browsing – this is acceptable. For our streaming video experience – we have had better experience with PLDT. For users of Digitel, anything other than their service is a welcome treat.”

There have been several reviews of ISPs over the years. @momblogger published one two years ago. If you read her review today, and compare it with local ISPs, little has changed.

The Organization for Economic Cooperation and Development (OECD) published a paper called, “Broadband and the Economy.” The paper was derived from a ministerial meeting of countries on the future of the Internet economy. The meeting was hosted by the Korean Communications Commission in 2008.

What did OECD conclude?

OECD determined that Broadband is an enabling technology. Internet creates a huge impact on productivity, but the largest productivity gain comes from its use, rather than the production of ICTs. Simply put, using the Internet helps improve productivity in a country.

The World Bank published in January 2010 a paper called, “building broadband: strategies and policies for the developing world.” The paper described Broadband as an ecosystem. It said that for low to medium income countries, that for every 10 percent point increase in broadband penetration, it accelerated economic growth by 1.38 percent points. The same paper also noted a study by McKinsey and Company, who said that a 10 percent increase in broadband household penetration resulted in a boost to a country’s GDP between 0.1 percent to 1.4 percent.

The paper gave a suggestion. For countries to maximize this, it must be visionary, but flexible to change given market conditions. That countries must use competition to promote market growth, and that lastly, it must facilitate demand.

Earlier in 2010, Jacqui Cheng of the well respected publication, Ars Technica wrote, “Cellular networks is a key to getting developing world online.” She pointed out that the future for developing countries is mobile.

It isn’t a farfetched idea especially in the Philippines where cellular networks are king.

So, ok, we have studies pointing out that Broadband is good. We have the NTC and the telcos saying they want to limit Internet use. Alessandro Magnoli Bocchi wrote a very interesting paper called, “Rising Growth, Declining Investment: The Puzzle of the Philippines.” He said, local industries are not reinvesting enough because they make enough money within the status quo, and therefore are reluctant to invest.

That’s what’s happening with Internet in the Philippines.

How do you balance the need for shareholder interest, and the interest of the local consumer?

Users are complaining they can’t use Internet simply because of lousy service by Telcos. The NTC’s answer is to issue caps. The NTC could have ruled that ALL Internet connections should be no slower than 2MBps. Finland for example has given this right to all their users.  In my humble opinion, it isn't to America that we must look to for inspiration regarding our Internet strategy, but to South Korean which has the best broadband network in the world.

To put a cap on Internet use doesn’t get telecoms to reinvest back. The experience in America, and elsewhere prove they won't. They will fight tooth and nail because they must protect shareholder value. There is nothing wrong with protecting shareholder value, but there is something wrong when we only aim for the most mediocre customer level. It is the NTC's job to ensure that both the interest of the consumer and the corporations are balanced out. The NTC draft memorandum encourage mediocre corporate innovation, damages telco brand reputation and is in fact encouraging anti-consumer sentiment. The NTC is suppose to level the playing field, but it does not. The draft memorandum order doesn’t’ solve the problem of bad internet in the Philippines. Broadband caps doesn’t help the Internet experience, and we have only to look into the experience of the United States, Australia, New Zealand and others to see how our telecoms would react.

Internet is something one can not live without in the 21st century. It is a part of modern life the same way, Power, Water and even Banking is.  In fact, recently a group of businessmen sent the President a paper urging the government to focus on our Creative Industry.  The network is an essential infrastructure. NTC’s move is regressive.  It does not improve our Global Network Readiness standing (which is behind Vietnam).  We are ranked 85 out of 133 countries in the 2010 Global Technology Report.

The government needs to review the telecom law, and the NTC. It needs to come up with a better, long term National Cyber Strategy one that is holistic, and looks at the various issues on the table, not just this issue of broadand cap and bandwidth, but also the issue of the Freedom to Connect, of cybercrime, and cyberwar.  More importantly to see it not out of fear, but with our eyes open, cognizant of the future.

A few others are leading the charge against broadband capping. There is an online petition being circulated led by @rom, @momblogger and @tonyocruz for a #betterinternet in the Philippines. I urge you to sign it.  Inform your friends about it.  Tell the President your position about broadband cap.  Inform your Senators and Congressmen what you think of it.

Photo credit: Originally from the English Wikipedia; description page is/was here.