PLDT Bandwidth Cap: Why It Makes Sense

This article is a repost of what I wrote a few months back, after rumor spread that ISPs in our country are implementing speed capping. Speed capping is different from bandwidth capping (the one approved by ITC) in a sense that instead of limiting the total amount of data you can get from the internet, ISPs will limit the maximum speed that you get it. While this is happening already in a sense because your ISP package has speed limits, speed capping also applies for selected services, like torrenting and video streaming. But I digress. Speed capping is NOT implemented as far as I know, but in the near future, bandwidth capping might. And even if clients do get pissed off about it, PLDT/Globe/Bayantel still has a lot to gain even at the cost of losing clients. (hint: This is for those angerfags who say "I'll just switch to the other ISP! You'll see!)

People of course are saying it's a bad business call, and barring any moral transgressions/indignations it may have, is it really a bad business call?

On a pure business sense, I think it's sensible.


See, ISP connections to other countries aren't like the ISP connections that we have at home. They're not exactly unlimited, and the business model of giving people unlimited internet connection is based on the idea that people will never be able to utilize their internet connections's actual worth when translated to the per byte fee ISPs have to pay for some of the outgoing connections (due to some arrangements with other ISPs in other countries)

Network equipment, of course need to be constantly upgraded for as long as bandwidth peaks rise, since most equipment can only handle a certain amount of bandwidth before they gain sentience, look for a pistol, and shoot themselves. Upgrading costs more than a shiny penny, that I know.



Above is the traffic internet percentage trend from 1996 to 2006 and as you can see now, it's speculated that more than 60% of the total bandwidth consumption online is because of peer-to-peer. It's said that somebody who uses torrent consumes the BW load of at least 20 normal users (even those fags who use youtube whose videos average 40mb per video)

That also means maintaining the account of a single torrentfag who downloads at least 1 gigabyte worth of data every other daycosts at least 20 times as much as a normal users who contents himself in sending email, and answering facebook quizzes with only occasional downloads.

Suppose one in every five ISP user is a torrent user and after the cap, he leaves for another ISP. That means the total average consumption will go from 24 average users to just four average users and still maintain payments for four users. That means the profit margin actually will rise if the torrent users leave for other ISPs.

The decrease in cost is so great compared to the decrease in earnings, I wont be surprised if all ISPs start pushing hard for this capping even though most of the users will rant to hell and back.

Bottomline is, if losing 20% of your customer base causes your costs to fall 95% for the total population, it's practically a goldmine strategy.

Of course, this move is a huge step back for people just beginning to exploit the potential of the internet in the only way third world countries can. As for myself, I'd stay neutral until I see where this leads.

In any case it'll be a most interesting case.

p.s. (Most interesting will be the wails of dramafag torrent junkies who'll pull no punches in making the most ridiculous of justifications despite the bottomline that majority of torrenting/p2p is really just related to pirating shit off the net. Don't be hypocritical, you know what I'm talking about.)