On Airtel and Tata Indicom’s Fair Usage Policy – Tragedy of the Commons?
We covered TRAI’s recommendation on introducing regulations to ensure that ISPs provide internet connections based on the capacity of traffic they can carry (i.e. contention ratio).
As per TRAI’s new regulation, telecom operators offering Internet services should not accommodate over 50 users per unit of Internet bandwidth in case of home users and 30 users per unit for business users.
The underlying theory is that telecom operators offering Internet services should not accommodate over 50 users per unit of Internet bandwidth in case of home users and 30 users per unit for business users.
Airtel and Tata Indicom’s Fair Usage Policy
Both Airtel and Tata Indicom have come up with ‘Fair Usage Guide’ wherein they have defined ‘fair usage’ and the repercussion of using unfairly.
Airtel
Under the policy we have defined fair usage levels for unlimited data transfer plans and needless to mention, the usage levels set are very generous such that most customers will not be affected by the Fair Usage Policy.
On reaching the fair usage level, the plan speed would be rationalized by up to 50% for the rest of the monthly billing cycle. You would also be redirected to a page which will inform you that the speeds for the rest of the billing cycle month would be as per the Airtel’s Fair Usage Policy. – source (pdf)
Tata Indicom
Data transfer in excess of Fair Usage Limit as per the applicable tariff plan shall be treated as a violation of TCISL FUP.
Upon such violation of FUP, TCISL shall contact the Customer suggesting for reduction in usage or upgrade to a higher bandwidth plan.
Despite the above, if the customer fails to upgrade to a high speed plan or continue to violate the TCISL FUP, TCISL reserves the right to suspend or terminate the customer’s account immediately without prejudice to other rights available to TCISL under these Terms and Conditions. – source
Do you blame operators for this? Well, I don’t. Here is why:
I have a Sify unlimited plan which sucks badly – the speed is damn slow. Sify’s reaction to this is quite obvious – there are too many active subs in your region and hence the detoriated performance.
Like 99% of users, I too would like to have the ‘promised’ Internet speed (the one that I am paying for). And TRAI’s new guidelines helps in setting that.
But what about those who crash out their ‘unlimited’ plan within few days? Well, given that they are power users (and are probably downloading whole lot of movies/songs), I believe Tragedy of the Commons example from game theory helps here.
Tragedy of the Commons : illustrates the argument that free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation. This occurs because the benefits of exploitation accrue to individuals or groups, each of whom is motivated to maximize use of the resource to the point in which they become reliant on it, while the costs of the exploitation are borne by all those to whom the resource is available (which may be a wider class of individuals than those who are exploiting it).
Before one starts criticizing operators/ISPs for the ‘unfair’ policy, one needs to understand that bringing a cap to subscriber number per means a direct hit in their revenue and if they need to maintain QoS (quality of service), they also need to ensure that subscribers too maintain the quality of usage (otherwise QoS for other subs suffers).
I agree that imposing contention ratio doesn’t help solve 100% of the problem – but it surely is first step in the right direction. What ISPs need to also ensure is that broadband users are being educated on the usage and repercussions of over-usage – and most importantly, quantifying what is fair-usage (how many MBs of download etc etc).
And no, this has nothing to do with net neutrality – it’s a completely different issue wherein ISPs tend to give preferential treatment to few sites over others, which is ofcourse completely against the democratic nature of Internet.
What’s your opinion?
-
Related posts:
- Tata Indicom gets into mobile-education
- SaaS gets another boost – Tata to distribute HyperOffice Collab Tools
- Telecom Roundup: ZTE enters Indian Telecom Market, Airtel partners with SKS Microfinance..and more
- Telecom Roundup: DoT’s Number Portability Plans, Separate 3G Policy for CDMA Players..and more
- Nokia Launches Cheapest(?) 3G Phone, Partners with Airtel for Free Internet
About the author - Ashish Sinha is a Startup Mentor/Product Strategy Coach, and the founder/chief editor of pluGGd.in.
He has launched/managed couple of products (consumer as well as enterprise) in US and India, and now consults with startups/small businesses on their product/media strategy. He can be reached at: ashish (at) pluGGd.in [+91 98452 06443]
Completely agree. The problem is this ‘fair use policy’ has been unleashed on unsuspecting customers who were used to ‘truly’ unlimited plans with no notice whatsoever. When I chose a INR 999 per month plan, I opted to pay more per month for the promise of a ‘truly’ unlimited plan so that I do not have to,
- think twice before leaving my computer on, all night
- keep looking at a download meter if I’ve exceeded my threshold
- worry if I should be downloading anything over 1GB
and so on.
These are some of the reasons why I chose an ‘unlimited’ plan against a ‘pay as you use’ plan. Now, if that ‘unlimited’ plan suddenly has some caveats, I sure would like to know about them in advance so I can decide whether I want to continue paying so high for such a plan.
Also, after the threshold comes into effect, while I continue to pay INR 999 per month, my speed is reduced to 256 kbps. Shouldn’t I be charged according to that speed too, actually?
Its not about net neutrality, I agree. Its about being sensitive to your customers, particularly those who chose to pay you more than all the other segments of customers. This could be a small group, but the fact that they opted for a higher priced plan denotes that their usage is indeed going to be higher.
On the other hand, the letter introducing the speed rationalization was signed by the marketing head of Airtel. Isn’t that strange? Speed rationalization is a service related issue/ update – not sales/ marketing related.
Plus, if I pay more, as per speed on demand, their newly launched product which was the main motive of that letter, can I just continue with the same higher speed? So, pay money and there’s no cut in speed. That sounds a bit like extortion to me.
There’s more – if you see the AFUP petition online, there are more reasons why this plan is arbitrary and insults the intelligence of customers. http://afup.broadbandforum.in/
Finally, I have my analogy explained here!
http://itwofs.com/beastoftraal/2009/03/03/airtels-fair-usage-speed-rationalization-explained/
I completely agree with you – I’d say lets wait for few more days. I am hoping that Airtel and other guys do not screw up each and everybody – there will be few users who will suffer..the current FUP is an instant reaction to TRAI’s recommendation.
The hyperbole is well-deserved here but here it goes
First they came for torrent users
I remained silent;
I was not a torrenter.
When they locked up the video users,
I remained silent;
I was not into videos.
When they came for the VPN users,
I did not speak out;
I was not a VPN user.
When they came for the music enthusiasts,
I remained silent;
I was not a streaming audio user.
When they came for us e-mail users,
there was no one left to speak out.
Ashish, when you think its about them and not us you are missing the point.
Good one..see I am not saying I am all for what ISPs are doing. But what I am trying to say is that ISPs need to take consumer in confidence before coming up with FUP policy. And that also involves some amount of education.
Even if you look at ‘unlimited hosting’ – it comes with several hooks. I am not justifying that. But think if you are the operator, and you need to maintain QoS – how would you do that??
Change how you model resource usage on your “unlimited hosting” plan to reflect real-world usage, so that you can charge a reasonable price for it? As opposed to offering unlimited plans that assume unrealistically low usage.
Well, in that case it shouldn’t be called “Unlimited Plan” and there should be a truly “Unlimited Plan” possibly with appropriate costs(2-3x more than the existing rates) to differentiate users who can exceed the fair use limits. Any plan advertised as “Unlimited” but having “fair use” caveats is hypocrisy, “unfair” and kind of typical corporate bullying and the “reduced speed” is somehow supposed to cover up for it !! Now, I didn’t pay for the “reduced speeds”. Did I?
I agree that this is totally unrelated to net neutrality issue.
I would suggest you first read up the Tragedy of the Commons in detail, including its nuances before arriving at your present conclusion.
ToC cannot be applied in this case for any number of reasons, I’ll list two here – because users aren’t over-exploiting resources(they’ve paid for unlimited usage, so are well within their rights) and because bandwidth isn’t a public/free resource leading to over-exploitation(instead they’re sold by private enterprises).
Guess you should learn the practical aspects of game theory.
Ashish – if you’ve cited a theory where it was not applicable, best to admit that and move on, instead of trying to somehow justify it by saying “there are practical aspects”.
But I’ll humour you – pray tell me, what are these “practical aspects” related to the tragedy of the commons that’s applicable here?
Rohin – Looks like you are a newbie MBA. If you take game theory as-is, you can never find a practical aspect in the real world.
Here is how tragedy of commons is applicable (let me explain on ashish’s behalf) –
The moment you and 100 others buy unlimited plan, you are ready to exploit the resource. it becomes unlimited for you.
If one guy starts downloading movies/torrents, doesnt hurt others. 10 guys do it and the resource is exploited and becomes not-so-useful for others who don’t exploit it.
“This occurs because the benefits of exploitation accrue to individuals or groups, each of whom is motivated to maximize use of the resource to the point in which they become reliant on it, while the costs of the exploitation are borne by all those to whom the resource is available (which may be a wider class of individuals than those who are exploiting it).”
- Clear or still want to reach out to your text-book?
I have 2 simple solutions. Don’t know how many of you agree to it:
User A: Requires min. downloading but good speeds
User B: Require heavy downloading, speed does not matter much.
So ISP’s must seggregate users in the above format and charge accordingly.
if User A browse internet without too much downloading, he should go for limited plans with high speed. (Ex. BSNL 1 GB for Rs. 250, speed upto 2 MBPS)
If user B, needs unlimited downloading, let him have it (Ex. BSNL U/L Home for Rs. 750, max. speed 256 kbps)
In second case, there should not be a need for FUP as you are already giving him lower speeds and he is well aware of that!
FUP in my opinion is one sided and favours those who do limited downloading which allows these mean ISPs to have more no. of users with limited resources.
The focus must be on increasing resources. Allow foreign players if possible and improve India’s 115th ranking.
@Rajat,
it becomes unlimited for you.
And it still won’t be unlimited for me because of the data transfer speed cap. So there is a known limit that comes with every unlimited plan.
Also, the moment I and 100 others buy an “unlimited” plan, we pay substantially higher prices than regular prices, so the ISP can acquire more resources to meet the demand. Can’t it?
@Vinuth – the irony is that unlimited always had data cap (unofficially though!).
If you are on Sify, you will know the reality.
How do you explain the current slow connection that I pay for (in the name of unlimited plan?)??
I really fail to understand why so much of hue/cry – when I know that I am currrently overpaying for the current speed (that I get, which is not even near 128 Kbps) and with the new regulation, things hopefully will improve.
Ok calling Internet a finite resource with a defined contention is a illogical at best and malicious at worst
. Mythbusting the assumptions of the ISP ecosystem in India with regard to current F/AUP changes
Sure the regulator is more culpable than ISPs here. ISPs as free market players are responding to the system of incentives/disincentives provided by the regulator.
Tarun – guess you are grossly mistaken here. Internet (or let me say bandwidth) is a finite resource – otherwise why in the world would you hear stories of infrastructure crumbling in the next few days.
http://www.pluggd.in/indian-startups/doomsday-for-internet-where-are-the-ipv4-addresses-1945/
http://tarundua.net/fucked/indian/isp/ecosystem
Ashish, your comment area doesn’t seem to have a different color for URLs.
That’s a very good post, Tarun. Thanks.
Rajat.
1. IP addresses not equal to Internet Bandwidth and they aren’t going to be over tomorrow either thanks to RFC 1918.
2. World over stories of Infrastructure crumbling( rather going to crumble ) is what is called FUD. Blogs like Gigaom are doing a good job of educating non-technical people about the in-correctness of the picture being presented. So relax there is no apocalypse for worldwide infrastructure tomorrow or day after.
3. Developed world situation Internet Infrastructure ‘crumbling’ can’t even be compared to Indian situation where majority of users are actually on slow dialup like speeds on their mobile phones. Please do read what I have written about bandwidth available on backhaul networks and even local loop.
-Tarun
You mean to say Bandwidth is an infinite resource? Then why are operators fighting for it?
That IPV4 link was just an example – you can call them FUD (if you like), but internet bandwidth is being screwed and all big cos. know about it (probably they dont read gigaom).
I am not saying everything will be screwed up – but I do agree with the fact that ppl who are paying for unlimited should get a ‘decent’ connectivity ( I am on BSNL..and its slow for my unlimited plan).
Why everybody wants to think of the power userbase? How about first serving the ‘normal’/average userbase?
“You mean to say Bandwidth is an infinite resource? Then why are operators fighting for it?
”
The ISPs are screwing us because they can get away with it in an imperfect and distorted marketplace with a lot of in-efficiencies and price discrimination built into it thanks to an incompetent regulator. A regulator which hasn’t been able to seed a price competitive marketplace for ISPs in all these years.
“Why everybody wants to think of the power userbase? How about first serving the ‘normal’/average userbase?”
Because without power users there would be no content to serve the ‘normal’/average userbase. Internet is what people do on Internet. If there were only average/normal users trying to check their e-mail on Internet once a week then Internet would be hardly the useful driver of economic of growth it is today in the US and other developed countries.
I can understand the unlimited plans becoming more expensive but putting limits on an “unlimited” plan is plainly and simply misleading the consumers. The plan is not “unlimited” anymore.
I fail to understand this… they are only offering till 2 Mbps for unlimited currently and they are behaving as if hell is breaking loose due to “power users”… all for 2 mbps… and 256kbps is not even broadband.. are these ISPs really ready for the future?
I think the concept of “over-usage”, especially on an unlimited plan, is a throwback to our socialist, government-knows-best past. There is no “ideal” level of usage of the Net (or things like Youtube or online games would never have happened). Let every user decide for themselves what level of usage is right for them and charge them accordingly.
That would mean no unlimited plans – all plans come with download caps (since it’s not possible to really put a price on “unlimited” usage); and SLAs that force refunds or other penalties for ISPs if up/down speeds are less than promised for a specified amount of time (so that ISPs are forced to model usage of their network appropriately). The most important thing, though, is no retroactive provisions. If you have a plan, both you and the ISP will abide by those conditions for its duration. When the contract is up for renewal, any conditions are fair game.
Of course, this assume a competitive ISP market, which may not always be the case. Even if the customer has a few different providers (who are not acting as a cartel, and it’s TRAI’s job to ensure that they don’t), though, these rules should work.
Well, Indian companies who owns Flag Telecom OR Tyco Global can’t be out of bandwidth until they really want to. They are supplying it to rest of the world
In India you pay approximately same for a 256Kbps (so called) unlimited connection to what US/Europe pays for 4Mbps connection. And They call India is much cheaper in all respect.
Why to impose a limitation when customer has to sacrifice the speed for allowed download. You can get him a 2Mbps connection with 150MB limit for Rs 125 but still he shells out 1000 Rs for 256 Kbps so that he don’t have to worry about running over the usage limit. Wait, and you will soon see a new costlier unlimited Plan for 256 Kbps with no limitation whatsoever.
In fact, if a download limit is imposed, for God sake don’t call it Unlimited Plan anymore or else it will same as a Lifetime Prepaid connection which has life of only few months. (I am still to understand whose life these people talk about?)
When I read about TRAI recommendation, my immediate thought was that they have effectively capped ISP’s income by the bandwidth they have from their uplink.
The limits defined for TATA look quite fair to me; and I agree with you on Sify’s unlimited connection being rather slow. Specially at 10 PM it takes a huge dip and stars crawling, I wonder if that’s the reason they have a special plan thats 50% costiler but promises to double your speed in night.
I think the tragedy of the commons analogy is grossly misused here. Simply put, when someone offers you an “unlimited” connection, there is no ambiguity – they are meant to provide you with “as much as you can use” internet (the only limit being the speed of your choice).
If you are committing to provide 10 users with 256kbps unlimited internet, then you better have a bandwidth of 10 x 256 = 2560kbps. Otherwise, you are committing a fraud upon your customers, and not providing them with the service you legally bound yourself to give them.
Seriously, if Airtel / Tata / Reliance are honestly having issues of scarcity of bandwidth (I seriously doubt that), then they should just discontinue unlimited plans.
The tragedy isn’t of the commons – it’s of our technological future.
Qn to all you who seem to oppose operator’s fair usage –
Where were/are you guys when I get a f**ked up speed on my unlimited broadband? I have tried Sify/BSNL..and I am too frustrated with my ’so-called-unlimited’ name-sake connection.
Dont you think that sticking to contention ratio will improve (hopefully) the experience.
Another illogical conclusion – if your speed on your unlimited broadband connection was inadequate, who should you blame? Other consumers who are merely using what they are paying for? Or the Service Provider who isn’t giving you what THEY promised you?
Seriously, your hate is misdirected. Don’t hate other people for using a resource they are paying for in full. Hate your ISP for making false promises to you, and not delivering to you what you are paying for.
I agree with one of the comments above. Let’s just stop calling an internet plan ‘unlimited’ if it comes with a Fair Usage caveat. I understand why the ISP’s would want to pull such a stunt, but this simple misuse of terminology is tantamount to consumer deception. I smell a lawsuit or two waiting to happen if some able bodies feel like it.
rtse7szut fiuiyf
kiy
olfyip
fyl
flof
uolfu
pitul
tg;f
jhdt
I got a call yest from these sick ppl at tata that they i have exceeded my download limit. I was like wtf!!!.Because what is the use in calling it unlimited plan when they are download limits imposed on that plan.And this 45 GB limit which i have been given is upload + download limit.Also they are implementing policies like disconnecting users or terminating their account if they exceed the download limit.It seems to me like i am living in a dictatorship rather than democratic form of government.But any ways if there was a government in India this type of blackmail by corporate bigwigs of the common people wouldn’t have taken place.And this policy is nothing but saving of money by these isp’s as they to buy more bandwidth for the power users.Also ratan tata on one hand speaks of corporate governance and blackmails his customers on other hand waah!!! what a hypocrite he is.I think we should all disconnect our internet connections from these blood sucking TATA’s and Airtels and switch to BSNL and show them that it is the people who have the power and not some capitalist zealots.
1. How can different download & upload( lower from 764/256kbps support VoIP, chat service which has web cams on both ends? It’s theoretically & practically viable.
2. why is it that existing consumer being forced to follow such an upgrade, who do not want it?
3. How is then viable to do trouble-shooting via RAS?
4. Is the policy ” take it, or leave it” type your policy, I do agree being mentioned under the “Terms & Condition”, therefore the policy, then why is this information not written in the “Terms & Conditions” and let the customer know exactly that the consequence could be like described above.
I always respected TATA for their over-all quality of products and service’s offered are such. If so I would request you to kindly include this statement prominently in all services offered by TATA, OTHERWISE under present law of land is clearly clarified by the judiciary clauses.
S. Chatterjee
Sorry for the typographical error ……Sudeep Chatterjee