When the House of Representatives approved House Bill No. 87 last December, it seemed consumers had won. The proposed Roll Over Internet Data Act sought to respond to public frustration over expiring data balances and ensure that unused data allocations go over.
I understand the frustration. I share it. But I still can't support the formatted HB87. The bill has unintended consequences, and those consequences are likely to hit hardest the very users it claims to protect – prepaid users who only reload when allowed to withdraw cash.
HB 87 requires all Internet service providers to allow customers to carry over unused data from a daily, weekly, or monthly package. They will not expire but will be added to the next subscription period. And any accumulated unused data can be converted into a rebate at the end of the year.
Today, in postpaid plans, the carryover is only for one month, as a plan feature and not as a mandatory obligation. And there is no accumulation, and no conversion into rebates, until the end of the year. For prepaid customers, unused data does not carry over beyond the subscription period, unless the service is for no-expiry data.
If Congress mandates accruals and rebates, it would force providers to recognize a continuing obligation to their customers beyond a calendar year. They will then need to create systems to track, verify, and enforce value later. This will involve costs that will resurface in the form of higher prices or smaller data allocations.
For prepaid and postpaid users who purchase data promo offers, the bill is required to roll over the unused data allocation, but only if the customer renews right after the end of the promo. If the customer fails to renew, the unused allocation declines by 20% per day until renewal. If the subscription is not renewed after five days, unused data expires under a statutory forfeiture schedule.
Under current practice, prepaid promos usually expire, and unused allocations usually void upon expiration, unless the product is explicitly designed to have no-expiry data. Some providers already sell packages marketed for data that remains valid until completely consumed.
Existing regulation already protects prepaid consumer value through load validity for one year rather than mandatory rollover of promo data. Regulators have not required that every promo allocation be rolled over, and they have not forced postpaid plans to carry unused data indefinitely.
In practice, most carryover you see today is a product feature the provider chooses to offer. This is not mandatory. The current structure protects the option. Prepaid consumers can choose timed promos when they want lower prices and higher volume for a shorter period, or they can pay for flexibility through longer validity or no-expiry offers. Postpaid users can choose plans that include carryover within a defined window.
The market provides choice because regulation does not force all offers to fall into a single framework. HB 87 aims to change that. This will transform rollover from an optional feature to a universal entitlement for both prepaid and postpaid users, subject to conditions. And this is where Congress and I part ways. As a postpaid and prepaid customer, I find the current structure workable.
Telecom companies sell capacity and access to the network. The data looks like a promo gym membership. You pay for access within a set period. If you only go twice a month, the gym doesn't refund money for the rest of the month. The gym sets membership prices on the assumption that not everyone will come every day.
In telecom, providers price promos with similar assumptions. Some users consume each unit. Many people don't do this. Average utilization often drops below 100%. Expiry and validity periods act as limitations that make cheap, timed promos viable. They also help providers manage peak loads and reduce the risk of incurring long-term obligations.
I fear that HB 87 provides a mandatory product architecture that will ultimately raise prices for everyone. This will motivate providers towards accumulation, rollover and rebate conversion. This will push usage upwards and extend the period during which the provider will have to bear liability for unused allocation.
In short, the bill treats unused data as stored value that must be carried forward and, in some cases, later converted into usable rebates for future payments. This change will have economic consequences. Providers will have to make provisions for those liabilities, which will result in higher operating costs.
Providers will also try to better manage the risks by simplifying offers, tightening rules and avoiding creative promos that invite complaints. Over time, price adjustments will introduce new costs and risks. Thus we should expect higher priced promos, smaller allocations, fewer promo variants, and more restrictive usage controls.
I'm sure many consumers would not welcome such an outcome, especially those who survive on small weekly reloads. Additionally, low-income prepaid users often miss the immediate renewal window due to cash crunch. They pull promos and reload only when they have cash. HB 87 punishes that behavior with a 20% debasement per day and a tougher cutoff after five days. While the bill claims to protect the public, its mechanisms penalize the poor.
HB 87 is still awaiting Senate action before becoming law. This gives MPs time to improve their approach. If the goal is consumer protection, regulators can achieve much of this without imposing a single design on every plan. They should remove the 20% per diem cut as it punishes those who deserve it the least.
If lawmakers insist on mandating rollovers, perhaps it would be better to set a predictable limit. Allow a defined carryover window tied to the promo period if renewal occurs before expiration. Or set the maximum accumulated balance or maximum carryover period. In short, make it predictable, not open-ended.
One option is to maintain the current practice of rolling over postpaid data to the next month and implement it across all plans. The accumulation is time bound, without conversion. And let the customer choose a plan from which he can avail maximum benefits. Same monthly rollover may apply for pre-paid.
In short, give some scope to telecom companies. Competition should promote product diversity. Regulation should have clarity and fairness, not dictate the mechanics of every promo. Mandating rollovers and year-end rebates runs the risk of turning a premium feature into a universal obligation, then pretending it costs nothing.
Data that doesn't expire has a higher price. That's why rollover data is a premium feature. If we take a convenience that is now only enjoyed by those who are willing to pay for it, and make it mandatory for everyone, we ignore why it was a premium in the first place. Instead of giving the poor a free lunch, the bill could force them to buy a more expensive lunch.
Marvin is the former managing editor of Tort businessworldand former chairman of the Philippine Press Council
matort@yahoo.com