Ethicality of certain practices in the telecommunication industry

Disclaimer: My previous employer is a subsidiary of SingTel and I have vested interest in SingTel since I own 0.00000000001% of SingTel. Nevertheless, I will try to be as impartial as possible.


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The first issue I would like to examine is the ethicality of misrepresentation of broadband speeds. Most people would encounter such a situation when despite signing up for 6Mbps broadband, you discover that your downloads never inch past 500KBps. I know that there are a myriad of reasons such as overhead of TCP protocol, bottleneck on the server side and the most obvious one that people don’t seem to realise. ISPs use Megabits/sec as an indicator while your downloads use KiloBytes/sec or MegaBytes/sec as an indicator. There are 8 bits in a byte so your actual download speed is actually 4000Kilobits/sec of 4 Megabits/sec, 66% of advertised speed.

Anyway, I will not be focusing on those issues as those are beyond the control of the ISP. Instead I will be focusing on the issue of ISPs knowingly offering less than advertised broadband speed. What happens when you sign up for a 6Mbps ADSL connection is that you get the 6Mbps connection all the way to an intermediate point known as a DSLAM. The DSLAM aggregates all the traffic and transmit it in 1 single pipe to the exchange. Therefore, during peak periods, the bandwidth of the DSLAM might not be sufficient to handle the traffic, therefore resulting in a bottleneck. Assuming that the DSLAM can handle 600Mbps of traffic, is it ethical then to connect more than 100 subscribers to the same DSLAM?

Using utilitarian ethics, the ISP will definitely benefit as they are able to cram more subscribers into current infrastructure, thus the cost of providing an additional subscriber with access is almost zero. Would the subscribers benefit? My opinion is yes. Since not everyone is using the full 6Mbps of the connection 24/7, subscribers generally have optimal connection most of the time except during peak hours, when connection speed might drop. In return, the ISP is actually charging us a far lower price than the true cost of providing 6Mbps internet. Go look up the cost of a dedicated lease line if you don’t believe me. A dedicated line would guarantee the full 6Mbps any time of the day since you are connected directly to the exchange and not sharing the line with anybody. Therefore, according to utilitarian ethics, such a practice is ethical since both parties benefit from such an arrangement.

From the Kantian point of view, it is unethical if we were to apply the first formulation. If everyone lied, no one would trust anyone else and therefore it would be impossible to lie, which would contradict the original statement. Using the second formulation, we discover that the ISP is treating the subscribers as a means to an end, using subscribers for their own profit and not fulfilling their part of the agreement. Therefore, it is unethical if analysed using Kantian ethics.

Using the ACM code of conduct to evaluate the issue, we find that the issue contravenes clause 1.3 but supports clause 2.1. Such an action is not honest or trustworthy as it involves deceiving the subscriber by providing less than advertised broadband speed during peak periods. However, through the deceit, the ISP is able to provide customers with a higher quality connection at a lower price, therefore it is in support of clause 2.1 which advocates highest quality and effectiveness in your products.

Such is the limitation of Kantian ethics; it allows for no exceptions to be made to its perfect duties regardless of circumstances. Even though the ISP has deceived its subscribers, the subscribers are actually benefiting since they are able to get a better connection most of the time at a much lower price. If the ISP had not done so, it would either have had to offer a much lower speed for the same price. This would result in huge underutilisation of the infrastructure during non-peak hours, during which subscribers would still be capped by their low download speeds despite there being additional capacity on the network.

As for me, I have learnt to schedule heavy usage during non-peak periods and am glad to have light users subsidise the cost of providing me with a good internet connection. So far, I have not experienced problems with basic browsing during peak periods as the ISPs has set into place QoS filters that prioritise web traffic over P2P downloads. The complainers are usually the ones who choose to download during peak periods. Such situations can easily be avoided with a little time management. If you do however insist on having no less than the speed you paid for, feel free to pay the true costs of such a connection by subscribing for a dedicated line, the ISPs even provide a Service Level Agreement(SLA), so technically you could sue them for compensation if your connection does meet the standards specified. As for me a shared connection is enough for my needs.

In short, the issue is ethical if we analyse the outcome but unethical if we analyse the intentions. Nevertheless, I believe that since subscribers benefit even though they were deceived, the end outcome is still positive.


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The next issue I would like to analyse is the ethicality of over utilisation of 3G networks. Most of us are familiar with the situation especially in recent years before the introduction of 4G, when 3G speeds all over the island practically slowed to a crawl. Is it ethical for Telcos to continue to sign up new subscribers for these networks without upgrading the infrastructure to support a greater number of connections?

Analysing the issue from a business standpoint, it is definitely a bad business decision to invest in 3G infrastructure especially with 4G looming around the corner, as it is soon to be obsolete and the rate of returns on investment is very likely to be low. It also increases the disincentives for subscribers to switch over to the 4G network since 3G networks are perfectly capable of satisfying their requirements. Nevertheless, the question exists if Telcos should still continue to sign up subscribers. Since the cost of providing service to 1 additional user is marginal, there is no incentive for Telcos not to sign up new subscribers. However, since the networks are very likely to be oversaturated, subscribers may be experiencing speeds that are far less than advertised.

From the utilitarian perspective, the Telcos stand to benefit from the increase in revenue generated from the increase in number of subscribers. The subscribers may gripe about the issue but often have little choice as the problem may be rampant among the 3 Telcos. In addition, subscribers are often tied into contracts of 1-2 years, therefore it might not be possible for them to switch Telcos immediately. However, this benefit comes at a cost to the subscribers. They have to endure sub-par service standards as a result. In such a case, I believe the costs of intermittent internet access outweigh the savings enjoyed by the Telcos. Such an action is thus unethical when analysed using the utilitarian methodology.

One limitation of the utilitarian method is that it only takes into account the total good, but does not factor in unequal distribution of the benefits. In the case above, while the Telcos benefit a lot from such an action, the subscribers on the other hand, experience large amount of inconvenience and frustration. This does not seem fair as the subscribers are the ones who have paid the Telcos for the provision of the service. It is also extremely difficult to quantify the costs of the poor 3G speeds for the subscriber, as such it is extremely difficult to make an accurate prediction on the actual costs incurred.

Using the Kantian approach, we can conclude that the action is unethical using the second formulation. The Telcos are exploiting the subscribers and using them as a means to generate profit while not providing them with an acceptable standard of service. Using the first formulation, we can derive that if all Telcos were to oversaturate their 3G networks, subscribers might get so annoyed that they choose to forgo 3G data. In such a case, it would be impossible to oversaturate the infrastructure since there are no longer any subscribers, contradicting the first statement. Nevertheless, such a statement is rather extreme. In reality, while some subscribers might choose to forgo 3G altogether, there are others who would not be able to live without it. As a result, subscription for 3G might dip slightly, just enough for the infrastructure to be able to handle. This would once again contradict the first statement as it would prove impossible to oversaturate the infrastructure

Therefore, using both the utilitarian and the Kantian method, I have deduced that oversaturation of 3G infrastructure in a bid to save costs is unethical. In reality however, Telcos might still choose the unethical option due to profit motives. As highlighted earlier, the Telcos do have an edge over the subscribers since subscribers are often bound by their contracts. In addition, if all the Telcos adopt the same strategy, subscribers often have no choice but to accept their terms or go without 3G data.