Rolling over data

When the House of Representatives approved House Bill No. 87 last December, consumers seemed to have scored a victory. The proposed Roll Over Internet Data Act sought to answer public frustration over expiring data balances, and to ensure that unused data allocations roll over.

I understand the frustration. I share it. But I still cannot support HB 87 as drafted. The bill carries unintended consequences, and those consequences will likely hit hardest the very users it claims to protect — the prepaid users who reload only when cash allows.

HB 87 requires all internet service providers to allow customers to carry over unused data from daily, weekly, or monthly packages. They will not expire but will instead be added to the next subscription period. And any accumulated unused data at the end of the year can be converted into rebates.

Today, in postpaid plans, carryover is only for one month, as a plan feature and not as a mandatory obligation. And there is no accumulation until yearend, and no conversion into rebates. For prepaid customers, unused data do not carry over beyond the subscription period, unless the service is for no-expiry data.

If Congress mandates accumulation and rebate, then it will force providers to recognize a continuing liability to its customers beyond a calendar year. They will then need to build systems to track, verify, and apply value later. This will entail costs that will reappear as higher prices or smaller data allocations.

For prepaid and postpaid users who buy data promo offers, the bill requires unused data allocation to roll over, but only if the subscriber renews right after the lapse of the promo. If the subscriber 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 what appears to be a legislated forfeiture schedule.

Under current practice, prepaid promos typically expire, and unused allocations usually drop to zero at expiry, unless the product is expressly designed as no-expiry data. Some providers already sell packages marketed precisely for data that stays valid until fully 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 roll over, and they have not forced postpaid plans to carry unused data indefinitely.

In practice, any carryover you see today is a product feature a provider chooses to offer. It is not mandatory. The existing structure preserves choice. Prepaid consumers can pick time-bound promos when they want low prices and high volume for a short 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 offers options because regulation does not force all offers into one mold. HB 87 intends to change that. It would turn rollover from an optional feature into 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 subscriber, I find the current structure workable.

Telcos sell capacity and access to a network. A data promo resembles a gym membership. You pay for access within a defined period. If you go only twice in a month, the gym does not refund the rest of the month. The gym prices memberships on the assumption that not everyone will show up every day.

In telecom, providers price promos with a similar assumption. Some users consume every unit. Many do not. Average utilization often falls below 100%. Expiration and validity periods function as limits that make cheap, time-bound promos viable. They also help providers manage peak load and reduce the risk of carrying long-lived obligations.

I fear that HB 87 provides for a mandated product architecture that will ultimately raise prices for everyone. It will push providers toward accumulation, rollover, and rebate conversion. This will push utilization upward and extend the period during which the provider must carry a liability for unused allocation.

In short, the bill treats unused data as stored value that must carry forward and, in some cases, later convert into rebates usable for future payment. This shift will have economic consequences. Providers will have to provision for those liabilities, resulting in higher operating costs.

Providers will also attempt to better manage risks by simplifying offers, tightening rules, and avoiding creative promos that invite complaints. Over time, new costs and risks will surface in price adjustments. We should thus expect higher priced promos, smaller allocations, fewer promo variants, and more restrictive usage controls.

I am certain many consumers will not welcome such an outcome, especially those who survive on small weekly reloads. Moreover, lower-income prepaid users often miss immediate renewal windows for lack of cash. They stretch promos and reload only when they have cash. HB 87 punishes that behavior with a 20% per day decay and a hard cutoff after five days. While the bill claims to protect the public, its mechanics punish the poor.

HB 87 still awaits Senate action before it can become law. This gives lawmakers time to improve the approach. If the goal is consumer protection, regulators can achieve much of it without forcing a single design on every plan. They should remove the 20% per day reduction because it punishes the people who least deserve it.

If lawmakers insist on mandating rollover, perhaps it is better to set predictable caps. Allow a defined carryover window tied to the promo duration if renewal happens before expiry. Or set a maximum accumulated balance or a maximum carryover period. In short, make it predictable, not open-ended.

An option is to maintain the present practice of postpaid data rolling over into the next month and applying this across the board to all plans. Accumulation is time bound, without conversion. And let the customer choose a plan that he can maximize. For pre-paid, the same monthly rollover can apply.

In short, give telcos elbow room. Competition should drive product variety. Regulation should police clarity and fairness, not dictate the mechanics of every promo. Mandating rollover and year-end rebates risks turning a premium feature into a universal obligation, then pretending it has no cost.

Data that does not expire tends to cost more. That is why rollover data is a premium feature. If we take that feature now enjoyed by people willing to pay for it, and mandate it for everyone, then we ignore why it was premium in the first place. Instead of giving the poor a free lunch, the bill may just force them to buy a more expensive lunch.