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MUMBAI: Telecom Regulatory Authority of India received a reference
from Department of Telecommunication seeking recommendations on
Internet Services. The Government is contemplating to review the
policy of Internet Services with a view to address large number
of ISP licenses, grey market operations, level playing field vis-à-vis
other licensed telecom service providers, for a effective, regulated
and forward looking ISP license.
It may be recalled that Internet services were launched in India
on 15th August 1995. In November 1998 the Government opened up the
sector for providing Internet services by private operators. A liberal
licensing regime was put in place with a view to increase Internet
penetration across the country. Though large number of ISPs (389)
has been licensed to operate Internet service today, top 20 ISPs
provide Internet services to 98per cent subscribers.
Internet Telephony has been permitted to 128 ISPs, however only
32 of them are presently providing Internet Telephony. The growth
of Internet and Broadband is slow and with present growth it is
not likely to achieve the target of 18 million Internet subscribers
and 9 million Broadband connections by 2007.
Government is concerned with increasing IP telephony called grey
market. The loss of government revenue, unlicensed operation by
certain operators in violation of law of the land, depleting market
share of licensed operators are some of the reasons which necessitates
urgent review of policy of Internet services as well as ISP licensing
conditions.
Numbers of new services like IP-TV, IP-Telephony etc are becoming
very popular. The demands of the various content services are likely
to increase in coming years. The scope of services under existing
ISP license conditions are unclear. There is need to remove these
ambiguities to smoothen roll out of these services while ensuring
level playing field vis-a vis other licensed telecom operators.
The consultation paper discusses in detail various issues like
level playing field vis a vis other telecom service providers, different
foreign direct investment limits for provision of similar services
under different licenses, virtually no license fee, limited performance
bank guarantee and charging of radio spectrum based on allocated
frequency, hops, link length etc. While ISPs demand permission to
provide emerging new services as IP based value added services,
other licensed operators want level paying field as ISPs virtually
pay no license fee and very low performance bank guarantee.
ISPs are permitted to have 100 FDI if they do not setup their own
gateway (74 per cent FDI if they setup their International gateway)
but UASL and CMTS operators can normally get FDI up to just 49 per
cent unless they fulfill other conditions in which case it can go
up to 74 per cent. The spectrum charging mechanism for ISPs is based
on complex mechanism and at time very costly.
In order to address these issues pertaining to Internet Services,
Authority has decided to release a consultation paper on “Review
of Internet Services”. The consultation paper discusses in
depth present scenario, regulatory environment, emerging trend and
emphasizes the need to revamp internet services in India.
The consultation paper is available on TRAI’s website: (www.trai.gov.in)
All the stakeholders are requested to send their written comments
to the Authority through email/ fax/letter by 15th January 2007.
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