India ISP body says new regulations 'disastrous'

By:
Bill Boyle
Published on:

The ISP Association of India has approached the Indian sector regulator to express its concern over the latest decision by the regulator on spectrum usage charges

The ISP Association of India has approached Telecom Minister Manoj Sinha and the Indian sector regulator to express its concern over the latest consultation paper by the regulator on spectrum usage charges (SUC). They claim that any move to link spectrum usage charges to revenue is “disastrous”.

Rajesh Chharia, the president of the ISP Association of India (ISPAI), said: “We are going to make a representation to the Telecom Minister and Telecom Secretary this week and seek a meeting with them to voice our concerns.”

The sector regulator Telecom Regulatory Authority of India (TRAI), last week, sought public feedback on levying spectrum usage charges linked to annual revenues for internet service providers (ISPs), something similar to the norms for mobile companies. The move could potentially push up broadband costs for consumers as ISPs currently pay what is called ‘formula-based spectrum charges’.

“We are opposed to TRAI’s proposal of imposing SUC linked to revenue. Also, it is not clear as to which revenue it will be linked to…the revenue derived from that spectrum or the entire revenue, which also involves our optical fibre backbone. SUC should not be linked to our entire revenue” Chharia said.

At present, the service providers with cellular mobile telephone services and unified access service licences are assigned spectrum through the market-based mechanism (auctions). They pay SUC on the basis of percentage of their gross revenue. “However, there are certain categories of telecom/ broadcast licensees to whom spectrum is assigned administratively and SUC is based on a formula basis. ISPs are among such licensee. The present criterion of spectrum allocation to ISPs is on a city-wise basis, subject to the availability of spectrum,” the regulator noted in the consultation paper. The discussion paper sought views on whether there is “a need to introduce SUC based on a percentage of AGR for ISPs or should the existing formula based spectrum charges continue”.

The issue has unleashed very strong feelings with The India Express quoting Chharia as saying: “We have had a number of meetings of the office bearers of ISPAI on the issue. It is our view that the present system should not be disturbed when things are moving smoothly…otherwise it will be disastrous,” Chharia said pointing out that spectrum is being used as the last mile access where optical fibre does not reach, in order to connect the unconnected people: “Any additional charge on spectrum will lead to a hike in the cost of service and will have an adverse impact on Internet proliferation in rural areas.”

Trai has set September 19 as the last date for receiving comments and October 3 as the last date for counter-comments to be submitted.

Companies offering Internet services include Bharti Airtel, Reliance Communications, Tikona, Bharti Airtel, Reliance Communications and Tata Communications.