1179/DOT/ISPAI/06-02
11 December 2006
Member (Technology)
Department of Telecommunications,
Ministry of Communications & Information Technology,
Sanchar Bhawan,
20, Ashoka Road
New Delhi – 110 001
Reference : Meeting with ISPAI representatives on 8 December 2006.
Dear Sir,
We are extremely grateful to you for the patient hearing and kind courtesy
extended to the delegation of ISPAI on the 8th December 2006 instant when
we called on your office in respect of some of the critical issues being faced
by the ISPs.
As discussed during the meeting, we are enclosing herewith a Memorandum
of the major for your kind consideration and early resolution.
We will be too happy to provide any clarification, if required.
Thanking you,
Yours truly,
For ISP Association of India
Col. (Retd.) R. S. Perhar
Secretary
Encl : As above
CRITICAL ISSUES BEING FACED BY ISPS
WIRELESS RELATED ISSUES
Retrospective charges on WPC agreements / operating license
WPC vide letter no. L-14035/21/04-LR/3139 dated 21st April 2006 intimated
to the ISPs that spectrum charges will be applicable to be paid from the date
of issue of the Decision Letter. Although it is not mentioned in the above
letter but our members are being informed that unless and until they pay
spectrum charges retrospectively from April 2004 onwards for all frequency
assignments made, the applications with regard to new licenses/ frequency
assignments/ imports etc will be kept pending.
ISPAI suggests :
The Government is at full liberty to change terms of license, however, to ask
for payment with retrospective effect is not justified and against the
laws of natural justice. No where the above quoted letter mentions
payment from retrospective date. Keeping this in view, clearance of
applications on unrelated issues e.g. import licenses etc should not be kept
pending for reasons of existing disputes. The applications should be cleared
expeditiously to allow movement of business.
We also suggest that Spectrum charges should be charged from a date
at-least six months from the date of issue of the Decsion Letter. This
will allow ISPs to obtain import license, import equipment, test it, apply for
SACFA, obtain operating license and install equipment. In case the SACFA
process is shortened in time this period of six months can also be suitably
reduced.
Charges to be levied on BTS on City/ Location Basis
To provide QOS, obtain LOS and make efficient use of the spectrum allocated
ISPs have to install a number of BTS in a local area. As per present
regulations the ISP’s have to pay license fee for every additional BTS within
the service area even in two adjacent buildings and using the same spot
frequency therby making rollout extremely expensive in opex..
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ISPAI suggests :
License fee should be levied as presently applicable for first BTS in each on
City / Town instead of per BTS the additional BTS be charged nil license fees
or a nominal amount of say Rs 1000 per annum. This will help in effective
use of spectrum as the frequency being used is the same, affordable pricing
to the public at large and quick roll out of Broadband services across the
country.
De-licensing of 5.7GHz Band
ISPAI will welcome the govt’s move to de-license the 5.7 GHz band,
Allocation of 2.5, 3.3 and 3.5 Band
With regard to the allocation of the above bands to ISP’s for rolling out
WIMAX services in both urban and rural areas and also keeping in view the
recommendations of TRAI of 27 Sept. ISPAI has already sent its comments
vide our letter no 1262/WPC/ISPAI/06/01 dated December 4, 2006 Copy
attached for ready reference. We wish to further state that though we have
recommended that the allocation of these bands should continue as hitherto- fore and that auction process keeping in view the differences in licensing
conditions, services provided, financial worth etc of ISP’s vis-a- vis telcos is
not justified. We also state that when the expert committee is considering
the TRAI recommendations regarding vacation / migration of 2.5 and 3.3
band then all ISP’s allocated this band and presently operating on it may be
compensated to the extent of their investments and consequential losses as
has been done for defence.
We also request that the applications for allocation of the 3.3 Band which
have been lying pending of ISP’s in some cases for over a year maybe
expeditiously cleared. In case any under taking is required pending decision
of the Govt on TRAI recommendations ,same can be communicated to the
respective ISP’s. We request the DOT to let business continue by clearing the
applications immediately. The ISP’s are under extreme financial burden
awaiting clearances.
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As suggested by your good offices we will request The Wireless Advisor,
Chairman of the Expert Committee to allow us the opportunity to present our
views on TRAI recommendations on ““Allocation and pricing of spectrum for
3G services and Broadband Wireless Access” to the committee .A request in
this regard is being sent.
LICENSING ISSUES
ISPAI suggests that Government should take a holistic review of ISP license
including Internet Telephony.
Internet Telephony – Level playing field
As per the guidelines for issue of permission to offer Internet Telephony
Services “Only ISP licensees are permitted, within their service area, to offer
such Internet Services. Subsequently, w.e.f. 1st January 2006 this service
has also been included within the UASL license. Hence Internet Telephony
service can be offered in India either by ISPs specifically permitted to do so
(in a restricted manner) or by a UASL licensee un-restricted.
Some foreign service providers like Net 2 Phone, Vonage, Dialpad, Impetus,
Novanet, Euros, skype, yahoo, msn etc are providing Internet Telephony to
the Corporate, Call Cenres, BPOs and people of India. People can visit
websites and buy minutes by making payments through credit cards.
Essentially, these vendors just buy minutes from companies like those
mentioned or buy directly from the websites and then re-sell it locally to the
corporate, call centres, BPOs etc. This causes loss of foreign exchange and
license fees to the nation
It is a matter of record that these service providers do not possess the
requisite license as mandated by the Government of India for Indian ISPs,
thus not only disturbing the level playing field for bona fide licensees, but
also causing
great loss of revenue to the government. These service
providers don’t charge 12.24% Service Tax on the Internet Telephony
minutes nor 6% AGR imposed by Govt. w.e.f. from 1 January 2006.
It is also a serious security threat to the nation as these service providers do
not come under any Indian regulatory/policy framework. It may not be
possible to obtain any data pertaining to the use of Internet Telephony like
CDRs etc from them.
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ISPAI suggests
Either 12.24% Service Tax and 6% AGR (proposed) should not be applicable
on Indian ISPs offering Internet Telephony services or foreign service
providers should be brought under the Indian licensing regime.
DoT should put a notice on its websites as well as in the print media clearly
indicating the names of operational ISPs with Internet Telephony Licenses so
that ISPs can educate the users not to use the services of un-authorized
service providers
While issuing new OSP licenses DoT should take an undertaking from the call
centres, BPO, KPO to mention the name of authorized service providers from
which Bandwidth and Internet Telephony Minutes will be taken. DoT should
ask OSP to provide copy of bill of Internet Telephony minutes at least once in
6 months to avoid use of illegal Internet Telephony Minutes.
Clearance of ISPs / ITSP Licensees
It has come to our notice that Department has kept pending ,for months,
issue any new licenses for ISPs as well as licensees for provisioning of
Internet Telephony by the existing ISPs. Number of potential investors and
applicants including those with FDI proposals are awaiting license. This delay
if allowed to carry on will result in investment moving into other countries,
thereby directly effecting growth of Internet including Broadband in India.
ISPAI suggests :
Govt should encourage more and more companies to become ISPs so as to
spread the use of broadband across the country and bridge the digital divide.
The pending licensee may pleased be cleared expeditiously.
DoT should fix up time frame for issuance of license, other clearance and
status of pending applications should be made available in a transparent
manner.
Interconnection between ISPs and ITSPs
Interconnection between ISPs and ISPs offering Internet Telephony should be
allowed as all the upstream service providers hold the Internet Telephony
licenses and ISP has to take bandwidth from them, therefore, there will an
interconnection between them.
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Steps need to be taken for proliferation of Broadband in the Country
specially in remote and rural areas
Hon’ble Minister has declared the year 2007 as Broadband year. Target set
by Government in the Broadband Policy can be achieved and ISPs can play
vital role in achieving the targets if the Government consider the following :
ISPs role in remote/rural Broadband Penetration
Local ISPs can help people in remote /rural areas by providing them training,
guidance and maintain their computers/systems. It can help in creating new
employment opportunities for the rural people by encouraging them to start
their own business (cyber dhaba).
Since local/ small ISPs are closer to the user and in a position to know their
social and financial conditions better than multiple service providers can
provide the best possible route to entrepreneurship to rural mass with a
sense of fulfillment of a larger social goal.
Why Broadband Network
We must agree on certain key attributes and objectives to be used as the
basic criteria for broadband to be classified as a ‘key infrastructure’ in the
true sense. It would be appropriate to extend the Income Tax benefits under
section 80 (I) (A) to ISPs and other licensees who are authorized to provide
Internet and Broadband access.
Support from USO Fund for Rural Broadband
Support from the USO Fund must be provided for all new rollouts if the
service offering inherently and necessarily includes broadband in the rural
areas; limiting the same to voice telephony alone would mean higher
dependence on subsidies and lesser local support from the community. This
would significantly reduce the load on subsidies.
While announcing Broadband Policy 2004, the government had said that
“Broadband services can reach the urban and rural consumers only if
services are offered at affordable and easy terms. Department of
Telecommunications will work out a package in consultation with Ministry of
Finance and related Departments as well as concerned service providers to
achieve this.”
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Rural Internet Telephony
Internet Telephony in rural/remote areas can easily be bundled with
Broadband connection. One PC with broadband connection with Internet
Telephony at least to a Post Office, Panchayat and/or District Head Quarter .
Rural mass can be benefited immensely by the bundle of services instead of
plain Telephone. They can use it for talking to their relatives in towns/cities
in a much lower rates. If a person sitting in Delhi or Mumbai can talk to a
person in New York or LA for less than Rs. 2 a minutes why can’t we offer
such facility to our own people with in India. It will be help in bridging the
digital divide.
Unified access providers will never offer unrestricted VoIP as it would
compete with its core offering. Therefore, unrestricted VoIP should be
allowed to ISPs. Then only UAS providers would compulsorily start this
service to offer benefit to all using Internets and thus paving the way for
popularizing IP based services. – thus enabling the incentives for Nexgen
Networks and platform independent services to the customers.
Infrastructure Sharing
Roll out of Broadband, IPTV and Internet in the remote and rural area is
possible if UASL and/or Basic Operators share their networks / resources with
ISPs on a commercial terms and condition. It is learnt that BSNL copper is
reach almost 20 km of every villages. Same can be shared with ISPs in
reaching to the rural mass to connect them to the world.
Wireless in the Last Mile/ Access Network
Wireless is the best alternative for last mile connectivity. Government should
facilitate ISPs use Wireless for last mile specially in rural/remote areas as it is
an ideal solution for extending the access in rural areas. We must be open to
cover all technologies not limited to GSM and CDMA but also Wi-max, VSAT
and any other upcoming technology.
Since the chances of harmful interference in rural areas are virtually remote,
higher power output should be permitted; e.g. FCC in the US is considering
up to 25 watt EIRP or BTS installed in the rural areas whereas the typical
limits in the urban areas is just 4 watts. This would also enhance the cell size
catchment area under coverage and thus decrease the total cost. As the
same time, instead of roll out obligations, incentives should be given for
investment in rural areas. Similarly to reduce the VSAT cost, we explore to
reduce the Antenna size to .9 M
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