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TRAI recommends revamp of Internet services

Written by: Staff

New Delhi, May 10: In a move that will streamline the ISP licensing regime, the Telecom Regulatory Authority of India (TRAI) today forwarded its recommendation on Internet services to the Department of Telecommunications (DoT).

Use of any device/ technology/ methodology to provide access to Internet has been permitted unless explicitly prohibited.

Restrictive Provision regarding usage of PC to make Internet telephony calls has been done away with.

All content available without any access restriction on Internet and include web hosting, web collocation have been permitted. This does not include service providers' configured closed user group services.

All Internet Service Providers (ISPs) have peen permitted to provide Internet telephony without any additional license.

The restrictions presently imposed for provision of the Internet telephony have been removed. Now any device or adopter conforming to the Standards of International Agencies can be used to make Internet telephony calls within India as well as abroad.

ISPs are not permitted to have connectivity with PSTN/PLMN.

Provision of Unified Messaging Service (UMS) has been permitted to ISP licensees without any additional Performance Bank Guarantee (PBG).

The present charging mechanism based on hops, distance and Bandwidth for RF channels for use in back haul have been changed to charging mechanism based on percentage of Adjusted gross revenue (AGR). This will reduce upfront cost of radio backhaul and encourage its use in remote and far-flung areas.

In order to encourage Web hosting in India, active interaction of DoT with foreign companies who have significant market share in global market has been advocated, TRAI said in a statement.

TRAI has also recommended major structural changes regarding functional area of ISP licence with a view to ensure viable business model. The ISPs should have a licence to operate at a national and state level. ISPs operating in smaller areas like districts have been recommended to migrate to national or state level licence.

The Authority is equally concerned with 254 ISP licensees who have nearly zero contribution to the growth of Internet.

It is reported that about 85 such licensees do not even have the correct address on which the licence was issued.

Taking a serious view, TRAI has also ordered that these ISPs be immediately inspected by DoT Vigilance Monitoring Wing to ascertain their presence, nature of activities and financial viability.

TRAI has sought a liberal exit policy for non-functional ISPs. The existing provisions have not been conducive for non-functional ISPs to surrender as it entails financial losses.

A one-time relaxation for a period of six months has been recommended by the Authority.

There are major recommendations regarding financial and regulatory levies. Free entry has been replaced by an entry fee of Rs 20 lakh for national level ISPs and Rs 10 lakh for state level ISPs licenses.

A uniform licence fee of six per cent of AGR has been recommended along with minimum annual licence fee of Rs 50,000, Rs 10,000 and Rs 5,000 for national level, state level and district level service providers.

TRAI has asked for a financial bank guarantee amount and sought a maximum FDI cap/equity of 74 per cent at par with other services of telecom sector. ISPs having 100 per cent FDI cap/equity have been given two years time for reduction to 74 per cent.

The Authority has also addressed the issue of unlicensed foreign entities providing Internet telephony at cheaper costs to lure Indian subscriber.

''TRAI is concerned with the activities of such companies, as they do not fall within the framework of discipline of telecom sector in India. Apart from security considerations there is also an apprehension that Indian subscriber is misled by such service providers.'' Although it was not within the purview of the term of reference given by the DoT, the regulator has suggested urgent consultation with such companies to register them in Indian telecom domain and get such websites hosted on the Indian territory.

TRAI hopes that the recommendations if accepted by the DoT will contribute to Internet penetration, curb grey market, effectively provide level playing field and above all serve the consumers interest.


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