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Thomas K. Thomas

New Delhi , Feb. 7

THE Internet Service Providers Association of India (ISPAI) has filed a suit with the Telecom Dispute Settlement Appellate Tribunal against the Government's decision to impose entry fee and licence fee for providing virtual private network (VPN) services. The tribunal is scheduled to take up the case on Tuesday.

The Department of Telecom had sent a notice to all Internet service providers to either pay up the entry fee ranging between Rs 1 crore and Rs 10 crore or stop offering VPN services.

DoT had given a 30-day ultimatum to the ISPs, which ends on Tuesday.

Meanwhile, Sify and HCL Infinite have paid up the entry fee to DoT.

Company sources said that the money was paid under protest.

"We have been providing VPN services for more than five years and we paid the entry fee to protect the interest of our consumers. We did not want to stop offering the services even though we do not agree with the policy," said a Sify source. Both Sify and HCL are part of ISPAI.

VPNs, which are used by corporates to connect their branch offices, account for more than 40 per cent of an ISP's revenue.

The Internet operators have taken a stance that the Government has announced the policy decisions without any consultation with the industry and the telecom regulator.

"Normally, when a policy is formulated, it is done after consultation with the industry. This time the Government has not done the due process and has not even asked the TRAI for its recommendations. Therefore this decision could be termed as illegal since set procedures were not followed," said an industry official.

The DoT had imposed a one-time entry fee apart from an annual licence fee of eight per cent of gross revenue.

The telecom regulator had also pointed out that the DoT should have taken its views before announcing the policy.

The controversy had started after BSNL refused to offer lease lines to the ISPs for providing VPN service.

BSNL had said that the ISPs were disrupting the level playing field with long-distance operators who paid Rs 100 crore as entry fee and an annual licence fee of 15 per cent.

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