The Hindu Business Line : TRAI examining DoT role in ISP licence fee issue

IN an unprecedented move, the Telecom Regulatory Authority of India (TRAI) is examining whether the Government had carried out the due process before imposing a licence fee on the Internet Service Providers (ISPs).

TRAI officials maintain that the Department of Telecom (DoT) had not referred the issue to the telecom regulator and a decision was taken without open house discussions and consultation. "We are examining whether the DoT was required to refer the matter to us and whether they have followed the due process while finalising the decision," senior TRAI officials told Business Line. When contacted, the DoT Secretary, Mr Nripendra Mishra, said: "We are confident that the process was followed. There was no need to go to the regulator since we have only expanded the scope of the ISP licence. It's not a new licence."

The DoT had imposed an entry fee between Rs 1 crore and Rs 10 crore on the Internet service providers, apart from an annual licence fee of eight per cent of the annual revenues. The ISPs were allowed to offer virtual private network (VPN) services as part of its licence. This came as a blow to the ISPs since they were already offering VPN services for more than five years without paying any entry or licence fees.

The ISPs may go to court against the DoT's decision on grounds 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 Mr Amitabh Singhal, President, Internet Service Providers Association of India (ISPAI).

The DoT justified its decision saying that the entry fee had to be imposed to level the playing field with long distance operators who paid Rs 100 crore as entry fee and an annual licence fee of 15 per cent.

However, the long distance operators are also not too happy with the Government's decision. Long distance operators said that the ISPs were eating into their profits by offering VPN services and, therefore, the licence conditions should be similar when it comes to entry fee and the licence fee paid.

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