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The Telecom Regulatory Authority of India and the Department of Telecom are at variance on using money from the Universal Services Obligation fund for subsidising broadband rollout in rural areas using wireless technologies.
TRAI reckons that since the Government is investing in laying an optical-fibre cable network across the country there is no need to use the USO fund for supporting wireless networks. On the other hand, the USO fund section of DoT wants both projects to run simultaneously.
“The two schemes, i.e. rural wireless broadband scheme and optical fibre up to the village scheme, are neither competitors nor mutually exclusive but will synergise to create a virtuous circle and complement and supplement each other for provisioning broadband. While the wireless scheme will take care of the last mile connectivity, the optical-fibre scheme will facilitate and provide the bandwidth to meet backhaul requirements,” the USO fund stated in an internal note.
TRAI had earlier suggested laying optical cable right up to each village in the country as part of the National Broadband Plan. DoT has accepted this recommendation and is in the process of getting Cabinet clearance for the project, estimated to cost around Rs 20,000 crore. In addition, DoT is set to float a tender for supporting wireless broadband services through a bidding process. The wireless project is expected to cost around Rs 2,000-3,000 crore. According to DoT's plan, both these projects will be supported from the USO fund, which has around Rs 25,000 crore in its kitty and expected to cross Rs 30,000 crore in 2-3 years.
Trai objects
TRAI has, however, raised objections to the wireless project on several grounds. It has told the DoT that the scheme, under its present form, is anti-competitive since only two operators will be given subsidy support in each circle. TRAI reckons that the subsidy will indirectly allow two operators to underwrite its costs. TRAI also said that the project will make it appear as if the Government was promoting 3G and broadband wireless technologies. The regulator has also raised questions on the quality of service and the benchmark value for each circle stipulated by DoT in the draft tender.
Despite the criticism, the USO fund is convinced that the project needs to go ahead. Rejecting TRAI's view on the project being anti-competitive, the USO fund said that the two operators will be selected through a bidding process giving every operator equal chance to qualify for the subsidy. “It may be mentioned that the eco-system and market for broadband in rural areas are yet to be developed. In the absence of such eco-system of broadband in rural areas, demand assessment is not feasible and it is felt that two service providers would create adequate capacities to seed the market,” the USO fund said. On the issue of promoting specific technologies, the DoT wing said that the project was technology-neutral and similar projects for broadband over satellite and cable TV networks will soon be launched.
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