TRAI put regulations on ISP
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TRAI put regulations on ISP

By agencies   |   Friday, 11 May 2007, 07:00 Hrs
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New Delhi: The Telecom Regulatory Authority of India (TRAI) has proposed to do away with the district-based Internet licenses, apart from making it mandatory for all Internet service providers (ISPs) to pay an entry fee and an annual license fee. TRAI has also proposed to bring down the FDI cap for ISPs from 100 per cent to 74 per cent.

Presently, ISPs pay only re 1 as license fee while the Internet telecom service providers or telecom operators providing Internet services, pay six percent of their annual gross revenue as license fee. According to TRAI, there should be uniformity and independent iSPs that provide Internet telephony should also pay six percent of their annual gross revenue as license fee.

TRAI said that the recommendations are aimed at addressing issues relating to financial viability, grey market and competition, including level playing field with other telecom service providers. It aimed to weed out non-serious players in the sector, says the regulator.

Out of 389 companies that have an ISP license, only 135 are functionally active. Out of this, 20 top ISPs own 95 percent of the 8.5-million Internet subscribers. "It is reported that approximately 85 such licensees do not even have the correct address on which the license was issued. Taking a serious view, TRAI has recommended that these ISPs be immediately inspected by DoT Vigilance Monitoring Wing to ascertain their presence, nature of activities and financial viability," says a TRAI release.

TRAI has given an option that non-functional ISPs should either surrender their license or pay a 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, respectively. It added that the ISPs at the district should migrate either to the State-level or national level category.

ISPs said that the TRAI recommendations were retrograde. "It is very clear that TRAI wants to promote only the bigger players. The truth is that it is the category C ISPs operating at the district levels, which are providing valuable Internet services in small towns and villages.

At a time when the Government has declared 2007 as the year of the broadband, these suggestions are acting contrary to that objective," says Rajesh Charria, President, Internet Service Providers Association of India (ISPAI). Charria operates a district-level ISP under the brand CJ Online in Ghaziabad, which will either have to forcefully move to a State level ISP by paying the charges or shut shop.

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