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DoT may slash entry fee for internet service providers

The Telecom Commission, the highest decision-making body in the communications ministry, is slated to clear these proposals shortly.

, ET Bureau|
Last Updated: Jul 17, 2013, 04.14 AM IST|Original: Jul 17, 2013, 04.09 AM IST
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The Telecom Commission, the highest decision-making body in the communications ministry, is slated to clear these proposals shortly.
The Telecom Commission, the highest decision-making body in the communications ministry, is slated to clear these proposals shortly.
KOLKATA: The telecom department will shortly lower entry barriers for internet service providers, or ISPs, to shore up broadband penetration levels even as the government readies to roll out a Rs 21,000-crore national fibre optic network that will take high-speed internet to India's hinterlands.

A DoT panel has recommended a steep cut in the entry fee and performance bank guarantee (PBG) requirements for Category B & C ISPs following their inclusion in the ambit of the unified licensing regime. (See table).

Category "B" ISPs operate in states/metros while those in the recently created "C Category" operate in districts.

"Entry barriers for 'B' and 'C' category ISPs are proposed to be reduced to shore up broadband penetration in keeping with National Telecom Policy 2012 goals," says an internal telecom department note, a copy of which was reviewed by ET.

The Telecom Commission, the highest decision-making body in the communications ministry, is slated to clear these proposals shortly.

DoT may slash entry fee for internet service providers
The pan-India broadband subscriber base is at a modest 15 million and DoT believes entry barriers need to be significantly lowered to make the 175 million broadband users target by 2017 a viable proposition.

The proposal to cut entry fee is also aimed at attracting potential Category C players in the districts. "A key objective is involving Category C ISPs operating in the districts to carry bandwidth to the end-consumer. Their role will become more critical once the government launches the national broadband network since mobile phone companies have failed to achieve the targeted broadband penetration levels," a top DoT official told ET.

There will be no immediate change in the entry norms of "Category A" ISPs who are licenced to provide pan-India internet services.

Internet service providers, however, are not too enthused by DoT's plans to cut entry fee and PBG caps. The industry body representing ISPs, for instance, claimed the government would fail to achieve national broadband penetration targets if ISPs are not allowed to offer Net telephony.

"Mere reduction of entry fees and PBG limits will not make any business case if ISPs in the "B & C" categories are not allowed to offer the full spectrum of telecom services, including voice over internet protocol (VoIP), under a unified permit," said Rajesh Charia, president of Internet Service Providers Asociation of India (Ispai).

Charia also claimed it would be unfair to retain the PBG requirement for ISPs whose permits expire this year or in 2014. "Since ISPs whose licences expire this year or in 2014 have already rolled out services, they should not be forced to furnish fresh performance bank guarantees to migrate to a unified licence" said the Ispai chief.

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