The Hindu Business Line : Wi-Fi services to be de-licensed — States to decide on waiving entertainment tax on broadband

THE Government has decided to de-licence Wi-Fi services as part of its broadband policy to be announced later this month. It has also decided to take up with State Governments the issue of waiving entertainment tax on broadband subscription.

As per the broadband policy being formalised, the Government will explore alternative spectrum bands specifically for deploying broadband services and offer price incentives for its usage. The policy also envisages subsidies on leased lines for those Internet service providers connecting to the National Internet Exchange (NIXI).

Deregulation of Wi-Fi services would enable consumers to use Internet and broadband services on their laptops outside offices and homes without connecting to a phone. At present, access to Wi-Fi services is restricted to campuses and closed units like offices, airports and schools.

The Government has, however, shot down most of the significant recommendations given by the Telecom Regulatory Authority of India. Service providers which were expecting huge tax benefits and duty concessions for broadband may be disappointed as the TRAI recommendation including a five-year tax holiday for ISPs and exemption of service tax, has been rejected. The direction taken in the policy relies heavily on the performance of the state-owned BSNL and MTNL to meet the target of 20 million broadband subscribers by 2010.

On the issue of local unbundling, which would have allowed ISPs to ride on integrated telecom operators' national network to offer broadband services, the Government has decided to leave it to individual operators whether or not to un-bundle their last mile. The Government will undertake a review of this issue after March 31, 2006. While TRAI had suggested a time-bound unbundling for all operators, policymakers opined that the market does not require intervention in commercial arrangements between operators.

ISPs that connect to NIXI would get about 30-50 per cent concession in leased line cost. That apart, measures have been suggested to streamline the system of frequency allocation and other clearances by removing cumbersome procedures and through computerisation of the Wireless Planning and Co-ordination Committee. There is some relief coming in VSAT operators' way with the Government deciding to keep out the earnings from hardware sold to consumers from its annual revenues used to determine the licence fee. Relaxation on VSAT licence fee and the open sky policy suggested by TRAI has also been grounded.

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Wi-Fi services to be de-licensed — States to decide on waiving entertainment tax on broadband