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Thomas K. Thomas

New Delhi, Aug. 25 The Government has decided to impose an annual licence and an entry fee for Internet service providers.

As part of its new policy for ISPs, the Department of Telecom has also decided to stop issuing new licences for small district level operators.

The permitted foreign direct investment cap for ISPs has also been reduced from 100 per cent to 74 per cent. The policy is in line with the recommendations of the Telecom Regulatory Authority of India.

While the policy has been formulated with the objective of giving a boost to the growth of Internet services in the country, ISPs said the new measures could sound the death knell of a large number of operators, especially the smaller ones who will not be able to pay annual licence fees.

While DoT has allowed ISPs to offer Internet protocol television (IPTV), only those companies with a net worth of Rs 100 crore a year will be eligible for offering the service. Only about five ISPs out of the over 250 operators may qualify for IPTV services under this criterion. IPTV allows users to access TV through Internet.

DoT has also decided to retain only 2 categories of ISP licences – National level and State level. District level operators are required to migrate to a State level licence by paying an annual licence fee of 6 per cent of their annual revenue and an entry fee of Rs 10 lakh or Rs 20 lakh if they want to migrate to national level operator.

In case they do not migrate, they will have to shut shop after the expiry of the licence. While existing State and National level operators do not have to pay an entry fee they will have to pay the licence fee.

DoT has also changed the norms for using satellite gateways by the ISPs.

“Earlier ISPs only had to apply for approval, but could use any approved satellite and its capacity.The new condition to apply to licensor for transponder capacity means that DoT will be the canalising agency for satellite capacity for ISP and they will no longer be able to decide whom to contract with. This is damaging to the earlier liberal policy,” said Mr Amitabh Singhal, founder member and Director- General, Internet Services Providers Association of India. DoT has also not agreed to ISPs request to allow unrestricted Internet telephony.

“The new recommendations will do nothing to lift the broadband penetration in the country. The whole exercise has been to merely modify and roll the 1998 policy even further back. It offers no new grounds for innovation, customer benefits and actually throttles the Internet sector, and is unprecedented for any democratic country and its governance of Internet,” said Mr Singhal.

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