Opening up the Internet

Print edition : November 29, 1997

The new Internet policy of the Government of India will help put a lot more subscribers on the Net.

WITH the new Internet policy announced recently by the Government, the Telecom Department has finally been persuaded to allow private Internet Service Providers (ISP) access to surplus line capacities available with communication networks other than its own. The major beneficiaries of the new policy, apart from prospective Internet subscribers, will be the Railways and the Powergrid, certain State Electricity Boards and the Gas Authority of India Ltd. The policy is based on the recommendations of the Jalan Committee, which examined various aspects of privatisation of Internet access.

Videsh Sanchar Nigam Limited (VSNL) is now the monopoly service provider for Internet access. In addition to providing gateways for international connectivity, VSNL is the only organisation providing Internet access to individual subscribers in India. Under the new policy, gateway access and voice telephony will still remain with VSNL, but private Internet service providers can provide customer access by leasing lines either from VSNL or from the Railways, Powergrid and others. "The new policy has come after years of hectic lobbying," says V.P. Chandan, Additional Member, Telecommunications, in the Railway Board.

Historically, the Railways have always had their own telephone networks in three circuits - for train control, administrative control and emergency management. These stretch over 42,000 km across the country. According to Chandan, there is surplus capacity in many regions. In these and even in other regions where there is no surplus capacity, multiplexers can be used to augment capacity. Therefore, with new investment, an enormous new capacity for access by prospective Internet users will now become available. However, the Department of Telecommunications (DoT) did not allow the Railways to lease out its lines to other users. In fact, the Government did not allow the Railways to bid for providing basic telephone services on the ground that this should be done only by the private sector. With the opening up of Internet access, the Railways can finally put their surplus capacity to commercial use.

THOSE service providers who choose to lease lines from VSNL will be charged promotional rates for port facilities and for the leasing of lines. The fee that will be charged by the service providers to the final customer is to be determined by the market. Since there is no limit on the number of service providers that can operate, Internet access charges are expected to come down considerably, encouraging more subscribers to come on board the Net. The DoT expects the policy to bring in two million subscribers to the Net in India and abroad in the next two to three years.

The selection of the service providers will be done by the DoT, possibly through a tendering process. The technical and financial strengths of the bidders will be the primary consideration in shortlisting them. Guidelines for this are being drawn. Initially, as a promotional measure, the service providers will not be charged licence fees. They will, however, be expected to make a security deposit and give a bank guarantee. The bank guarantee amount and the licence fee to be charged after three years are to be determined by a committee to be set up for the purpose. However, it is not clear whether the service providers will be allowed to charge less than what the VSNL charges its customers.

According to Chandan, the Railways will charge commercial rates, and not promotional rates, for leasing out its lines to service providers. Chandan is hopeful that despite the higher rates, there will be takers for Railway lines since the quality of service will be much better than that of the DoT. "For instance," Chandan says, "when there is a breakdown, we will treat it as an accident and bear the cost as well as set right the lines immediately. The DoT does not do that."

This is echoed by the Powergrid Corporation of India Limited (PGCIL). Its Executive Director, A.K. Bhatnagar, told Frontline that it would not be feasible for PGCIL to charge promotional rates to service providers although they would like to lease out 2mb streams to them. PGCIL is putting up 24 fibre optic cables over 3,000 km in the North and the South at a cost of Rs.700 crores. In the next two years, there will be optic fibre cables laid over 6,000 km along all arterial routes. PGCIL will need only six to eight fibres for transmitting power and the rest will be available for other purposes. Bhatnagar said that VSNL has approached PGCIL for leasing out 12 of the surplus fibres in their fibre optic network.

Although PGCIL would be doing business with service providers, it is looking more at the voice telephony market. "Once that is deregulated by 1999, we will be doing major business. Internet service provision doesn't pay much," said Bhatnagar.

PGCIL will also put up the equipment for providing bandwidth if the service providers want it. Both PGCIL and the Railways will have to get their proposal for investment cleared by their respective boards. The Railways may even bid for becoming Internet Service Providers themselves.

THE new policy also seeks to allow, in due course, access to multiple gateways for international connectivity, if necessary. The Railways, for instance, plan to use the facility of utilising dedicated VSNL gateways up to Washington and New York and foreign gateways thereon, as and when this is allowed. The target date for opening up international communications to overseas operators is 2004, but it might be even earlier.

The Telecom Regulatory Authority of India (TRAI) has released a consultative paper on Internet tariff that incorporates a proposal by the Telecom Commission to reduce tariffs for Transmission Control Protocol/Internet Protocol dial-up services in order to promote the use of Internet.

The TRAI has suggested that an interim tariff for Internet access be framed and implemented until the operators are able to charge the highly reduced tariffs recommended by the Telecom Commission.

The new Internet policy, in conjunction with the TRAI's recommendations, should put a lot more subscribers on the Net.

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