ISP body to approach DoT, Telecom Ministry over spectrum levy

New Delhi: Terming any move to link spectrum usage charges to the revenue as "disastrous", ISP Association of India on Sunday said it plans to approach Telecom Minister Manoj Sinha and also Telecom Secretary to express its concern over the latest consultation paper by the sector regulator.

"We are going to make a representation to the Telecom Minister and Telecom Secretary this week and seek a meeting with them to voice our concerns," ISP Association of India (ISPAI) President, Rajesh Chharia told PTI.

The sector regulator TRAI, last week, sought public feedback on levying spectrum usage charges linked to annual revenues for Internet service providers, something similar to the norms for mobile companies.

The move could potentially push up broadband costs for consumers as ISPs currently pay "formula-based spectrum charges".

According to Chharia, the formula-based spectrum charges work out to Rs 7.2 lakh for 6MHz spectrum for one year.

"We are opposed to TRAI's proposal of imposing SUC linked to revenue. Also it is not clear as to which revenue it will be linked to...The revenue derived from that spectrum or the entire revenue, which also involves our optical fibre backbone. SUC should not be linked to our entire revenue" Chharia said.

At present, the service providers with Cellular Mobile Telephone Services and Unified Access Service Licence are assigned spectrum through market-based mechanism (auctions). They pay spectrum usage charge (SUC) on the basis of percentage of their gross revenue called AGR.

"However, there are certain categories of telecom/ broadcast licensees to whom spectrum is assigned administratively and SUC is based on a formula-basis. ISPs are among such licensees... Present criterion of spectrum allocation to ISPs is city-wise basis, subject to the availability of spectrum," the regulator noted in the consultation paper.

The discussion paper sought views on whether there is "a need to introduce SUC based on percentage of AGR for ISPs or should the existing formula based spectrum charges continue". Companies offering Internet services include names like Tikona, Bharti Airtel, Reliance Communications and Tata Communications.

"We have had a meeting of office bearers of ISPAI on the issue. It is our view that the present system should not be disturbed, when things are moving smoothly...Otherwise it will be disastrous," he said.

Chharia pointed out that spectrum is being used as the last mile access where optical fibre does not reach, in order to connect the unconnected people.

"So, any additional charge on spectrum will lead to a hike in the cost of service and will have an adverse impact on Internet proliferation in rural areas," he added.

Trai has set September 19 as the last date for receiving comments and October 3 for counter-comments.