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March 9, 1998


The E-Trade Barrier

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DoT has allowed private data networks to transact
financial info online. But will the TRAI agree?

The Department of Telecommunications has allowed private data networks to transact financial information but senior officers in the Telecom Regulatory Authority of India have hinted that the decision may be struck down.

TRAI sources have been reported as saying that there is "no change" in the
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regulator's stance on "new policies or services".

On February 14, TRAI Chairperson S S Sodhi had debarred the Mahanagar Telephone Nigam Limited from entering cellular services and declared the government's Internet policy "invalid" because the TRAI had not been consulted on the two issues.

TRAI has not been consulted on the interconnection of networks in the country either.

Policy changes announced on Friday allow private data networks to interconnect their networks for the purpose of commercial transactions. Until now, these private networks were 'closed user groups' or CUGs only, with a reach restricted to its own subscribers.

The government decision, if it is not blocked by the TRAI, is likely to give a fillip to interconnected networks in the country.

Consequent to the decision, permission has been granted to stock exchanges to sell real-time information to the financial information service providers, or any other organisation on a commercial basis.

News organisations like Reuters, Dow Jones, Bloomberg and Knight-Ridder Financials (KRF), besides SITA, a society carrying out telecommunication activities for member airlines worldwide and computerised reservation systems of airlines are among those that will benefit.

Until now, for instance, networks like Bloomberg, or Dow Jones, could not access real-time stock quotes from the Bombay Stock Exchange and other stock exchanges because of government restrictions on connectivity between networks.

Only three news agencies and financial information providers, Reuters, KRF and Bombay based DARTLine, had been allowed to directly access stock information from the BSE.

Competitors like Bloomberg and Dow Jones had not been allowed to do so. Reuters and others were allowed access to BSE stock information in 1993-94 when the government "policy on the matter was not very clear," said DoT officials.

Subsequently, however, when providers like Bloomberg asked for permission to source information from BSE, they were not allowed because of government restrictions on interconnection between CUGs.

In fact, DoT had earlier severed the link between BSE and Reuters since interconnection between CUGs was not allowed. The link was restored after Reuters subscribers, many of them within the government, protested the move.

In allowing interconnection among networks, DoT has created a new category of private networks called Broadbased User Group data network.

According to a government press release, a BUG will be a group of interconnected private networks, which offer "different types of services having common interests" and will be allowed to provide services on a commercial basis to limited groups of users.

The pricing of the BUG networks is yet to be worked out. The telecom commission, the nine-member apex body of DoT, is working out BUG tariff details.

It will also rationalise tariff for connecting to DoT's public data network like India Net, High Speed VSAT Network and Remote Area Business Management Network.

New BUGs can lease links from DoT, or use public networks like the Inet to distribute their information.

- Compiled from the Indian media

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