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December 23, 1997


The World Wide Wait

The announcement of India's landmark Internet policy will be
delayed once again. This time the culprit is the impending poll.

The announcement of the Internet policy, which was supposed to be made by the beginning of next year, that is next week, may have to be delayed once again.

This time the excuse is the fear in official circles that the announcement of the policy might amount to a breach of the model code of conduct in these times
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between two governments and an impending election.

Most of the entry norms have been finalised to let the private sector into the hitherto government monopoly over the ISP business. But these norms have to be ratified by an inter-ministerial committee, which is yet to meet.

This meeting, say sources, could be a mere formality but those in favour of a cautious approach would like the policy announcement decision to be referred to the Election Commission or even the law ministry for approval.

So far the only movement on the new policy has been the Telecom Commission's decision to give "service connections'' (connections paid for by the department) to its officers.

At present, the Videsh Sanchar Nigam Limited continues as the monopoly Internet service provider but its wings have been clipped and the Department of Telecommunications will handle the expansion of services in other cities.

The foreign equity limit of 49 per cent is perhaps the only regulatory element in the entire policy. There is no requirement that applicants should have experience in information technology or telecommunications services, nor is there any limit on the number of licenses that can be given to a single ISP although there has to be a separate license for each service area.

The ISP is free to fix the tariff as it was thought prudent to let the market forces prevail. But the DoT has reserved the right to announce a tariff any time during the license period.

To facilitate the entry of small companies, the country has been divided into three categories for obtaining a license.

In the category 'A' the service area will fall in each of the territorial telecom services and metro telephone services circles. Category 'B' will comprise secondary switching areas (except the four metros). And the third category will have any city covered by a local exchange system of DoT.

Therefore, companies are free to grab a slice of the Internet cake in accordance with their financial strength. Further freedom to manoeuvre has been provided by four major policy decisions taken by the union cabinet secretary, though the DoT has voiced an opposition on security considerations.

These are permissions to provide interconnectivity between two ISPs, giving ISPs the option of connecting their Internet node either through DoT's backbone or the VSNL gateway directly for delivering international traffic and allowing flow of Internet traffic over VSAT networks hired from shared hub service providers.

The licensee has been allowed to obtain transmission lease not only from the DoT and the DoT licensed private sector basic telephone operator but also from any other license service provider such as the railways and the state electricity boards. The DOT is stridently opposed to this idea.

The license is for an initial period of 10 years and is liable for termination for any violations of 'cyberlaws' as and when they are established.

However, there will be no license fees till 2003 and the only charges will be the modem charges and bills for sundry other services that will be raised by the service provider concerned.

But there is some resentment over the stipulation of rectifying 90 per cent of the faults within 24 hours and 99 per cent within three days.

Depending on the service area, the companies will have to pay performance bank guarantees of Rs 2.5 million, Rs 1 million and Rs 500,000 (depending on the service area for which applications have been made) as well as financial guarantees of the same amount.

Despite framing a policy that has so many progressive elements doubts are being raised whether there will be any forward movement on the plea that the model election code of conduct has been enforced.

Supporters of early announcement of applications from companies say there should be no problem because the policy was approved and announced much before the President dissolved the Lok Sabha. They claim that all that remains is the tying up of a few loose ends.

- Compiled from the Indian media

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