ISP approaches telecom ministry for spectrum usage charges

ISP Association of India (ISPAI) president, Rajesh Chharia notified that ISP is going to make a representation to the telecom minister and telecom secretary this week and seek a meeting with them to voice their concerns.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”. Chharia further mentioned that the formula-based spectrum charges work out to Rs 7.2 lakh for 6 MHz spectrum for one year. He also notified that they 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 their optical fiber backbone.

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.

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.

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