Internet companies may lose permit if service not started in a year: Trai

Internet companies providing wireless service may lose their permit if they fail to start commercial service within a year of getting spectrum from the Department of Telecom, the regulator Trai said.

"For ISP licensees having spectrum assigned from the DoT, a provision should be made in the licensee agreement...That licensee shall offer the commercial service to its subscribers on demand within 12 months from the date of spectrum assignment...Failing which spectrum assigned to ISP licensee may be cancelled," Trai said.

The suggestions are part of Trai's recommendations on spectrum usage charges and presumptive adjusted gross revenue for internet service providers and commercial VSAT service providers.

The regulator provided relief to internet service providers by suggesting to the DoT that spectrum usage charge (SUC) should not be levied as percentage of AGR and existing formula-based mechanism of charging SUC should continue.

"The Authority recommends that existing system of payment of SUC charges on annual basis by ISP licensees should continue," it added.

Radio spectrum usage charges are levied on ISP licensees in accordance with the provisions of license agreement.

ISP Licensees having Broadband Wireless Access (BWA) spectrum need to pay 1 per cent of AGR (earned from BWA spectrum) as annual spectrum charges. Reliance Jio, Bharti Airtel and Tikona at present hold BWA spectrum.

However, the method to levy SUC fee on BWA spectrum holder was modified by DoT in August 2016 by introducing weighted average SUC.

For all other assigned spectrum, SUC applicable on Internet service providers is formula based and has no linkage with AGR.

The Telecom Regulatory Authority of India has recommended that the DoT may work with the Department of Space to evolve a system where the VSAT licensees are not made to run from pillar to post to get their services activated.

"The clock should start from the day the bandwidth is allotted by DoS and DoT should allot frequency within three months of allotment of spectrum by DoS. The two departments may also explore the possibility of implementing an on-line application for automating the whole process to bring in transparency," Trai said.

The regulator has recommended that the DoT should put in place a comprehensive on-line system for allocating or clearing permits.