Ease Licence Norms For Internet Firms: Trai

The Telecom Regulatory Authority of India (TRAI) has recommended to the information technology task force that the licence period for Internet service providers be extended to between 15 and 20 years instead of the proposed 10 years. The task force has been holding meetings with TRAI to discuss changes to be introduced in telecom regulations.

During the meetings, which started last week, TRAI said it was against geographical categorisation for Internet service providers and the performance bank guarantees proposed by the department of telecommunications (DoT).

These changes are expected to be incorporated in the licence agreement for Internet service providers soon.

The department had drawn up three categories of licences for Internet service providers: Tier A providers will have the whole of India as licensed areas of operations, for whom the bank guarantee proposed is Rs 2 crore; Tier B, comprising 20 territorial circles and four metropolitan cities, carries a Rs 20 lakh bank guarantee; and Tier C, with a licence area equivalent to a secondary switching area of DoT, carries a bank guarantee of Rs 3 lakh.

TRAI suggested that instead of performance bank guarantees other modalities should be worked out so as not have entry barriers for Internet service providers. The rapid spread of cable television in the country _ from zero in the late Eighties to over 17 million households at present _ was cited as an example. Cable TV operators have no licensing requirements or area restrictions. The telecom regulator also suggested that a separate body be established for orderly development of domain names.

Also, it pointed out the need to have domestic Internet switching equipment for subscribers accessing local websites. At present, most Internet trafficgoes to the US and comes back to India to access domestic websites.

The meetings with TRAI are being held in preparation for the task force's second report to be submitted in October. The team, which submitted its first report on July 4, held discussions with experts in Hyderabad, Chennai and Calcutta. The Union cabinet on July 24 cleared most of the 108 recommendations of the first report, paving the way for easy entry of Internet service providers. The report also contained several incentives for information technology companies.