Internet providers oppose Trai proposal on SUC

It is not clear which revenue [SUC] will be linked to...revenue derived from that spectrum or the entire revenue: Rajesh Chharia

Terming any move to link spectrum usage charge (SUC) to the revenue as "disastrous", the ISP Association of India on Sunday said it plans to approach Telecom Minister Manoj Sinha and the telecom secretary to express concerns over the latest consultation paper by the sector regulator.

The Telecom Regulatory Authority of India (Trai), last week, sought public feedback on levying SUC linked to annual revenues for internet service providers (ISPs), similar to norms for mobile companies.

The move could potentially push up broadband costs for consumers as ISPs currently pay "formula-based spectrum charges".

According to Rajesh Chharia, president of the ISP Association of India (ISPAI), the formula-based spectrum charges work out to Rs 7.2 lakh for six MHz spectrum a one year.

"We are opposed to Trai's proposal. It is not clear which revenue [SUC] will be linked to...revenue derived from that spectrum or the entire revenue, which also involves our optical fibre backbone. SUC should not be linked to our entire revenue" Chharia said.

At present, service providers with Cellular Mobile Telephone Services and Unified Access Service Licence are assigned spectrum through market-based mechanism (auctions). They pay SUC as a percentage of gross revenue, called AGR.

"However, there are certain categories of telecom/ broadcast licensees to whom spectrum is assigned administratively, and SUC is based on a formula. ISPs are among such licensees... present criterion of spectrum allocation to ISPs is city-wise, subject to availability of spectrum," Trai noted in the consultation paper.

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".

"We have had a meeting of office-bearers of ISPAI on the issue. It is our view that the present system should not be disturbed, when things are moving smoothly...otherwise it will be disastrous," Chharia said.

Chharia pointed out that spectrum is being used as the last-mile access, where optical fibre does not reach, to connect people.

"So, any additional charge on spectrum will lead to a hike in the cost of service and will have an adverse impact on Internet proliferation in rural areas," he added.

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