SC issues notice to ISPs on DoT petition

The Supreme Court today issued notice to the Association of Internet Service Providers (ISPs) and 16 other organisations on a petition filed by the government challenging the telecom tribunal’s ruling relating to an internet service provider’s income.

A Bench headed by Justice Dalveer Bhandari issued notice to the Internet Service Providers Association of India and 16 other organisation including CJ Online, DELDSL Internet, EXATT Technology, ESTEL Communication, Hathway Cable & Datacom, ICENET.NET Ltd, Netmagic Solutions, Primus Telecommunications, Reach Network India, and Tulip IT Services.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had held that income from dividend and interest on savings, capital gains as well as benefits from foreign exchange should not be part of the adjusted gross revenue (AGR) of an ISP.

 

The TDSAT’s ruling in August 2007 had excluded these from the companies’ AGR for the purpose of calculating licence fee to the government.

Earlier, the apex court had issued notice to the Cellular Operators Association of India on a similar petition. It had also ordered that no adjustments should be made.

The Department of Telecommunications (DoT), while seeking a stay on the tribunal’s order, said that under the National Telecom Policy, ISPs (with Internet Telephony) have to pay 6 per cent of adjusted gross revenue.

However, it had included the income from telecom handsets given to subscribers bundled with their services in AGR in calculating licence fee.

Besides, the income earned from property rent, and sale or lease of telecom towers and dark fibre line was included in cellular operators’ AGR.

Additional Solicitor General Amarender Saran questioned whether “the TDSAT has (the) jurisdiction to rewrite the terms and conditions of licence and whether the expressions gross revenue and AGR, which have been clearly defined in the Licence Agreement, could be allowed to be changed ...”

Stating that the tribunal ruling was wrong, the DoT said that the TDSAT had failed to appreciate that the migration package provided to ISPs provided for the definition of gross revenue and AGR and the definition was an integral part of the migration package.

The tribunal had passed the order after the ISPs had sought a direction that the increase of licence fee from one rupee to an additional 6 per cent of AGR of ISPs (with Internet Telephony) was illegal, arbitrary, unreasonable and violative of Section 11 of the Trai Act.