Internet - Government, Companies And People

Internet - Government, Companies And People

Dr. T. H. Chowdary
Monday, May 14, 2001

One of the most progressive, non-controversial, technology-neutral, competition-promoting, people-beneficent policy that Government of India has ever promulgated is the one with respect to the Internet. Immediately after its victory, in 1998, the BJP-led government constituted a National Task Force on information technology and this Task Force crafted an Internet policy as part of the national IT policy. The Task Force made recommendations within 90 days of its appointment and the Government accepted the first such containing the Internet policy within the next 60 days. Such swift decision making is unprecedented. One of the wisest things was that the monopolist incumbents viz. DoT and VSNL were not included in this Task Force although, they were involved in the consultation process. That is why the Internet policy is the most people friendly. The DoT was very much opposed to sweeping liberalisation measures that the Task Force and the Government were seeking to put in place. The Chief elements of the world-wide acclaimed policy are:
- There is no license fee. There is no entrance fee. There is no revenue share. All these are burdensome impositions on private telecom companies that intend to enter this sector.
- Any Indian enterprise could become an Internet Service Provider (ISP) in one city, many cities, one state, many states or the entire territory of India. There is no limit on the number of licenses a company can hold.
- The ISPs can connect customers to their Points of Presence (PoP) by either deploying wireless on their own or through cable T.V's infrastructure or leasing circuits from whosoever has got capacity (the DoT and the basic telephone private companies).
- ISPs can set up their own Internet gateways to connect to global Internet backbones using either communication satellites and earth stations of their own or leasing them from whosoever can provide. They can connect to any submarine cable capacity available in the coastal cities of India.
- The ISP may also construct transmission capacity to inter-link the cities and states where they provide Internet services and connect them to their own international gateways.
- Utilities like Railways, GAIL, Power Grid Corporation, State Electricity Boards can also build up transmission capacity through optical fiber cables and lease either the dark fibers or the bandwidth to Internet Service Providers.

Later on, Government further improved the policy by allowing Internet service companies to provide other services like electronic commerce, E-business, E-education and so on. The DoT officials wanted to oppose many of these provisions but the then Communications Minister, Smt. Sushma Swaraj over-ruled all the objections when her attention was drawn by some of the members of the Task Force to the relevant provisions in the election manifesto of the BJP in this regard. The monopoly of the VSNL over the provision of Internet by itself in the cities where it has gateways and through the DoT where it has no gateways was thus abolished. The DoT was, however, apprehensive that the Internet users would be able to have telephone conversations from their PCs on the Internet and it would constitute a serious threat to its domestic long distance revenues and VSNL's Internet revenues. Therefore, it insisted upon the provision in the license to the effect that the ISPs would not allow voice over the Internet. This is just like the DOT's licenses for VSAT based, closed user group data networks wherein a limit of 64 kpbs was imposed in the fond hope that at lesser speeds, there could be no telephony. Powerful digital comparison technologies need no more than 9.6 kbps for telephony. The ban still continues although country after country are permitting voice over the Internet. That is benefitting millions of customers for their domestic long distance and international calls for which they are now paying a fraction (about a tenth) of what they were paying to the traditional public switched telephone network (PSTN) operators (like BSNL, VSNL etc).

Government's Internet Service Policy (ISP) is in great contrast to the various telecom policies. The telecom service licenses are fragmented - city wise, state wise, local, and intra-state service; inter-state service; mobile service within a state; inter-state mobile service; limited mobility within cities; domestic long distance. Intra-state; domestic long distance inter-state; international; voice; data; email; VSAT; trunked mobile radio and so on with many restrictive adjectives.

It is this fragmentation of what is essentially information service that is one from technology point of view into various licenses, although, all of them can progressively be provided over one single network as new technologies are becoming available that is the root cause of incessant disputes and periodical revisions of the Telecom Policy (NTP 94, NTP 99 and NTP 2001 in the offing), and the super-session and reconstitution of the regulator and fragmentation of regulation we have Telecom Regulatory Authority (TRAI) 1997, TRAI 2000, a TDSAT 2000 and we are going to have a new comprehensive regulator, ICE 2001 before the end of this year. Another anti-people feature of the telecom license is that unlike for the ISPs, is the imposition of license fees, entry fees, revenue shares, R&D cess etc. The money so realised is not utilised for development of telecommunications. The National Telecom Policy's professed goal is to make telecoms and telephones available to ever more non-affluent sections of the population of this country; but these extraneous burdens add to the price and so make the services less affordable. Constituting tens of thousands of crores of rupees, these impositions on the telecom service are external to the provision of service; they are being used as budgetary resources. Because of these costs, the rental and call charges for telephones have been increased. In other words, the license-permit-quota mentality for four and half decades of socialism in this country is still infesting the process of liberalisation itself. It is the international and long distance and leased circuit charges we have seen reductions and it is because they were priced by the monopoly 5 to 8 times higher than the costs. A comparison of the outcomes of the wonderful ISP policy and the license-quota-permit mentality designed telecom licenses is worth noting:

Within three years of the wonderful Internet policy, the number of Internet customers has increased 5-fold; the charges for the use of the Internet have come down to 1/5th of monopoly rates. The trend is still continuing. In the case of telecoms, rental rates have gone up both for the mobile and fixed services, local call charges have gone up in the sense that the call is charged every 3 minutes instead of 5 minutes before the liberalisation and competition. There are no disputes in regard to the ISP enterprises and others whereas there is not an area, there is not an interpretation, not a license that is not disputed in regard to the telecom licenses.

The reason for the Internet policy becoming people-friendly is mainly due to the members of the Task Force presenting it as an instrument for human resource development just like education. It is not an object of commerce and therefore, it should not be viewed as a revenue generator to Government. If only our telecom liberalisation was also viewed in this light namely, that it enables people to communicate, promote, businesses and make Indian businesses and individuals competitive, then a wise Government would not have imposed the external costs.

A great feature of the Internet policy is Government wanted it to be rolled out quickly and that it should be least costly for the user and it should be available all over the territory of India. As roll-out takes time and during that period, for remote users to gain access to the Internet could mean paying STD charges for the use of telephone to connect to the Internet, Government took the most liberal decision to treat every call from an Internet user to the nearest Internet Service Provider as a local call whatever be the distance, whether 15 kilometers or 1000 kilometers. This has no parallel anywhere in the world. It is another matter that as private ISPs established their Points of Presence in more and more places, the give-away from the BSNL/DoT becomes less and less but that does not hurt the customer at all. One point of dispute is private ISPs were the first to set up their Points of Presence (PoP) in many towns. They have given connections to distant customers who dial-up the Internet service provider paying local call charges. Now, that the BSNL (corporatised DoT) is also providing Internet service, it is putting its PoPs in many places, the BSNL is saying that dial-up access to private ISPs will not be treated as local call but only as STD call. It will give the local call charge facility only if the customer uses its Internet service. The BSNL can use this local call charge weapon for long distance dial-up users to wean them away from its rival private companies.

The BSNL in order to encourage the use of Internet in rural areas is giving two concessions. (1) There are no charges for Internet use at all. From private ISPs they could be from about Rs.15/- to Rs.40/- per hour. (2) It is giving 25 per cent rebate on the dial up call charges i.e. instead of charging Rs.1.20 for every three minutes of use, it is charging only 90 paise. Both these concessions are social service oriented and are commendable.

One thing which hurts customers in urban areas is the charge of Rs.1.20 for every 3 minutes of Internet just like for telephone call. An hour's Internet usage may cost anything from Rs.12/- to Rs.15/- from the private companies and possibly from the VSNL and the BSNL and the MTNl, all three Government companies, but the customer will be paying for one hour - 21 units i.e. over Rs.25/- per hour. This is really too high and is totally unwarranted. Most of the Internet traffic is not in the telephone busy hour of 1030 to 1130 in the morning but very early in the morning at about 5 'o clock or late in the evening after about 2000 hours. During these periods, every extra call on the network costs almost zero. The DoT's companies and the private basic telephone operators are also charging over Rs.25/- per hour. The Internet users, the TRAI and the Government must prevail upon the basic service providers, be they Government companies or privates to reduce this charge to about half of the Internet usage charge per hour or one unit for every 15 minutes.

The Internet service providers are bringing extra traffic to the basic service providers (BSNL, MTNL and the private telephone companies) because of the dialup access to the Internet. Normally businesses reward those who bring traffic or customers. For example, insurance agents get a commission for the insurance they sell. Enlightened telecom companies in countries like the UK are sharing the dial up access revenue between themselves and the Internet Service providers. This is not happening in India. Just like ISPs, Radio Paging Companies are also bringing huge number of short duration paging calls to the BSNL. No paging call lasts for more than a minute at the most and yet the DoTs companies charge Rs.1.20 for the call. Radio Paging companies have been requesting the basic service providers like the BSNL to share the revenue with them. The BSNL does not. The BSNL is carrying calls for services like cine-chat and astrology provided by private companies. These are charged one unit every 2 seconds (Rs 36 per minute) and that revenue is shared between the BSNL and the cine-chat and astrology etc. service providers. The principle of sharing the revenue between the service provider and the access provider is what is demanded by the Internet and Radio Paging companies. The demand is just and should be conceded.

Internet Service Providers are spread all over the city. The Point of Presence of an ISP is in one locality in the city. Over 90 per cent of the Internet users dial up a number and connect to the ISP. The inter-connection between the PoP and the customer should at as many exchanges as possible so that the calls are least congested and most secure. Secondly, the cost to the ISP for the inter-connection between its PoP and the exchange could be crippling if the inter-connection is provided from an arbitrarily chosen exchange by the BSNL or other basic service providers. For example, in Hyderabad, there are over 60 telephone exchange buildings. A private ISP has one point of presence. For calls to be more secure, it should be connected to almost ever exchange. As a second best, the PoP should be connected to every transit/tandom exchange of the telephone system. Such exchanges are 4 or 5 and are strategically situated through out a city area.

Competition is altering the number of Internet users for every company. They request for additional inter-connection capacity which could vary over time. If the inter-connection is not provided in sufficient quantity, from the desired number of exchanges, then the ISP will suffer. This is becoming very contentious between the BSNL and the private ISPs. The BSNL holds the bottleneck facility of providing access to private ISPs. It is in competition with the private companies for the same service. Usually, this is not allowed in most of the countries. The bottleneck facility holder is asked to set up a subsidiary company for competitively provided the services. There should be tariff for inter-connections and access and the same tariffs and inter-connection rules should apply non-discriminatorily for the bottleneck holder company's subsidiary and its rivals. The sooner such a situation is edicted by the TRAI, the better. In several countries, crusaded by the International Telecom Users Group (INTUG) as well as the competitors to the incumbent, the regulators are ruling that there should be a separate company for competitively provided service by the bottleneck holder.

The Internet is wanted not just for sending mails but for several applications needing borad-band. This high speed connectivity cannot be provided by the telephone cables of the incumbent. By putting digital subscriber loop (DSL) equipment on existing telephone cable connections, the bandwidth can be enormously increased. Such an equipment could be put either by BSNL or by private companies in competition with the BSNL. In India, the BSNL does not allow its copper pairs to be utilised for the broad-band by its rival. This is unjust. Elsewhere in the world, the regulators are rolling upon in-binding i.e. the incumbent company like the BSNL must allow its copper pair to be used for broad-band connectivity by equipping the leased pairs with the DSL equipment. The BSNL itself should obtain sufficient quantities of DSL equipments and gain competitive advantage over its private company rivals. That would be in the interest of broadband-requiring Internet users.

The most important requirement for society is that Internet must not be confined to cities but taken to all the rural areas just as we have been taking telephones. It is not that rural people can afford private subscriptions. We should provide community access just as STD/ISD public telephones in almost every street of urban areas and at least one in every village are providing. We should have at least one Internet kiosk for public use and in each village many in the cities. Luckily as it is a paying proposition, private companies and individuals are coming up in hundreds to put Internet kiosks for public use in urban areas. It is in the villages just, like public telephones, we should have a policy for placing and operating public Internet Kiosks. Where private sector is not going, Government companies should go and whatever deficits, they are incurring must be reimbursed from the Universal Access Fund created by a levy on the revenues of all telecom Companies. We must have Internet in every classroom of every school and college and every primary health center. All this costs money and there may not be commensurate revenues. But since Internet is good for schools as it would equalise the opportunities as between rural and urban schools and rural primary health centers and hospitals in urban areas, it is socially desirable that we have subsidised Internet in schools, rural areas and libraries, Universal Access Fund. Presently Government is levying on license private telephone companies, in addition to the entry fees and revenue share. Public should demand that the entry fees and revenue shares be merged into one Universal Access Fund at 10 per cent. It is this revenue that should be utilised solely for extending telephones to villages as well as for putting Internet kiosks and in villages Internet connections in all classrooms of schools and colleges and in the primary health centers. Currently telecom revenues are about Rs.30,000 crores and 10 % of it would amount to Rs.3,000/- crores. It is an increasing amount year after year and within 5 years it should be possible for us to put public telephones as well as Internet kiosks in all the villages, in all the schools and in all the primary health centers. This is what representatives of people in the legislatures and in the Parliament should ask for. This is what political parties should insist upon so that Internet and information technology which greatly enhance the human capability and confer an advantage for economic and business activity, is not be confined to the rich and the urban areas but will serve rural and common people. This is the right way for narrowing the digital divide, i.e., the information and wealth-haves and the rest.

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