Net telephony stays free as law ministry rejects Trai proposal

Rishi Raj

Posted: Monday, Feb 11, 2008 at 0016 hrs IST
Updated: Monday, Feb 11, 2008 at 0034 hrs IST


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New Delhi, Feb 10: You can keep using the likes of Skype, Yahoo and MSN to make free international calls as the law ministry has rejected a Telecom Regulatory Authority of India (Trai) proposal that foreign Internet telephony firms be made to register in India, seek permission from the department of telecommunications (DoT) and host their websites in the country.

Trai’s proposal last year was aimed at bringing these companies in the ambit of the country’s licensing framework and monitoring their activities. These recommendations were guided by the fact that foreign Internet firms did not pay any licence fee to the government like the licensed Internet service providers (ISPs) do.

The DoT subsequently sought the law ministry’s opinion whether mere registration could bring such companies under a licensing framework provided by the Indian Telegraph Act, 1885. The DoT had asked whether overseas companies could be subjected to Indian laws for various purposes, including the licence fee.

According to sources, the law ministry had said registration of any company was not envisaged by the Indian Telegraph Act for operating telecom services.

Sources listed reasons why this could not be done. First, the statute does not envisage registration for the purpose of bringing such companies within a licensing framework as the regulation provides for only a grant of licence with certain riders. Second, these Internet firms are governed by Companies Acts in their respective countries. Indian laws are not applicable to such companies and, therefore, no action can be taken under the provisions of the Company’s Act of India, 1956. Third, such companies are foreign entities and have invested 100%. But the present guidelines say Internet and Internet telephony companies can have 74% FDI. So, the proposed move will not be in consonance with the norms.

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