The finance ministry is right when it objects to the proposed R20,000 crore national optic fibre broadband network being implemented by the state-owned BSNL. Instead, it has said, there must be an SPV set up with both private and public sector firms in it, and the SPV must execute the project through competitive bidding. Hopefully, the telecom ministry, which floated the original proposal, will see sense in the suggestion?in the past, such as during A Raja?s tenure, suggestions by the finance ministry were given the short shrift.
Why the finance ministry does not want BSNL to be the agency to set up the network to connect all panchayats to broadband is simple. BSNL is also one of the operators providing broadband services. The idea behind setting up the network is that all operators?private as well as public?use the network for the spread of broadband in the country. If the agency setting up the network happens to be one of the operators, this causes a conflict of interest. While the telecom ministry is in favour of setting up an SPV to manage the project after the network has been rolled out, the finance ministry has done well to object to this as well. For one, there is nothing to suggest that BSNL is the most efficient of all firms. Two, since the project is being funded by the Universal Service Obligation Fund (USOF), to which all operators contribute equally, there is no reason why BSNL should get the contract just because the government decides.
The problem with starting out by giving the project to BSNL is that there is no guarantee as to what will happen to it later. After all, though BSNL was set up with public funds, it is primarily responsible for the poor growth of broadband in the country. BSNL has last mile connectivity to houses/offices across the country but has refused to share this, for a fee, with other service providers?nor, at the same time, was it able to roll out sufficient broadband Internet capacity on these lines. Private operators who had to set up their own last mile networks have, naturally, been slow about it and concentrated on more dense urban pockets. There?s little point repeating the same mistake again.