Announcing this at the three-day ISP India '99 conference here on Wednesday, DoT deputy director general N Parmeswaran said that NIB would be extended to the entire country by January 26, 2000, to achieve the Centre's goal of Internet for all.

NIB will have a three-tier architecture. NIB's proposed Internet stations for A type locations will include Bangalore, Calcutta, Chennai, Pune, Delhi, Mumbai (with international gateway), Ahmedabad, Bhopal, Ernakulam, Hyderabad, Jaipur, Jalunder, Kanpur and Patna (without international gateway). In all, 31 locations will be included for the NIB Internet stations for B type locations. There will be five stations for the C type locations.

VSNL chairman and managing director Amitabh Kumar said that the proposed NIB will segregate Internet traffic. It will therefore not overload the telephone network. NIB will facilitate efficient intra-country connectivity and ISPs can serve the country from a single location.

Parmeswaran strongly defended the Centre's Internet Service Providers' policy announced in November last year and said that it was most liberal, allowing 49 per cent foreign equity participation.

DoT has already issued ISP licences to 50 companies which include nine for all India, 15 for B category (major cities) and 26 for C category (small towns).

He said that the ISPs are free to fix tariffs based on the guidelines to be stipulated by the Telecom Regulatory Authority of India (Trai). Similarly, quality of service will also be the domain of the Trai. Parmeswaran said that the sources for transmission links for ISPs will be DoT, licenced basic service operators, railways, state electricity boards, and the National Power Grid Corporation. ISPs can establish their own links if they are not available with these sources. Moreover, interconnection of ISPs has been permitted.

Kumar said that ISPs will have to settle financial issues related to bank guarantees, cost of domestic links, national backbone costs, international gateway and cost of international links. VSNL has reduced the average port charges for 2 mbps per month from $36,000 in 1995 to $27,000 in 1996 and $18,000 in 1997. Kumar said that VSNL will soon float a subsidiary, VSNL Seamless Services Ltd, to hive off value-added services. This will create a level playing field for new ISPs.

He said that ISPs will choose fibre connectivity instead of satellite, as it provides lenancy greater than 500 ms. Fibre connectivity will be a primary medium as new generation IP (IP 6) will be difficult to use via satellite. Ajit Balkrishnan of Rediff On The Net shared Kumar's views and said that fibre will be best for connectivity for ISPs. He said that cable operators will not pose a threat to the ISPs as Internet applications are different from TV content and users do not need the heavy bandwidth.

Balkrishnan said that the ISP business has no economies of scale and a start-up ISP with 1,000 customers can compete easily with a national operator with 20,000 customers. A small ISP can start its business with capital expenditure of Rs 25 lakh with 400 square feet space, two full-time staff and 10 installations.

He said that adding content to the ISP site will be the key to retaining customers. In addition, call completion rate, line stability and appropriate pricing will be responsible for customer retention. He suggested that ISPs should carefully choose technology, use open source software, GID hardware and local peering.

ISP Association of India chairman R Ramraj stressed the need for removal of certain anomalies related to alternative gateways. He also called for a level playing field for ISPs and added that Internet for everyone can happen if all make money.