In yet another instance highlighting the growing rift between them, the department of telecommunications (DoT) has shot down a Telecom Regulatory Authority of India (Trai) recommendation on levying a licence fee on Internet service providers (ISPs) offering pure access services. While turning down Trai?s proposal, a DoT internal note cited a Cabinet decision of 1998, which, the department says, cannot be revoked.
Last year, Trai had recommended a licence fee of 6% of the adjusted gross revenue on all ISPs, including revenue earned from providing
Internet access. While DoT accepted the recommendation and levied a licence fee on Internet telephony and other allied services like IPTV, as well as the sale or lease of bandwidth, it exempted pure Internet access services.
?While accepting the recommendations of the task force on Internet in 1998, it was decided at Cabinet level that for setting up of ISP operations by companies, there shall be no licence fee for (the) first five years and after five years, a nominal fee of Re 1 will be charged,? DoT has said in a note.
DoT claims that subsequent to the decision, revenues from Internet access have been excluded when making adjusted gross revenue calculations for licence fees. The department, therefore, decided it would not review the Cabinet decision, despite Trai?s recent communication urging a reconsideration to avoid revenue losses due to the bundling of services by ISPs.
This is just the latest in several instances of DoT partially accepting, rejecting or delaying Trai recommendations.