wordpress blog stats
Connect with us

Hi, what are you looking for?

Updated: ISPAI Contests 8% License Fee On ISPs At TDSAT

Update: Download a copy of the notification here.

July 9th 2012: The Internet Service Providers Association of India (ISPAI) has approached the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), challenging the Indian Government’s decision to levy a 4% license fee on ISPs’ gross annual revenues, starting 1st July 2012.  The government had earlier announced that it plans to increase the fee to 8% by April 2013, in two yearly steps. At present, no license fee is charged from ISPs.

In a media statement, the ISPAI has pointed out the following issues:

– Cascading Effect: The fee will have a cascading impact and will lead to a 25% to 60% increase in cost, depending on the ISP.

– Telco Revenue Share Issues: The government was penalizing the ISPs due to its own failure to audit telecom operators’ differential revenue share payable by them against their multiple licenses, leading to the alleged underreporting of revenue.

Advertisement. Scroll to continue reading.

– Against NTP 2012: It said that the move was against the main objective and spirit of National Telecom Policy 2012 which mentions “affordable and on demand Internet/Broadband connection to citizens of India”  and that it will remove competition by killing 90% of ISPs serving to niche smaller town and rural areas, making it a service for the privileged.

– Make Tariff Unafforable: The association stressed that the main thrust of the government was for Rural Broadband penetration, and Rural masses find the present tariffs non affordable. So the new levies would further harm the prospect of rural internet penetration.

– Penalising ISPs versus Telcos: the new fee was a penalty for the ISP segment (whose revenue is at Rs 7500 Crores as per TRAI) while it’s more of a reward to Other operators by leaving IP 1 sector (revenue at Rs 25000 crores as per TRAI) without imposing any levies, while TRAI advised levies to both sectors for level playing field and in NTP recommendation.

DoT’s note on levying a license fee on ISPs: According to a recent report by Livemint, which claims to have access to an internal DoT note, the government plans to levy a license fee equal to 4% of the ISP’s AGR (adjusted gross revenue) for the period between 1 July 2012, and 31 March 2013, which is a change from the present scenario where ISPs don’t pay a license fee.

ISPs with VoIP: The government also intends to levy a license fee equivalent to 7% of AGR on ISPs that offer Internet Telephony. Such ISPs pay a license fee of 6%, at the moment, and the plan is to charge 8% of AGR as license fee from both starting April 2012. As per the report, the  AGR will include all revenue from Internet services excluding revenues that don’t accrue to the company, like pass-through charges that go to another company, and taxes.

This is a departure from the TRAI’s recommendations on ISP license fee in 2007, that recommended an entry license fee of Rs. 20 lakhs for category A ISPs, and Rs. 10 lakhs for Category B ISPs.

Advertisement. Scroll to continue reading.

Our Take (Nikhil adds)

If you look at the bigger picture, some entities like Reliance Industries, which got spectrum during the BWA auctions, have an ISP license, and hence are taxed differently from telecom operators who also offer ISP services. There is also a difference between the fee that telcos are charged, and ISPs offering VoIP are charged. This approach towards trying to bring in uniform license fees is a move to bring parity between two converging segments. It’s another thing that ISPs are smaller and given the issues they face with right of way, cannot afford to pay 8% of AGR as license fees, but with cost of right of way access doesn’t impact wireless ISPs.

Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.

News

In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...

News

By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

News

By Stella Joseph, Prakhil Mishra, and Yash Desai The Government of India circulated proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules”) which...

News

By Rahul Rai and Shruti Aji Murali A little less than a year since their release, the Consumer Protection (E-commerce) Rules, 2020 is being amended....

You May Also Like

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ