In a move that would hit broadband users of smaller internet service providers (ISP), the Telecom Regulatory Authority of India (TRAI) has started a debate on whether to impose spectrum usage charge on ISPs which operate on airwaves allocated administratively.

Currently, ISPs pay a flat fee of around ₹3.5 lakh per year for using 5MHz of spectrum. If TRAI imposes usage charges, the operators will have to cough up a fee based on their annual revenues.

This would mean players such as YOU Broadband, Siti and Hathway would have to pay a higher fee for using spectrum. Until now, specturm usage charge had been imposed only on telecom companies, which got spectrum either bundled through the licence or through an auction.

“We will oppose the TRAI move because if an SUC is imposed, it will be disastrous for the Internet industry. It will kill the small ISPs who are connecting Tier 2 and 3 cities and rural areas. The TRAI paper goes against the idea of connecting the last Indian,” said Rajesh Chharia, who represents the Internet Service Providers Association of India.

The bigger telecom operators are, however, likely to support the proposal to collect SUC from ISPs. “ISPs have so far had a playing field in their favour with lower regulatory fees. If ISPs are competing with the bigger telecom operators for the same broadband market, the service conditions have to be the same to avoid any advantage,” said an industry representative. TRAI, meanwhile, has sought inputs from stakeholders on the issue through a consultation paper. The paper raises specific issues for consideration of stakeholders such as rates of SUC based on adjusted gross revenue (AGR) for ISP licensee, minimum AGR for ISP licensee and allied issues such as schedule of payment, charging of interest, penalty and other related issues.

TRAI has asked for written comments on the issues raised in the consultation paper from stakeholders by September 19 and the counter comments by October 3.

Separately, TRAI has also permitted ‘Special Data Vouchers’ with longer validity of one year (365 days) from the existing limit of three months (90 days).

The present regulatory regime allows Telecom Service Providers to offer data services in the form of Special Tariff Voucher (STV) either exclusively or in combination with other tariff items with a maximum permitted validity of 90 days.

“Requests were received in TRAI seeking longer validity for data-packs (Special Tariff Vouchers with only data benefits) primarily to address the concern of marginal consumers of wireless internet who prefer lower denomination data packs with longer validity,” it said.

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