ISPs set for shakeout after new policy

A new set of policy guidelines for Internet service providers (ISPs) announced by the government at the weekend echoes regulatory recommendations, but has left a sour taste in the mouth for ISPs who feel dwarfed by what they believe is a regime that would tilt the balance against them. From all indications, players who remained after a mushrooming during the Internet bubble of the late 1990s are headed for a shakeout.

The new policy, which replaces the one announced in 1998 that eased up licensing, seeks to do away with the Category C ISPs focused on localised district-level operations and also makes it mandatory for idle licences to be surrendered.

It also does nothing about the demand for ISPs to allow incoming calls under Internet telephony. “The new policy that replaces the ISP policy intends to consolidate the ISPs in India” said Rajesh Chharia, president of the Internet Service Providers Association of India (ISPAI).

The Department of Telecommunication’s (DoT) recommendations were announced on Saturday, and reflect the recommendations of the Telecom Regulatory Authority of India (TRAI). The policy has also accepted TRAIs recommendation that foreign companies providing voice-based messenger services should be brought under local regulation and asked to register themselves in India. Foreign direct investment (FDI) of up to 74 per cent is permitted in ISPs.

It permits IP Telephony subject to broadcast content regulations and also holds ISPs accountable for objectionable content on their network.

“Flow of obscene, objectionable, unauthorised or any other content infringing copy-rights, intellectual property right and international and domestic cyber laws in any form over the ISPs network is not permitted and the ISP is supposed to take such measures as to prevent it. Any damages/claim arising out of default on the part of the licencee in this respect shall be the sole responsibility of the licencee,” DoT said in its guidelines.

The new policy will do away the need for a separate licence for Internet Service Providers and Internet Telephony Service Providers, and will combine the service of both under the same licence.