The Internet Service Providers Association of India (ISPAI) is constrained to observe that the draft notice inviting tender (NIT), released recently by the USOF is likely to oust major internet service providers with over 12 years experience in providing wireless broadband services in favor of those who may have lesser experience, but have opted to renew/amend their ISP licenses as per the 2007 guidelines.
In addition, the very basic eligibility criteria of minimum five years experience disqualify even those ISP?s having license on or after August 2007, which becomes a mockery of the so called draft tender.
This exclusion has frustrated the legitimate business expectations of ailing category C ISPs? (already operating in tier II cities and small towns near rural areas), besides ISPs in category A and B.
Further, it is to be noted here that ISPs are present in almost every small town and city, have small overhead costs in its operation but strong local hold. Further, since ISPs are paying 6 per cent AGR on internet telephony since 2006, their contribution should yield a quid pro quo benefit from the DoT / USOF.
To summarize, the association finds the following conditions restrictive in the draft NIT, which are against the interest of the ISPs? for the reasons mentioned below each:
1. Fair competition amongst bidding players leading to lower prices and better quality of service for the rural customer is barred due to restriction of license conditions thereby eliminating major ISPs
2. There is hardly any justification of this ?mandatory reservation? for BSNL, (largest ISP with a market share of over 59 per cent), at the cost of other smaller players.
3. This reservation in favor of BSNL is also likely to be viewed as an ?abuse of dominance? by BSNL as being a 100 per cent subsidiary of DoT which is likely to result in ?denial of market access? to Category C ISPs?, besides category A and B, as well as an attempt by BSNL to enter the other market for broadband services ?may attract violation of Section 4 of the Competition Act, 2002.
? Elimination of ISPs as per above is per se discriminatory and irrational.
? The restriction with such foreclosure of otherwise capable players may be seen as anti competitive conduct by the Competition Commission of India.
? The restriction is clearly not related to the capacity of the excluded categories ISPs? to provide services for broadband services in rural areas and violates the CVC guidelines on Prequalification Criteria & Unfair Tender Conditions dated 2002 (www.cvc.nic.in/seven.pdf)
ISPAI would like to draw the attention of the USFO to TRAI?s Recommendations to DOT on National Broadband Plan dated May 4, 2011 in which TRAI, in Annexure ?E? of the said Recommendations stated as under:
? ?DOT would need to consider whether the Public Sector Undertaking, given its autonomous status, can be controlled in terms of decisions and supervision by the HLC or USO fund. The possibility of severe criticism in this regard is to be considered.
? BSNL is currently one of the service providers.
? If it is the executing agency including the maintenance of the network, there is a serious problem of the lack of level playing field viz-a-viz other service providers.
? This would be critical since the optic fiber network is envisaged as providing non-discriminatory access.
? There is a serious risk of anti-competitive behavior setting into the network management.
? In the light of the above, the DoT would be well advised to review its proposal to make BSNL the executing agency.
? It would be worthwhile setting up a special purpose vehicle for execution of the program.?
In addition, the association also feels that the minimum bidding area should be changed to District instead of the telecom circles at state level to enable ISP belonging to ?C? category to be eligible to participate in the tender.
The association, therefore, requests to review the restrictions proposed to be imposed on ISPs in the draft Tender Document/ NIT for the rural wireless broadband scheme in the specified rural and remote areas and remove them in the interest of equity, good conscience, fair play and transparency.
It may be noted that in case the restrictions are not removed from the draft NIT, none of the ISPs? will be eligible, thereby leaving the huge majority of 156 operating ISPs in India, which will cause strong resentment in our members.
