The Telecom Regulatory Authority of India (TRAI) has released a consultation paper on, ?Amendment in the ISP Licence Agreement for incorporating the terms and conditions mentioned in the notice inviting applications dated February 25, 2010, for use of Broadband Wireless Access (BWA) spectrum.?

Prior to this, the Department of Telecommunications (DoT) had asked TRAI to frame recommendations pertaining to amendments in the ISP Licence Agreement.

DoT had specified that the terms and conditions mentioned in the notice inviting applications (NIA) dated February 25, 2010, ought to be incorporated. This document had identified guidelines for using Broadband Wireless Access (BWA) spectrum and the licence comditions that ought to be included in the licence agreements of internet service providers (ISPs).

Prior to this, DoT had auctioned BWA spectrum in 2010 as per the terms and conditions mentioned in the NIA.

Meanwhile, TRAI has asked all industry stakeholders to comment on whether all the terms and conditions related to licence conditions specified in the NIA ought to be incorporated in the licence agreements of ISPs, who bagged BWA spectrum in the 2010 auctions.

The regulator has asked all stakeholders to respond by March 26, 2012.

The issues under scrutiny include:

Roll-out obligations for BWA Spectrum

Metro service area

The licensee to whom the spectrum is assigned will have to provide the required street level coverage using the BWA spectrum in at least 90 per cent of the service area within five years of the effective date.

Category A, B and C service areas

The licensee to whom the spectrum is assigned shall ensure that at least 50 per cent of the rural SDCAs are covered within five years of the effective date using the BWA Spectrum.

Coverage of a rural SDCA would mean that at least 90 per cent of the area bound by the municipal/ local body limits should get the required street level coverage.

The effective date will be defined as when the right to use the awarded spectrum commercially commences and the date when the UAS licence or the ISP category A licence, if and as applicable, is granted to the operator.

If the licensee does not achieve their roll out obligations, their assigned spectrum shall be withdrawn.

Spectrum Usage charges

A spectrum usage charge (over and above the spectrum auction price and the applicable licence fees) as a percentage of the Adjusted Gross Revenue (AGR) shall be payable by the successful bidders as per the rules notified by the Government from time to time.

Licensees using BWA Spectrum need to pay 1 per cent of AGR from services using this spectrum as annual spectrum charge irrespective of the licence held by them. Such revenue would be required to be reported.

The following shall be considered while computing the annual spectrum charges:

Applicable AGR shall be computed in accordance with the provisions of the relevant service licence;

3G/ BWA spectrum to be assigned in the two auctions shall not be counted for calculating the slab of the total spectrum holding by a licensee for levy of spectrum usage charges;

Revenues from services using the BWA Spectrum shall not be included in the AGR of the licensee, for the limited purpose of determining spectrum charges on spectrum other than BWA spectrum;

Annual spectrum charges shall be applicable from the date of award of right to use allotted spectrum commercially. However, there shall be a moratorium of one year from this date on the payment of spectrum charges for the standalone 3G as well as stand-alone 3G + BWA operators (i.e. winners of 3G/BWA Spectrum who do not hold 2G spectrum);

For BWA Spectrum, no annual spectrum charge shall be payable in the first year from the date of award of right to use allotted spectrum commercially.

Duration

The right to use BWA spectrum shall be valid for 20 years from the effective date unless revoked or surrendered earlier, subject to the operator continuing to have a UAS/ CMTS/ ISP-category A licence. In case the UAS/ CMTS/ ISP-category A licence it holds is cancelled/ terminated for any reason, the spectrum usage rights shall stand withdrawn forthwith.

If the period of an existing UASL/ CMTS/ ISP-category A licence of an operator expires before the expiry of the right to use the BWA Spectrum awarded by means of the current Auction, then the validity of the UAS/ CMTS licence with respect to the BWA Spectrum, if applicable, shall be extended to 20 years from the effective date on existing terms without any commercial charges.

This extension shall be done on the application of the licensee made in the 19 year of the UAS/CMTS licence for extension of the period to make it co-terminus with the validity of the right to use the BWA Spectrum period.

The ISP licence, if applicable, shall be extended for five years at a time for a period extending up to 20 years, from the effective date on existing terms.

However, extension, if any, of the right to use any spectrum other than BWA Spectrum associated with the licence and the terms thereof, shall be specified in due course.?

Breach, revocation and surrender

The spectrum assignment may be revoked, withdrawn, varied or surrendered in accordance with applicable licence conditions or any other applicable laws, rules, regulations or other statutory provisions.

The spectrum assignment may also be revoked if the Government determines the user of the spectrum to be in serious breach of any of the conditions of the award of the spectrum (including adherence to the Auction Rules) and the consequent obligations.

In case of less serious breaches, the Government may impose penalties at its discretion.

Seriousness of the breach shall be determined by the Government at its sole discretion. In case neither the successful bidder nor any of its associated licensees has the relevant service licence for a service area where it has been declared a successful bidder, it must apply for, or otherwise acquire the relevant service licence in the service area in accordance with the terms of this Notice, within three months of it being declared a successful bidder, failing which the Government shall have the right to revoke the spectrum.

The operator may surrender the spectrum, by giving notice of at least 60 calendar days in advance. In that case, it shall also notify all its customers of consequential withdrawal of service by giving 30 calendar days notice to each of them. The operator shall pay all fees payable by it until the date on which the surrender of the spectrum becomes effective. The effective date of surrender of the spectrum shall be the later of the dates of expiry of the two notices mentioned in this clause.

If at any stage, the spectrum allocation is revoked, withdrawn, varied or surrendered, no refund will be made.