ISP Association Voices Concern Over Spectrum Usage Charges

Opposing Trai’s proposal of imposing SUC linked to revenue, the ISP Association of India today said it plans to approach telecom minister Manoj Sinha and also telecom secretary to express its concern over the latest consultation paper by the sector regulator.

“We are going to make a representation to the telecom minister and telecom secretary this week and seek a meeting with them to voice our concerns,” PTI report published in TOI quoted ISP Association of India (ISPAI) president, Rajesh Chharia as saying.

The sector regulator Trai, last week, sought public feedback on levying spectrum usage charges linked to annual revenues for internet service providers, something similar to the norms for mobile companies.

Also Read: Trai Proposes Stricter Quality Norms For Telcos

The move could potentially push up broadband costs for consumers as ISPs currently pay “formula-based spectrum charges”. According to Chharia, the formula-based spectrum charges work out to Rs 7.2 lakh for 6MHz spectrum for one year.

“We are opposed to Trai’s proposal of imposing SUC linked to revenue. Also it is not clear as to which revenue it will be linked to…the revenue derived from that spectrum or the entire revenue, which also involves our optical fibre backbone. SUC should not be linked to our entire revenue” Chharia said.

At present, the service providers with Cellular Mobile Telephone Services and Unified Access Service Licence are assigned spectrum through market-based mechanism (auctions). They pay spectrum usage charge (SUC) on the basis of percentage of their gross revenue called AGR.

“However, there are certain categories of telecom/ broadcast licensees to whom spectrum is assigned administratively and SUC is based on a formula-basis. ISPs are among such licensees… present criterion of spectrum allocation to ISPs is city-wise basis, subject to the availability of spectrum,” the regulator noted in the consultation paper.

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