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This is an archive article published on July 27, 1997

VSNL role in Internet services raises more questions than answers

CHENNAI, July 26: The Web is seeming stickier after the government recently decided to open up Internet services. Although the move has bee...

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CHENNAI, July 26: The Web is seeming stickier after the government recently decided to open up Internet services. Although the move has been largely welcomed by private players, it has thrown up more questions than there are answers.

One major question-mark is over the role to be played by Videsh Sanchar Nigam Ltd (VSNL). Till now, VSNL had a monopoly over Internet services available in India. Even when the Internet services sector is thrown open to private participation, service providers would have to go through VSNL’s international gateways.

There seems to be some dilemma here. VSNL is to provide the infrastructure for the Internet service providers (ISPs). It is also an Internet service provider. So what is VSNL’s role? “Is it a service provider or is it a provider for the service providers,” wonders Padma Chandrasekaran, Vice-President – Internet & Services, Satyam Infoway (Private) Ltd. Satyam is one of the founder members of EISPAI (E-mail and Internet Service Providers Association of India), which has submitted a blueprint for the formulation of an Internet policy to DoT.

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If VSNL is also going to be a service provider, then there is likely to be a conflict of roles for the telecommunications giant and this would affect the private ISPs. Hence the ISPs have raised the issue of a level playing field. Interestingly, the Department of Telecommunications (DoT) and the Department of Electronics (DoE), have also evinced interest in providing Internet services as a part of their package. Which could compound the Web tangle.

ISPs are also unhappy about the tariff proposed to be charged on the lines leased out to them. Apparently the ISPs will be charged double the normal rental for a leased line. “There seems to be no rationale behind it,” says Chandrasekaran.

Although a lot of interest has been generated in the Internet services business as the future mode for global business activities, interested parties are apprehensive about it taking off in a big way. This mainly stems from the point of view that the tariff structure for the end-users should be decided by market forces. There should be no fixed tariff system with the charges pre-determined by the DoT, they say.

And, most importantly, the ISPs feel that DoT must lay down minimum service conditions and allow only qualified players to become ISPs. They feel that much of their servicing capacity would depend upon the quality of service they would get from DoT.

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There have already been some problems on this front. Given the poor quality of the basic telephone services, it has become increasingly difficult for some industrial sectors like publishing and information technology to transmit their reports, some of which run to hundreds of pages, over the Internet. “Privatisation of Internet services would prove to be a farce if the basic network is not improved,” said a source in the electronic publishing industry.

Apart from these issues, the EISPAI has also studied the potential for the Internet services in India and the modus operandi of Internet services and service providers in various countries in Europe and Asia. Based on these studies, they have come out with a basic set of recommendations, which has been submitted to the DoT for consideration.

Some of the recommendations made are allowing multiple Internet Service Providers to operate, allowing Indian ISPs to interconnect with foreign ISPs via an international leased line, allowing Indian ISPs to interconnect with each other and fixing up a tariff for the bandwidth at the same rate, if not cheaper, as other users. DoT appears to be open to the proposals, they feel.ISPs also pooh-pooh the idea that any concessions to private players will eat into the revenues of VSNL, which has invested a great deal in infrastructure for Internet services.

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