TRAI mulls over revenue-based SUC for internet service providers

TRAI, the country’s telecom regulator, has come up with a consultation paper to seek public feedback on levying spectrum usage charges linked to annual revenues for Internet service providers (ISPs). The government currently levies spectrum usage charges linked to annual revenues on telecom operators in India.

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In a consultation paper, the regulator said service providers with Cellular Mobile Telephone Services and Unified Access Service Licence are assigned spectrum through market-based mechanism (auctions).

It said that these service providers 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 added.

ISPs in India currently pay formula-based spectrum charges, and the new method, if implemented, could potentially push up broadband costs for consumers.

ISP Association of India (ISPAI) President Rajesh Chharia told PTI that the current practice of “administrative allocation” of airwaves is within reach of small ISPs, which use spectrum for enhancing rural connectivity.

“This spectrum is being used in parts of the country where optical fibre does not reach. So, any additional charge on spectrum will lead to an escalation in cost of service and will have an adverse impact on Internet proliferation in rural areas,” Chharia was quoted as saying.