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ISPs to offer VPN in licensed area only

December 27, 2004 20:15 IST
The department of telecom has issued guidelines for Internet service providers proposing to offer virtual private network under which the ISP is permitted to provide such services restricted to its licensed service areas.

"ISP is hereby permitted to provide Layer 2 and Layer 3 VPN services over its network while Layer 1 VPN services are not permitted. VPN so configured shall be restricted to its licensed service areas", the guidelines said.

There will be an one-time refundable entry fee of Rs 10 crore (Rs 100 million), Rs 2 crore (Rs 20 million) and Rs 1 crore (Rs 10 million) for Category A, B and C ISPs respectively while the annual licence fee will be charged at the rate of eight per cent of adjusted gross revenue generated under the licence, DoT said.

Initially financial bank guarantee of an amount of Rs 1 crore, Rs 20 lakh and Rs 10 lakh for categories A, B and C ISPs respectively have to be submitted.

Thereafter, the amount of FBG will be equivalent to the estimated sum payable equivalent to licence fees of two quarters and other dues. The tariffs will be as prescribed by TRAI from time to time.

Other terms and conditions include that ISPs shall not engage in reselling bandwidth but will be allowed to lay optical fibre or set up radio links for the provision of services under its license in its service area.

The VPN will be configured as closed user group only and ISPs have to comply with such rules and regulations and as such VPN will carry only the traffic meant for internal use of CUG and no third party traffic will be allowed to be carried on the VPN, DoT said.

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