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No stay on VPN order: TDSAT

February 11, 2005 17:16 IST
In a setback to the Internet Service Providers, telecom tribunal TDSAT on Friday refused to grant any interim stay on the government order asking the ISPs to stop offering corporate network services unless they have the licence to offer the service.

"We are not inclined to grant an interim stay at this moment," Justice D P Wadhwa said in the interim order. TDSAT has asked the department of telecom to extend the last date for compliance by ISPs on the virtual private network service by another two weeks.

The original last date of compliance was February 17. The tribunal will decide on the merit of the issue on March 17.

The DoT had earlier issued an order saying ISPs could offer VPN service only after paying entry and licence fee. It had said they can offer the service by way of amending their ISP licences, with a one-time entry fee of up to Rs 10 crore (Rs 100 million), depending on the category of licence and an eight per cent annual licence fee.

The annual licence fee is eight per cent of the gross revenue and there will be one time non-refundable entry fee of Rs 10 crore for cateogry A, Rs 2 crore (Rs 20 million) for B and Rs 1 crore (Rs 10million) for C category ISP.

Earlier, ISPAI counsel C S Vaidyanathan argued that ISPs had been providing the service since 1999 and it was in the knowledge of the department of telecom, TRAI and Telecom Engineering Centre.

"The government, TRAI, all those concerned knew that VPN is a part of our service. We are offering this service even before NLD and ILD licences were given. As the name virtual private network indicates, it is not a dedicated end-to-end private service, it is an Internet access service which came under the ISPs' licence", he said.

C A Sundaram, the counsel for the DoT, in his counter argument said VPN is an end-to-end leased line service so it is a private network by that definition.

The VPN market is a Rs 5000 crore (Rs 50 billion) market and NLDOs have paid 15 per cent of the annual revenues as licence fee apart from Rs 100 crore (Rs 1 billion) entry fee to offer NLD services which also includes data transfer services. So ISPs must pay the licence fee for offering this service.

"TRAI has not been kept in dark over this. TRAI has accepted the government decision on this. DoT is not asking the ISPs to stop offering the service.

Let them pay the licence and entry fee and offer it. DoT has the power to impose licence fee, he said.