Computers Today, December 1-15, 1998, Telecom

December 1-15, 1998 TELECOM

TELECOMMENT
Monopolists in the Making

Basic phone firms' opposition to Internet liberalisation is against the customer.

T H Chowdary

Strings to Make it Simple

View Port: please.keep.it@ simple.com

The exit of Sushma Swaraj from the Union Cabinet will pave way for another Union Minister for Communications-India's 40th since independence. The decision to change a cabinet minister so soon is unfortunate, considering that the BJP-led government has information technology in the National Agenda, and telecommunications as its support base. It will be a miracle if the new incumbent can take decisions and push policy formulations that are so urgently called for. The first miracle has already happened. After an inordinate delay, the Department of Telecommunications (DOT) has announced the Internet Service Provision policy for private companies.

While one would have to put up with uncertainty at the Ministry for some time, an unseemly and anti-competitive clamour is brewing - this time not from DOT but from the basic telephone operators. The Association of Basic Telephone Operators (ABTO), a group of six companies, is opposing some of the decisions in the Government's policy to liberalise the Internet service. I am afraid that their opposition is anti-customer, anti-competition and anti-liberalisation.

All of us know that in terrestrial telephony the last kilometre is a bottleneck. It is also the weakest link and the most delaying element in providing service. To get over this problem once and for all, the National Task Force on Information Technology (NTFIT) prompted the government to allow use of radio/wireless in the 2.4 GHz band freely by all ISPs. The ABTO opposes this on the ground that its business would suffer. The operators say they are using wireless to pick up customers in the access network. The bandwidth there is very limited and would not sustain high speeds required by many Internet customers. Access is but one part of their telecom network. In order to make them viable, all the customers of Internet are to be made to depend on them or the DOT. This is unacceptable to customers who want speedy service and choice.

Fight the Real Problem

The ABTO opposes the recommendation/resolution that the State Electricity Boards, the Railways and the National Power Grid Corporation should also be allowed to build broadband, high-speed, digital data transport to be leased to the ISPs. They wish to have the market entirely to themselves (and the DOT, as a necessary evil).

The ABTO is also opposing the recommendation that the telephone companies/DOT should charge dial up calls from Internet customers to the nearest POP (Points of Presence) of the ISPs at local rates. That's anti-customer too. The basic phone companies can also become ISPs at a marginal investment. They would be gaining new customers if they can offer other services besides telephone. Instead of choosing this course, they are positioning themselves against consumers. The ABTO is even opposed to cable TV operators providing access (and service) to ISPs, to Internet customers for fear that their access network would be under-utilised.

The real trouble is the high licence fees, interconnection charges and radio spectrum costs that are imposed on P-Telcos. If the companies agitate against these disincentives, customers would go along with them. The reason being that all these costs are external to the business of telephone and are reflected in the prices the service providers will charge. They also go against the National Telecom Policy's avowed goal of affordable services to one and all. It would be best if the P-Telcos care for consumers, and talk about consumer welfare and interests. They should also be prepared for unfettered competition. Consumers can very well understand the eagerness of the private telecom operators to obtain a licence but they will not forgive them if they conspire and team up with a notorious monopolist and in a reactionary fashion, try to perpetuate a duopoly.

The writer is ex-chairman, Videsh Sanchar Nigam Ltd.

Issue Contents Write to us Subscriptions Syndication