Showing strong aggression towards the Department of Telecom (DoT), the Internet Service Providers Association of India (ISPAI) has filed suit against DoT over its directive for surrendering spectrum, in which the DoT directed the country’s ISPs (Internet Service Providers) to surrender spectrum falling in the Broadband Wireless Access (BWA) space. The ISPAI has filed suit against DoT, in the Telecom Dispute Settlement and Appellate Tribunal (TDSAT).

In the suit filed early this month, the ISPAI has stated that DoT is ‘discriminating’ against ISPs by asking them to surrender 2.5 GHz Wimax spectrum, which was already allotted to ISPs in 2003. According to ISPAI, DoT is asking ISPs to surrender spectrum in the 2.3 GHz band for upcoming WiMAX spectrum auctioning.

In the petition, the ISPAI has maintained that the 2.5 GHz spectrum was allotted to seven telecom companies, including Bharti, R-Com, HCL Infinet, Sify and Spectranet, for mobile wireless broadband, by the government in 2003, but DoT is wanting it back, to put it to auction, for a base price of about Rs 550 crore.

The ISPAI has filed a separated petition over the issue of uniting together of UASL and ISPs for WiMAX spectrum auctioning. According to ISPAI, Universal Access Service Licence (UASL) and ISPs are two different types of service licences with different business models.

The ISPAI has argued that in the countries like Indonesia, Thailand, Taiwan, non telcos also get a reserved licence, but in India UASL and ISPs are treated on the same platform.

The body has raised objections to “unfairly and arbitrarily limiting the number of bands available for auction to only four and reserving bands for MTNL/BSNL”. According to ISPAI, the practice is against free competition and is sheer discrimination against private operators.

In the petition, ISPAI has stated, “By unfairly and arbitrarily limiting the number of bands available for auction to only four, and by reserving bands for MTNL/BSNL, DoT guidelines restrict free competition, discriminate against private operators.”

According to Jasjit Sawhney, CEO, Net4, India’s second-largest ISP by revenues, “The government policy needs a rethink. The current DoT guidelines, equate the Wimax spectrum to 3G spectrum which is unfair. If won by a large operator, the Wimax spectrum might end up being unused, as has been the case with IP telephony.”

The ISPAI has demanded that the reserve price, if any, should not be more than 20-25% of the highest bid for the ISPs. The ISPAI secretary Naresh Ajwani has said, “For ISPs, the stipulated reserved price is not commensurate with the financial models of standalone ISPs.”

The ISPAI has also raised objection against DoT over the issue of the utilization of Rs 25,000 crore universal service obligation (USO) fund, which is with DoT to subsidize telecom and internet rollout in the country. The ISPAI complained that ISPs not allowed to share the fund even though they are contributors to the fund.

In a tender issued in January, 2009, the ISPs with licence from DoT for basic services or unified access services were approved by the government for eligibility for utilisation of USO fund for rural broadband.

Ajwani has argued, “We contribute about 1.5% of our revenues to USO Fund, but we are not been allowed to share the resource for rural broadband rollout, which is unfair.”

According to the ISPAI, the ISPs that were kept out of the purview are now planning to go to TDSAT against the government on the issue.