GUIDELINES AND GENERAL INFORMATION FORINTERNET SERVICE PROVIDER(ISP) No.845-51/97-VAS 

1. Invitation of application(s)/proposal(s) for award of licence(s) for providing internet service (ISP – Internet Service Provider Licence).

1.1 On behalf of President of India proposals are invited from Registered Indian Companies for providing Internet Service on a licence on non-exclusive basis.

2.GENERAL AND COMMERCIAL INFORMATION

2.1 ELIGIBILITY CRITERIA:
This invitation is open to any Indian Registered Company. A Company registered in India under the Companies Act, 1956 will be eligible to submit proposal. Licence to run the service will be issued to the proposer company if found eligible and complies with all the requirements laid down in the application form.  Foreign equity, if any, shall be as per the Government policy and guide-lines from time to time. At present, the foreign equity is permitted to the extent of 49%. There is no requirement of the applicant company having any prior experience in information technology or telecommunication services.  

2.2 SERVICE AREA:  
Separate licences shall be granted to any applicant company for each service area. For this purpose, the country has been divided into separate service areas in three categories as mentioned below:-

(i) Category "A" – This covers the territorial jurisdiction of the Union of India except specified areas that may be notified to be excluded from time to time.

(ii) Category "B" – Any of the 20 Territorial Telecom Circles, four Metro Telephone Districts of Delhi, Mumbai, Calcutta or Chennai and four major telephone districts of Ahmedabad, Bangalore, Hyderabad or Pune are Category ‘B’ Service areas.The four Metro Telephone Districts (Delhi, Mumbai, Calcutta & Chennai) are not part of any Telecom Circle, whereas the four major Telephone Districts (Ahmedabad, Bangalore, Hyderabad & Pune) are part of respective Telecom Circle.

(iii) Category "C" – Any Secondary Switching Area (SSA) of DOT with geographical boundaries as on 1.4.98, will form a separate category "C" Service Area with the exception that each of the four Metro Telephone Districts of Delhi, Mumbai, Calcutta & Chennai and of four major Telephone Districts of Ahmedabad, Bangalore, Hyderabad & Pune of the DOT/MTNL with geographical boundaries as on 1.4.98, will form a separate Category ‘B’ service area. Applicants will be required to submit separate application for each service area. The ISP will be required to set up his nodes i.e., Routes/servers within the geographical limits of the service area. An applicant company may be granted any number of licences. Also, there shall be no limit on number of licences that can be granted in a particular service area. The leased line subscribers shall be from within the service area. However, the ISP can offer dial up service from any part of the country. Existing E-Mail and VSAT Service Licensees may also obtain separate ISP Licence for any number of the above mentioned service areas subject to fulfilment of eligibility criteria.

2.3.VALIDITY OF THE APPLICATION
Each proposal shall be valid for a minimum period of six months from the date of application.

2.4 PROCESSING FEE:
The proposer shall enclose a DEMAND DRAFT for Rs. 5,000/- (Rupees FIVE Thousand only) in favour of Pay & Accounts Officer, Headquarters, Department of Telecommunications, Sanchar Bhavan, New Delhi-110 001 in respect of each service area, separately with each application towards processing fee. The processing fee is not refundable.

2.5 ISSUE OF LICENCE:
Separate licence will be issued for each service area proposed, under relevant provisions of Indian Telegraph Act, 1885, Indian Wireless Telegraphy Act 1933 and TRAI Act 1997 and the licensee shall abide by the provisions of the said Acts and the rules made thereunder.

2.6 INTERCONNECTION WITH OTHER NETWORKS
Direct interconnectivity between two separately licensed ISPs shall be permitted. Authorised Public/Government organisations will be allowed to provide INTERNET Gateway access including international leased circuits directly without going through VSNL Gateways. Private ISPs are allowed to provide such International Gateways after obtaining Security clearance for which the Interface of Private ISPs shall only be with the Telecom Authority.

The licensee may obtain the transmission link on lease from DOT, Licensed Basic Service Operators, Railways, State Electricity Boards, National Power Grid Corporation or any other operator specially authorised to lease such lines to the ISPs.

The licensee may also establish its own transmission links within its service area for carrying traffic originated and terminated by his subscribers, provided that such capacities are not available from any other authorised agencies and subject to permission of Telecom Authority. An ISP may provide Internet Service to any VSAT subscriber (who could be served by a shared hub commercial service provider or captive private VSAT network), if the VSAT is located within the service area of the ISP. For this purpose, a direct interconnection of VSAT or VSAT-hub through leased line obtained from an authorised provider to the ISP’s node/server shall be permitted only for the flow of Internet traffic.

The existing licence for Closed Users Group Domestic 64 KBPS Data Network via INSAT Satellite Systems does not grant long distance carrier rights to the licensee. The ISP shall provide to the Telecom Authority a monthly statement of VSAT subscribers served with their locations and details of leased line interconnection with the VSAT hub. The VSAT hub, however, need not be located in the service area of the ISP. Resources required for interconnecting the licensee’s network to the network of upstream internet access providers (DOT/VSNL etc.) or any other service provider licensed by the Authority including time frame for provision of the same, will be mutually agreed between the parties concerned.

The resources may refer to include but not limited to physical junctions, PCM derived channels, private wires, leased lines, data circuits other network elements.. The licensee shall apply for and obtain the network resources from the concerned parties. The tariff of such network is outside the scope of this licence agreement. Licensor will have no obligation for such resources from other parties.

2.8 DELIVERY OF THE SERVICE:
The LICENSEE shall be responsible for installation, testing and commissioning of all the equipment to provide the SERVICE including connectivity to DIAS or GIAS or authorised public/Government Organisations for delivery of Internet traffic. The licensee shall provide service within 18 months from the date of signing of the licence agreement. Commissioning of service will mean providing commercial service to customers.

2.9 EXTENSION OF LICENCE:
The validity of licence is initially for a period of fifteen years unless otherwise terminated. If requested by the licensee, extension may be granted by the TELECOM AUTHORITY on suitable terms and conditions for a period of five years or more at a time. The decision of the TELECOM AUTHORITY shall be final in this regard.

3.0 TECHNICAL REQUIREMENTS:
Private ISPs shall use IP(Internet Protocol) and shall meet the technical requirements of the Internet Service Providers (DOT/MTNL/VSNL/other ISPs) to which it is connected. The equipment used by the Private ISP shall be in conformance with the Interface/Protocol requirements as applicable of the service provider. Some of the interfaces required are given below:- Interface Requirements  

(i) Subscriber Dial up Access 2 wire access over PSTN for modem interface.  2 wire dial up access on ISDN Basic and Primary rate interfaces.   (ii) Leased Line Interface  64K, N x 64K or 2.048 Mb/s, N x 2.048 Mb/s Leased lines.  Frame Relay.  X.25  ATM  G. 703   Access to internet through authorised Cable Operator shall be permitted without additional licensing subject to applicable Cable Laws (The Cable Television Networks (Regulation) Act, 1995) as modified from time to time. ‘Last mile’ linkages shall be freely permitted within local area either by fibre optic or radio communication for ISPs. In case of radio links, clearance from WPC wing of the DOT shall be required to be obtained by the ISPs to avoid frequency interference.

3.1.QUALITY OF SERVICE:
The quality of service over internet is not established and defined as yet. As such, the QUALITY OF SERVICE is not being defined for the time being. However, it may be defined at a later date based on the experience gained and inputs from the Internet Engineering Task Force (IETF).

3.2 TELEPHONY ON THE INTERNET :
Telephony on the Internet is not permitted. The licence will be liable for termination for any violation of this clause of the Licence Agreement. The licensee shall also take measures on his own and as and when directed by the Government at his own cost to bar carriage of Telephone Traffic over Internet.

3.3 OBSCENE MATERIAL AND APPLICABILITY OF CYBER LAWS:
flow of obscene, objectionable , unauthorised or any other content infringing copy-rights, intellectual property right and international & domestic Cyber laws in any form over the ISP’s network is not permitted and the ISP is supposed to take such measures as to prevent it. Any damages/claim arising out of default on the part of the licensee in this respect shall be the sole responsibility of the licensee.

3.4 IP ADDRESS, DOMAIN NAME:
It will be the responsibility of the licensee to obtain IP address, domain name etc. from the competent authority. In case the IP addresses are taken from the Department of Telecommunications, the same are non-portable and have to be returned to DOT at the termination of connectivity contract.

4.FINANCIAL CONDITIONS 4.1 QUANTUM OF LICENCE FEE AND SCHEDULE OF PAYMENTS  
(i)The Telecom Authority has decided to waive the Licence Fee for a period up to 31.10.2003. For those ISPs also who obtain licences prior to 01.11.2003, a nominal licence fee of One Rupee per annum will become payable from 01.11.2003. (ii) For access and other charges including MODEM charges payable to the DOT/ MTNL/VSNL/other service provider at the prescribed rates, bills will be raised directly by the DOT/MTNL/VSNL/other service provider and shall be a matter between the Licensee and such service provider(s).

4.2 PERFORMANCE BANK GUARANTEE(PBG)
A performance bank guarantee of Rs. 2.00 crores for category ‘A’ Service Area, Rs. 20.00 lakhs for each category ‘B’ Service Area and Rs. 3.00 lakhs for each category ‘C’ Service Area valid for two years from any Scheduled Bank in the prescribed form ( Schedule ‘D’ of the draft Licence Agreement) shall be submitted alongwith the application for each service area. The licensee will be liable to extend the validity of Performance Bank Guarantee two months prior to its date of expiry on its own without demand from the Licensor for a further period of one year on year to year basis.

On any failure to do so, the performance bank guarantee will be encashed without giving any notice. This is without prejudice to any other action that may be taken under the terms and conditions of the licence.

4.3 TARIFF ISPs will be free to fix their own tariff. The tariff shall be left open to be decided by market forces. However, the TRAI (Telecom Regulatory Authority of India) may review and fix a tariff at any time during the validity of the licence which shall be binding on the Licensee.