Govt may bring ISPs under USL net

Internet service providers (ISPs) such as Sify, Tulip and World Phone may soon have to subsidise the broadband connection in rural areas. The government is considering a proposal to bring the value-added service providers under the universal service obligation (USO) norms. Presently, telecom service providers are required to pay 5% of their adjusted gross revenue (AGR) as universal service levy (USL) to meet the USO norms. ISPs and other value-added service providers are, however, exempted from this levy.

“The government is contemplating several measures to increase broadband penetration in the rural parts of the country and levying USL on ISPs can be one of the tools for taking the programme ahead,” a source in the department of telecommunication (DoT) said.

Money raised through the initiative would be utilised to subsidise Bharat Sanchar Nigam Ltd’s (BSNL) rural broadband connections. DoT already provides subsidy to BSNL for spreading telecom network in the rural areas.

Progress on the front of broadband penetration has been quite low. Total connections as on April 30, 2008, stood at 4.01 million as against the government’s target of nine-million connections by 2007 and 20 million connections by 2010.
Worried over missing the target—both on the front of broadband and internet—the DoT is in the process of devising new strategy for tackling the situation. The subsidy scheme is a part of that strategy. The scheme would be implemented in phased manner across the country and would also cover remote areas including the north-eastern states. This would cover common service centres (CSCs) being set up by the department of information technology (DIT) schools, primary health centres and gram panchayats in a phased manner.

The government is also planning to subsidise its broadband initiative by using existing USO funds. The DoT has about Rs 15,000 crore of unutilised money under the USOF scheme and is finding ways to spend this in a holistic way.