TRAI (Telecom Regulatory Authority of India) has revealed its recommendations on spectrum usage charges and presumptive adjusted gross revenue for Internet service (ISP) providers and VSAT providers.

The TRAI recommendation today follows DoT’s letter dated 25 June, 2014 seeking TRAI recommendations on Spectrum Usage Charges (SUC) for ISPs and floor level of Adjusted Gross Revenue (AGR) based on amount of spectrum held by VSAT operators.

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DoT has decided that SUC for ISPs should also be brought under the revenue sharing regime i.e. as a percentage of AGR based on amount of spectrum held along with minimum floor level AGR

TRAI said that the existing system of spectrum assignment on location/link-by-link basis on administrative basis to ISP licensees in the specified bands (viz 2.7 GHz, 3.3 GHz, 5.7 GHz and 10.5 GHz) will continue.

TRAI said minimum presumptive AGR should not be made applicable to ISP licensees. For ISP licensees having spectrum assigned from the DoT, a provision should be made in the licensee agreement / internet authorization that licensee shall offer the commercial service to its subscribers on demand within 12 months from the date of spectrum assignment by DoT.

If ISPs cannot offer services, spectrum assigned to ISP licensee may be cancelled.

TRAI has recommended that SUC should not be levied as percentage of AGR and existing formula based mechanism of charging SUC to continue.

Existing system of payment of SUC charges on annual basis by ISP licensees should continue. Interest rate to be levied for delayed payment of SUC by ISP licensees should be 2 percent above the SBI PLR rate existing on the beginning of the relevant financial year.

There should be no requirement of FBG for ISP licensee in respect of formula based SUC payable. Minimum presumptive AGR should not be made applicable to commercial VSAT license.

SUC should not be more than 1 percent of AGR irrespective of the data rate. DoT may take up with DoS to evolve a system where the VSAT licensees are not made to run from pillar to post to get their services activated. The clock should start from the day the bandwidth is allotted by DoS and DoT should allot frequency within 3 months of allotment of spectrum by DoS.

The two departments may also explore the possibility of implementing an on-line application for automating the whole process to bring in transparency.

DoT should make arrangement to accept online payment of financial levies /dues such as LF, SUC and other fees that are paid by the licensees for obtaining licence/ approval/ clearance / issue of NOC from DoT.

DoT should put in place a comprehensive, integrated on-line system that acts as a single window clearance for the allocation/clearances/ issuance for approval/ clearance / issue of NOC and other permissions to the licensees.