Centre asks SC to take up TDSAT’s call for no license fee in ISPs

<?php echo html_escape(strip_tags($title)); ?>

By Ashish Mitra --
Wednesday, 06 Jan, 2021

The Union government has sked the Supreme Court tall o take up TDSAT's call for no license fee for ISPs. In its appeal to the Supremet Court the government, has claimed that “telecom service providers have effectively succeeded at approbating and reprobating by enjoying the benefits of the new unified regime and paying for the old regime. This is apart from being a lavish waste of the spectrum resources (when internet services have become highly lucrative), results in an unfair position and a revenue loss of over Rs 4,000 crore to the exchequer.”

Denying that there are two regimes, Solicitor General Tushar Mehta told the Bench, “the decision (tribunal) merely results in a change in policy. There are no ‘dual regulations’ or any sort of classification resulting in any arbitrariness. In fact, in order to maintain parity, and in order to not trample upon the vested right under the old licences wherein the entrants entered the contracts on the ground that no licence fee would be changed for internet services, the mechanism of a graded implementation was adopted.”

Mehta further said that as per the impugned policy, all new contracts would be 8% AGR, including internet services and all old licences, as and when they expired, would have to automatically shift to the new regime. “The entire debate on “new regime” and “old regime” is merely a device to not pay the requisite dues whilst taking the advantage of change in policy,” the government said.

In 2006, the licence fee was charged on revenue share basis. Then the revenue earned from pure internet services was to be excluded from gross revenue to arrive at AGR. This changed in 2013 when even pure ISPs had to pay a percentage of their revenue as licence fee. The DoT’s circular of June 29, 2012 for enhancing the licence fee rates from 6 to 8 per cent was quashed by the TDSAT in October 2012 on the grounds that the department could not have taken such a decision provisionally without following due procedure under the Trai Act. Later, when the UL regime was introduced in August 2013, many TSPs who obtained UL ISP licence afresh or through renewal, approached the TDSAT alleging non-level playing field between pre-UL and UL.

Centre asks SC to take up TDSAT’s call for no license fee in ISPs. The Union government has sked the Supreme Court tall o take up TDSAT's call  for no license fee for ISPs. In its appeal to the Supremet Court the government, has claimed that “telecom service providers have effectively succeeded at approbating and reprobating by enjoying the benefits of the new unified regime and paying for the old regime. This is apart from being a lavish waste of the spectrum resources (when internet services have become highly lucrative), results in an unfair position and a revenue loss of over Rs 4,000 crore to the exchequer.”

Denying that there are two regimes, Solicitor General Tushar Mehta told the Bench, “the decision (tribunal) merely results in a change in policy. There are no ‘dual regulations’ or any sort of classification resulting in any arbitrariness. In fact, in order to maintain parity, and in order to not trample upon the vested right under the old licences wherein the entrants entered the contracts on the ground that no licence fee would be changed for internet services, the mechanism of a graded implementation was adopted.”

Mehta further said that as per the impugned policy, all new contracts would be 8% AGR, including internet services and all old licences, as and when they expired, would have to automatically shift to the new regime. “The entire debate on “new regime” and “old regime” is merely a device to not pay the requisite dues whilst taking the advantage of change in policy,” the government said.

In 2006, the licence fee was charged on revenue share basis. Then the revenue earned from pure internet services was to be excluded from gross revenue to arrive at AGR. This changed in 2013 when even pure ISPs had to pay a percentage of their revenue as licence fee. The DoT’s circular of June 29, 2012 for enhancing the licence fee rates from 6 to 8 per cent was quashed by the TDSAT in October 2012 on the grounds that the department could not have taken such a decision provisionally without following due procedure under the Trai Act. Later, when the UL regime was introduced in August 2013, many TSPs who obtained UL ISP licence afresh or through renewal, approached the TDSAT alleging non-level playing field between pre-UL and UL.