From this month, millions of surfers will pay more for accessing the Internet
The government has dealt millions of Internet and broadband consumers a cruel blow by deciding to increase the cost of accessing the Internet from this month July this year.
The users will pay 7 per cent more every month, with the increase in revenue share imposed on Internet Service Providers (ISPs). Worse still, the levy will increase to 8 per cent from April next.
The decision comes despite India having one of the lowest Internet and broadband penetrations, compared with other developing countries. It has missed many of its own targets, including the one to reach 40 million broadband users by 2012: it hit barely 14 million connections this year. Furthermore, the decision will aggravate the problem users face because of low speed, high cost and unpredictable quality. All this, because the government is unable to check the financial misdemeanours of powerful telecom companies.
Consumer organisations’ opposition to this unreasonable and unsubstantiated increase was ignored. In 2009, Jyoti Consumer Advocacy Group and VOICE submitted written objections in response to the statutory consultation undertaken by the Telecom Regulatory Authority of India (TRAI).
“It is unfortunate that the government has hiked Internet prices without understanding the aspirations and affordability of consumers, and struck a body blow to broadband access, the lifeline of economic growth, national competitiveness and social development,” says consumer expert Bejon Misra.
Independent studies by the World Bank, McKinsey & Co and Booze Allen have all conclusively established that in low and middle income countries, a 10 per cent higher broadband penetration accelerates the Gross Development Product (GDP) by 1.4-2 per cent. India is in a desperate need to increase broadband access to deliver public services, banking services, healthcare and the government’s flagship projects like Aadhar, and eventually for disbursement under schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme.
The decision to increase access cost is driven by the government’s intent to address the “arbitrage,” arising out of the differential revenue share payable by large companies against their multiple licences, leading to the alleged underreporting of revenue. Companies tend to earn revenues under licences which attract a share of 6-10 per cent, but report them under their Internet licence that enjoys a lower levy.
This comes amid reports that the government is moving to impose Rs.1,594 crore in penalties — in a related matter — on Bharti (Rs. 292 crore), Vodafone (Rs. 254 crore), Idea (Rs.113 crore), Tata Teleservices (Rs. 273 crore), Tata Communications (Rs. 120 crore) and Reliance Communications (Rs. 551 crore). The operators are contesting these findings.
Instead of taking timely action against wrongdoers in the cases pending for the past five years, the government has instead chosen the easier route of penalising unsuspecting users.
Even small and mid-size ISPs are complaining bitterly. “For ISPs, this is the last nail in the coffin. We are being punished for the government’s failure to audit big players,” says Internet Service Providers Association of India (ISPAI) president Rajesh Chharia.
The broadband space is skewed in favour of large players: of the 155 operational ISPs, just three — BSNL, MTNL and Bharti — control 82 per cent of the subscriber base. The decision will likely worsen the competitive landscape.
The government’s decision will impact the viability of standalone service providers. Consequently, competition will come down, since ISPs now have diminished ability to compete with big telecom companies, whose resources and bandwidth they usually hire for providing services in districts and cities. Even cyber cafés — used by a large and growing population of students and the middle class for Internet access — will suffer because of the cost increase.
Ironically, the move also goes against the key objective of the National Telecom Policy (NTP) 2012: to provide “affordable and reliable broadband-on-demand by… the year 2015 and to achieve 175 million broadband connections by… the year 2017 and 600 million by… the year 2020.” The increase neither makes Internet services affordable nor increases reliability.
On the one hand, the doublespeak in the government’s public policy objectives is reflected in this sudden increase in cost, while on the other, the government is spending roughly Rs. 20,000 crore from a Special Purpose Vehicle (SPV), called Bharat Broadband, to connect 2.5 lakh gram panchayats through a national fibre-optic network.
The SPV is funded, to a large extent, by levies charged on telecom companies and now on Internet users, which contribute to a Universal Service Obligation (USO) Fund. Defying logic, the government’s enhanced levy on Internet services increases the cost of Internet access, but seeks to contribute to a USO subsidy scheme to fund a broadband network meant to reduce the Internet access cost.
Keywords: Internet Service Providers, TRAI, revenue share, internet licence, broadband, internet connection
It pains me to read everyday one news or another about the
administrative idiocy of our government. This decision is not just
stupid but undemocratic too. Is someone in the government reading the
comments here? No. Are they listening to our voices? No. The government
has become so inaccessible that the only way people can acknowledge or
protest government decisions are by throwing the incumbent government
out via elections. What does this mean? Democracy is almost dead and is
in life support. Do we have a cure in sight?
It seems UPA II is committed to a total elimination in 2014 with inefficiency,anti people
policy,corruption at all places and scams and illegal mining and connivance.One more blow
to aspiring students,scholars,urban house wives and pensioners who use Internet to
reserve train tickets,remit bills for mobiles,book for gases etc etc by enhancing Internet
charges.Why not NDA and left parties protest?What about Anna Team?What about science
academies and IIMs and IITs.Students will be the most affected.
What else is left?
I was buying one KG of rice for 28 bucks in May 2012 and its price is 38 bucks now. Petrol.. do not even ask. Everything I ask for in a grocery store has a price that is increasing with every passing day.
Now, to rip me off my hard earned money, boom, goes the internet bill.
What on earth is going on here? They say, we have *great* economists in our government. Where are they today? Millions of tonns of food items are being wasted due to lack of proper storage, and on the other hand we have a steep increase in the price of the same food item at the grocery store. Someone please explain this equation to me!!
Rip the common man on one side and create as many scams as you can on the other.
well,well,well!!! our government is trying its best not to be elected in a next election.what is the another option we are having rather than accept the decision???rebel???for how many times???are we having no any other work to do? this is not the only issue.be awake.be responsible and give your valuable votes to a person-the genuine person not to the party.its not compulsory to give the vote. you can deny on the basis that you could not find the proper one.i cannot understand why this governing people are desperate for money which is short living and not for the popularity gandhiji,nehruji,sardar patel,shastriji,and many others yet enjoying ,many years after their death.sorry for diversion but I think the fundamental problems should be debated.after all ,all these are for awareness of people.
I don’t think government has any idea how much “popular” it has became
with people in nowadays. These kinds of steps are really going to hurt
Indian aspiration of becoming one of the biggest consumer bases to use
internet. Already the services are not so encouraging. What government
is trying to establish here is beyond understanding. Exorbitant (as per
Indian per capita income) prices are going to discourage the use of
internet. Up to some extent this will render null and void the efforts
made by government in this turf.
Is it just the increased revenue for Govt? I doubt it. How many middlemen are getting 'affected' because we the people use online applications?
As Usual Indian Administration failure.
I also think there is rate fixing among broadband operators. In india BB services are very bad but expensive than UK,US. But no one to look into it.
The government is gone nuts!. Have they forgetten the fact that
in this 21st Century Internet is the backbone for Growth.Internet has made possible flow of information, sharing and communication which is vital for exemplary growth. This is anti people step.
The present UPA Government led by Respected Dr. Manmohan Singh Economic policy are all rubbish in economic welfare in India.
It looks like this is an easy way to slow the growth if internet. This
is a tactic widely adopted by totalitarian governments and dictators who
are afraid of too many people getting internet access.
BSNL must start providing wireless internet services and that too at reduced prices to combat the private sectors and penetrate into every home. I recommend a strict audit of the BSNL / OPERATIONS AUDIT and can discover grey areas effecting its development. The Audit General of India must proactively initiate measure to protect BSNL and can help BSNL become world's best telecom services and at an affordable price to every common man. BSNL has highest wired linkage across India, even after having its huge infrastructure BSNL is unable to provide value added services due to its inherent weaknesses and unseen influences at various levels of the organization.
Hope the new laws and regulations help BSNL to recover and improve and reduce its cost for the benefit of common man.If not its look suspicious of encouraging BSNL users to shift to other private players.
I live in a village area with a landline and broadband connection of
BSNL. The monthly charges works out to Rs.700/ average monthly. The
connectivity is slow and it functions twenty days a month with frequent
failures. The tariff is very high for the service we get and again they
want to hike the rates. These public sector organizations cannot improve
upon their functionality and the rut takes a long time to clean. If the
consumers start protesting strongly things would improve.
This decision taken by the gevernment hastily is not a well informed one. They had actually underestimated the number of internet users and also the advantages of internet. Internet helps one in many ways, whatever you name it, you get it in internet. If they increase the cost of internet they should have actually did something to provide quality services atleast through BSNL.
Its chain reaction of Auctioning of any commodity. Higher the price paid by the service providers, higher the charges to the end users. Why should any individual pay more money than its worth ? Its because an organization decides and we follow them ? Does the organization knows what would be the repurcussions of high pricing ? Maruti's and Tata Nano's can be bought by any average middle class person, but BMWs / Mercedes and Rolled Royce are ment only for Rich. Request to the government and the organization is do not over estimate the cost and make it unvialble for Middle and Lower class. We cannot afford to do so as we are the fast developing nation and Telecom should be made cheap for any individual. Let us set good Paradigm of Governance. Jai Hind !!!
The government is trying to make some money out of the tax payers money. But where will all the surplus income generated out of this goes? We, the taxpayers need an answer for this.
If this is viewed in isolation it is just an increase for the above
said reasons (a political rhetoric). However, if one views this in
conjunction with the GoIs despotic attitude towards curbing freedom of
expression, one would definitely be drawn to the conclusion that this
move was intended to deprive the unfortunate (middle class) to connect
with the rest of the world thereby seeking to curb their ability to
unite against the atrocities (corruption, ham-handedness, censorship,etc) of the GoI..
What an unfortunate order? Cant they think of any other means to fund
the national coverage of BB costing the 20000 crores--will that money be
utilised properly? or will end in another scam?
Why tax this segment of the population-- many engineering, medical and
arts&sciences students will suffer as well--
We will learn to live with this- Can any one suggest ways to stopping
this- leading national daily like THE HINDU can carry our sentiments and
help us around?!
All points noted in my lessons learnt document, to be used while voting for the subsequent elections! But, wait a minute, who is my choicest party to vote which would administer these issues with atleast minimum knowledge?
SO Now the government has officially adopted a long-term strategy to
strangle democracy by taxing the only democratic tools.
No wonder they turn a blind eye to corruption since creating awareness about corruption and misgovernance will be taxed at 7% which will be
increased to 8% by next April.
As usual, my faith on The Hindu continues.. Hats-off to the the team to explain the issue in depth. I understand the issue better after reading this article.
But i did not understand a point. In the last two paragraphs the author says that govt is trying to use this money to establish SPVs for common man which was funded earlier by telecom operators or Internet users. Isn't it serves the purpose in some way ?
I think government is behaving like cockroach suddenly exposed to light. With no coherent policy in mind, government is running here and there and bumping everywhere. Fuel, tickets, service tax and now internet bills all are going up to cover up fiscal deficit while scams to tune of billions of rupees are going on within government. It is pity that with just two years of tenure left, the government don't even have time to sit and introspect to design well conceived policies to clean the mess. And to those sympathizers of bsnl here, please forget this hopeless company, it is Air India version-2 where sooner or later huge money of tax payers will be pumped to pay lethargic clerks and babus.
Big corporates are the concern of the Government and not the ordinary people.
Even in places like Saudi Arabia there is much better internet broadband connectivity and cheaper, similar to ones in Europe and USA. But, in our democracy we are being discouraged from using internet by a large extent.
The reason why the govt wants to do this - to address the <b>“arbitrage,”</b> arising out of the differential revenue share payable by <b>large companies</b> against their multiple licences, leading to the alleged underreporting of revenue. Companies tend to earn revenues under licences which attract a share of 6-10 per cent, but report them under their Internet licence that enjoys a lower levy.
So instead of penalizing large telecom companies, common man as usual gets the stick! Large companies who hold multiple licenses should levyed more than the current with a caveat that they can pass it to the end consumers. Then it makes sense what this govt is trying to do.
Also, this move will help our govt to regulate the fast growing media "internet". This goes against our right to information - violation of our fundamental right. This is unfortunate
We have the so called financial experts in the govt. There is one
expert who is out ofthe country for about ten months almost every
year, vociferously advocating that Rs 30 or so is sufficient for a
common to live per day. This chappies is getting fabulous freebies
from the govt, apart from his salary and is enjoying life. The
present govt is totally sunk in various scandals and the reality is
anybodys guess. Everything is NOTED and that is that. If the govt
really want to increase the broadbank penetration, they should reduce
the charges for the BB and also ensure better service rather than
penalising the bb users.
why we need government if they can't control anything or secure faith of
Citizens?? Government is just ruling like British. Its not democracy.
I rely on internet for almost any information needed. I spent 2-3 hours a year
watching TV because I never relied on the authenticity of those sold out
broadcasters. When This party came into power, it's slogan was 'Congress ka haath,
aam adami ke saath', I can not see it happening anywhere in anything since this party
came into power. I request you to please vote in next General Elections, that is the
only way we can contribute in a real way. I'm not blaming any party hear from any
mindset but I think, It's time when we can start owing the responsibility of putting
such people in such high places. They are not the only greedy people, we're also
equally responsible. Your vote is valuable, please give it the way you pay for availing
some service. Do not fall prey to religion and region politics. We learned about
'Divide and Rule politics' from English during our long history of slavery, these guys
sitting in high places are practicing the same old tactics.
It seems like the government is making up for the funds lost in 2G scam.
This immature decision to hike internet usage price will definitely
backfire in few months to come. With IT and Consultancy firms high
dependence on internet and under-pressure profit margins due to
volatility in Europe is certainly going to impact their operational
costs. Now Mr. Kapil Sibal will have to rethink on internet access to
its Aakash tablets. A domino effect which is going to affect each and
every sphere of life.
Just when price of everything is skyrocketing such steep hike in broadband service will only add to the woe of millions of suffering middle class. Internet is an excellent source of information that we will not otherwise get from anywhere. Increasing charge will only limit affordability thereby depriving many of this important tool to access the same. The rise in cost is particularly unjustified as the service is not up to the mark. Speed is poor, customer service is even worse. I am afraid, making internet costlier may well force customers to go for other alternatives. This will in turn eat into the consumer base of state-owned service providers such as BSNL and make them less competitive vis-a-vis private companies that are offering a range of plans at a significantly lower price.
Kudos to The Hindu for highlighting the case.
This kind of key news never finds mention in many so called national
dailies..
The BSNL package at Rs.250 is available, but the Govt of India
policymakers are leading BSNL to a nasty end in Mtreos by slowing
down expansion of capacity.
Consumers are left with no option but to go for Bharti AIrtel at
Rs.699.
Imagine the massive loss to government due to this wilful negligence?
How can the divided consumers fight this ruckus in governance?
Hope a petition gets filed, we need to support action to stop this..
If Govt. knows that Broad band access helps GDP growth and it realy wants our country to grow , it has to reconsider this.
The govt has already increased the rates on milk, electricity, bus tickets, petrol and diesel.. and now its time for the internet. What else is next to be increased?. aam aadmi's wallet is growing thinner while the govts treasury becomes fatter only making room for more scams by the puppet and puppet masters running this country.
This move is decrease the number of internet connections and usage time resulting in one thing.. Welcome back to Dark Ages..
All over the world governments are trying to put restrictions on the internet. The internet is a powerful tool in the hands of the masses for dissemination of information and knowledge. Freedom of expression is a Fundamental Right under Article 19 of the Constitution. The Supreme Court in several landmark judgments has struck down arbitrary restrictions by the state on this precious right.
The internet has created millions of job opportunities all over the world. The phenomenal growth of the IT sector in India has been due to the internet. It is extensively used by students,teachers,lawyers,doctors,scientists,judges,journalists and many others to update their knowledge. Social media is challenging the traditional notions of journalism and creating awareness amongst the people.
If the internet subscription is made more affordable, it can reach the millions of mobile users all over the country.
If the government is funds there are many other ways of raising revenue.The decision must be
i think government always charges penalties from middle class people for his failure.If they failed in the audit of ISP, why we would have paid. govt must charge penalty from wrong doers only.
I still don't get why did the government pass such a rule? If the telcos are at fault then why are they not taking this issue to the court? (Fear of losing again?) Penalizing the users is unjustified. Also, the government did not explain what how this extra revenue will be used for the growth of the country's online presence.
Correct and timely information provided by the reporter!The government by not removing the black grip of OFFICIAL SECRETS ACT is helping corruption more than others in public domain out of public scrutiny.
If the elected representatives follow Gandhian policies like simple living, the country could have benefited a lot. The tax levied on everything could have been eased too.
Seems like the Indian govt. has gone nuts. Diverting their headaches right into common public. For a nation to be developed, citizens should be provided with facilities and amenities which is affordable and reliable. But looking at the current scenario, govt. seems to be doing none..!
With most of media channels "sold-out", internet is the place where people exchange real news and analysis.
So before elections govt wants to shrink this democratic tool. To make it out of reach for "aam aadmi".
When our bureaucrats know nothing about Internet and broadband,one can not expect
anything better. These one exam wallahs only know to fleece the public and loot their
money.
In hosur , i am just 1 km from Bsnl exchange. We have 100 houses in our area. Just 15
broad band connections. And that too with cable fault. Private players are earning a lot by
selling wireless connections, which are slow. Repeated request for new connections is not
heard by the Bsnl department. Never attend to faults. If questioned they say deduct
rent.
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