ESPs Cry Foul on Indian Government’s Raw Deal

E-mail Service Providers (ESPs) in India are up in the arms over the issue and payment of license fees when the same fees are waived for ISPs.

ESPs have vehemently opposed the license fee terms proposed by the Telecom
Regulatory Authority of India (TRAI) and claimed that there was no
level-playing field for them vis-a-vis the ISPs.

The subject is pertinent in view of the fact that expiration of e-mail service
licenses would begin this year. The department of telecom
(DoT) started issuing five-year e-mail service licenses in 1994.

The ESPs argue that in the case of a zero license fee, there would be
tremendous reduction in e-mail tariffs. They also questioned the necessity
of providing separate licenses for EPS when e-mail can be sent through
Internet as well.

TRAI says, while ISPs may provide e-mail services by virtue of
their adherence to ITU-X400 standards, would be able to provide security,
confidentiality, guaranteed delivery and proof of receipt.

ISPs, on the other hand, would not be able to offer these. TRAI questions whether there any niche market for the ESPs, since ISPs seem to have all the advantages. There is an obligation in the ISP license to
provide services in the rural areas, while there is none such for the ESPs, TRAI points out.

However, the proposal of the ministry of communications and the department
of communications (DoT) seeks to charge from the ESPs license fee from the
sixth year of operation for a period of four years.

Currently, e-mail licenses are issued for five years and can be extended by two years at a
time. It is proposed that the extensions be increased to four years, since ISPs are licensed
for a period of 15 years, extendable by five years or more at a time.

“Now that we have heard them, we will sit together and put forward our
recommendations,” said M.Ravinddra, member, TRAI.

Meanwhile, TRAI has directed DoT not to charge ESPs and ISPs for fixed phone
access and refund all payments received on this count so far. TRAI directed
DoT to withdraw the circular of January last, which levied a charge of $357
for fixed phone access.

Incidentally, of the 16 e-mail licenses issued in February 1994, 14 actually
became operational. While only three or four are operational today, the
others having shut down either because of non-viability or the companies have migrated to become ISPs.

Still, many ESPs are apprehensive about transforming into ISPs in the disorganized Internet industry in India. Many ESPS are waiting for the declaration
of revenue-sharing with MTNL and DoT to fall in place before commencing
Internet services.