India Permits Private Gateways, With Strings Attached

The government of India has finalized guidelines for ISPs intending to set up private international Internet gateways, effectively ending Videsh Sanchar Nigam Limited’s (VSNL) monopoly on the services.

The Department of Telecommunications (DoT) is all set to process formal applications from private operators desirous to set up own gateways.

Months after unveiling its Internet policy, the Indian government was taking its time in drawing up guidelines for setting up international
gateways because of national security issues. In the absence of security
guidelines, ISPs could not establish their gateways and were forced
to lease capacities from VSNL.

Now, it is mandatory for the private gateway
providers to connect all routers above 2 Mbps with monitoring facilities of
national security agencies such as the Intelligence Bureau (IB) and RAW.

DoT said under these norms, only ISPs are permitted to set up gateways for
international traffic. This means foreign equity participation in
international gateway projects will be capped at 49 percent. The ISPs will
also free to establish international links through satellites or undersea
cables. No pre-qualification criteria have been incorporated in the guidelines.

The permission is not required for use of encryption up to 40-bit
key length. For stronger encryption, the de-cryption key split into two
parts is to be deposited with the telecom authority.

However, the service providers will have to bear expenses to provide
monitoring equipment for security provisions, which is expected to cost
around US$9,523 (Rs 400,000) per gateway location and/or large ISP node.
They are also expected to provide office space and a local telephone line,
latter for facilitating security agencies’ access to the ISPs’ network.

The application form on a prescribed format will be available with DoT for
US$476 (Rs 20,000) which includes processing fee. A committee comprising
representatives of DoT, the Department of Electronics (DoE), the Defense ministry, Department of Space (DoS),
the National Infomatics Centre (NIC) and the National Association of Software and Services Companies (NASSCOM) will clear the projects.

Soon after the ISP policy was announced by the government in November last
year, several ISPs including Satyam Infoway, Bharti-BT, Global Electronic Commerce Services and Mahanagar Telephone Nigam Limited (MTNL) contacted DoT expressing interest in setting up their own gateways.

However, according to the new guidelines, gateway operators are allowed to
lease their capacities to other ISPs. Smaller ISPs would benefit from
this norm.

A gateway has to be installed within the service area for which license is
obtained. However, its capacity can be leased to ISPs who provide services
even outside the service area of gateway operators. The link between an ISP
and a gateway operator will be through the networks of DoT, Indian Railways,
PowerGrid Corp. and private basic service operators.

ISPs have told that they are apprehensive about the lack of

“It is not clear whether we will be permitted to set up our own
earth stations and also whether we will be free to approach foreign
satellites for leasing transponders,” says CEO of a Mumbai-based ISP who
wanted to remain anonymous for reasons obvious. He added that without this measure, there would be no means of allowing ISPs to set up separate gateways.

The ISPs are afraid that ultimately they will end up with same handicaps as
earlier. There is no point in having gateway and still depend on VSNL or
some other government agencies for earth stations, they felt. The telecom
policy does not permit hiring of transponders from foreign satellites. DoT
norms announced this week are not clear on how DoT will fulfill the high
demand for bandwidth and if they will need to approach DoS to lease

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