IT comm urges DoT to resolve 8% AGR issue to give a push to broadband via cable TV networks

MUMBAI: The Parliament Standing Committee on Information Technology (IT) has said that the department of telecom (DoT) to relook at the issue of charging 8% licence fee for the internet service provider (ISP) licence from cable TV companies based on their adjusted gross revenue (AGR) revenue which includes the cable TV business.

The multi system operators (MSOs) have long argued that the ISP licence fee should be charged only on broadband business and should not include the cable TV business.

In its report on the broadcasting sector, the committee noted that the issue of payment of 8% AGR as licence fee to the DoT has held up the utilisation of the vast cable TV network across the country for providing high speed and reliable broadband connectivity in India.

It further stated that the utilisation of the existing cable TV network for providing high speed broadband will also reduce the burden on National Optical Fiber Network (NOFN) while also providing numerous employment opportunities in the sector.

The committee recommended the ministry of information and broadcasting (MIB) to impress upon the department of telecom (DoT) for an early decision in the matter.

The existing Cable TV networks, after certain technical upgradation, can be used for providing broadband services at high speed. The cable TV operators can lay overhead optical fibre access network much faster and economically in order to provide broadband services. Many MSOs are already providing broadband services over their cable TV network.

The Telecom Regulatory Authority of India (TRAI) has recommended provision of Right of Way (RoW) and infrastructure status to MSOs and LCOs so that they can effectively lay their network and get financial assistance from banks for up gradation of their network.

However, the committee noted that many MSOs/local cable operators (LCOs) are not very keen on providing this facility.

The consumers are kept devoid of this facility as the cable operators are not ready to pay the 8% AGR as fee to DoT as required to be paid to the Government on the total collection, including collection from the cable TV service.

To avoid the payment of 8% of fee, the committee noted that most of the operators have created separate entities for providing internet services and are providing separate cables for the internet service for which a separate internet modem is also provided.

For internet service, the setup of the LCOs should be bi-directional whereas it is mainly uni-directional at present. If the issue of 8% of AGR fee is resolved, more & more operators would go for making their system bi-directional to provide internet service on the same cable which is used for TV service.

To give incentive to the cable operators, TRAI had issued a recommendation to DoT for waiving off the revenue from cable TV services from the AGR for a period of four years, the committee stated.

It further noted that the MIB and TRAI had raised this issue and Cabinet Secretariat had constituted a Committee to examine the issue and come out with recommendations. However, a final view could not be taken on this and now the issue is again under consideration of DoT.