By providing unauthorised Internet access to their subscribers, cable operators without an ISP license are not just bending the law, but are also eating into the much-needed revenue of ISPs. Srikanth R P reports

If an ISP license is not required for cable operators then what happens to those ISPs who have invested a lot of money in acquiring a license?

According to Dinesh Pinto cable operators are taking advantage of an ambiguity in the ISP license

With an estimated 40 million homes subscribing to cable television in India, there is no doubt that there is huge potential to provide Internet access through the cable route. And this immense market potential has attracted both, national players like Hathway and Siticable, and also regional players. While the Government of India and other industry organisations have always welcomed the cable medium as the best and most cost-effective way of promoting Internet access in India, cable operators are misusing their favoured status. Most of the small-time cable operators, who have started offering Internet access, do not even have a basic ISP license which is mandatory for offering Internet access in India.

A different connection
Though the law clearly states that except for a licensed ISP, nobody is permitted to offer Internet access to a subscriber in India, cable operators have conveniently overlooked this clause. At present, the instances of providing unauthorised Internet access through the cable route are few and far between, but it could pose a serious problem for authorised ISPs in the near future.

Already there have been a few incidents where small regional ISPs have been forced to shut shop, as a result of others violating the law.

A case in point is Maxwell Tradelink, a ‘C’ category ISP located in Tarapur, Maharashtra, which closed down its operations in April this year. A large part of the company’s dial-up customers switched over to the cable operators offering Internet access at cheaper prices.

Says Dinesh Pinto, an ISP consultant (whose office in Fort, Mumbai is hounded by hundreds of calls from cable operators wanting to provide Net access), “Unlike an ISP who is made to sign a strict license agreement, which mentions factors like maintaining of logs, a cable operator has to sign no agreement. There is also no need for paying huge license fees. If ISP license is not required for cable operators then what happens to those ISPs who have invested a lot of money in acquiring ISP licenses, setting up operations and also suffering huge losses in the hope that they can break even in the near future?”

Most cable operators, who don’t know too much about the Internet, are now looking at providing Net access to their existing subscribers. All a cable operator has to do is get a leased line and distribute bandwidth available. The mode of distributing bandwidth is also inexpensive, as they already have the required network and subscriber bases in place. Cable operators have started laying CAT 5 cables along existing cable lines, which terminate at an Ethernet card in a subscriber’s PC.

The legal angle
As a rule, ISPs are required to sign an undertaking from the applicant stating that the leased line connection will not be resold rarely however is this rule implemented. The applicant also has to give a stamp paper undertaking that the proposed circuit will work on a point-to- point basis. Small regional ISPs are clearly angry about the fact that there has been no serious effort from industry organisations including major ISPs to gauge the authenticity of a user. Regional players say that this laxity will affect the bigger ISP in future, just as much as its affecting them now.

While cable operators like Hathway or Siticable have a right to distribute bandwidth since they are also have an ISP license, there are some cable operators who are trying to hoodwink authorities by saying that they are the franchisee or marketing agents of a licensed ISP. Pinto counters this claim by stating that while it is perfectly legal for the franchisees to sell Internet services of an ISP, they (cable operators) don’t have any right to create the last mile connectivity by re-distributing the bandwidth.

Cable operators have also taken advantage of an ambiguity in the ISP license. The ISP License under Clause 7.5 (ii) states that, ‘Access to Internet through authorised cable operators shall be permitted without additional licensing, subject to applicable cable laws.’ Explains an official spokesperson of Internet Service Providers Association of India, “What this really means is that an ISP can offer Internet access through an authorised cable operator, and not vice versa. The idea behind this is to enable an ISP to use the infrastructure and reach of the cable TV operator to offer its services. But they have apparently misinterpreted the clause. However, they are not the only ones bending the law. Some cyber cafes too are re-distributing bandwidth by offering Internet access in residential complexes.

While some players, like the Tatas, have set up vigilance departments to check on a leased line customer, others are not so particular. Moreover, in the present scenario where ISPs are struggling for revenues, they are not too anxious to protest against allegations of re-distribution, in the fear of losing a customer.

Is there a way out?
Pinto says that all ISPs must have a vigilance department in place to ensure that the leased line doesn’t end up in the hands of a customer who could prove detrimental to their future growth. The other option for ISPs is to proactively court cable operators by entering into partnerships. With this move, the cable operator would gain by offering legal services to its subscriber, while the ISP would be able to garner the much-needed revenue.