The United States-based CompTel/ASCENT Alliance, a trade association of 400 American telecom companies, has accused the Tata-controlled Videsh Sanchar Nigam Ltd of indulging in commercial practices that flout international trade commitments made by India.

In a missive to the telecommunications ministry and Lalit Mansingh, India's ambassador to the US, CompTel/ASCENT has said, "The commercial practices of VSNL have created an artificial shortage of capacity, which prevent competitive operators from meeting the full bandwidth demands of their customers and keep bandwidth prices at much higher levels than the prices for similar capacity on routes where the market is more competitive."

VSNL sources said the company was considering a 10-15 per cent cut in bandwidth rates in the next couple of months.

Company sources said while VSNL was willing to match cost-based bandwidth tariffs, the Indian scenario did not justify selling bandwidth at a loss in order to fill capacity on the cable.

The sources said huge overcapacity drove some international cable companies to offer bandwidth at below cost across the Atlantic and Pacific oceans. "The distress sale of bandwidth resulted in numerous bankruptcies," they said.

The US trade association has pointed out that VSNL's unfair pricing has artificially kept the cost of bandwidth between India and America 2-3 times more expensive than the cost of a similar circuit with Singapore and 8-10 times higher than a link with China.

The association, which comprises companies like MCI Worldcom, AT&T Global Wholesale, KMC Telecom, VeriSign and ITC DeltaCom, said it was concerned with VSNL's restrictions on access to submarine cable capacity, which were inconsistent with India's trade commitments.

"VSNL, as a major supplier, is obliged to offer interconnection on a basis that is no less favourable than that offered to itself," said the letter signed by Carol Ann Bischoff, the association's chief legal officer.