The government on Thursday announced a new broadband policy, which would enable direct-to-home and very small aperture terminal operators to expand their services.

It also delicensed frequency bands used for Wi-Fi services but did not permit private players to ride on the last mile infrastructure of Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd.

• New broadband policy announced

• External Link: Broadband Policy 2004

The policy is silent on tax benefits like the reduction of customs duty on broadband equipment and the waiver of sales and service tax for Internet service providers (ISP) which could result in lower prices for broadband users.

But Communications and Information Technology Minister Dayanidhi Maran said at a press conference that the fiscal measures would be announced after receiving the go-ahead from the finance ministry.

The open sky policy for VSAT and DTH operators, which would have enabled them to link directly with any international satellite, is proposed to be discussed with other ministries.

The policy targets 20 million broadband subscribers and 40 million Internet subscribers by 2010.

Under the new policy, DTH operators can provide one-way Internet facility as part of the bouquet of services after obtaining an ISP licence. For bi-directional Internet service, a VSAT licence will also be required.

VSAT operators will be allowed to transmit data up to 2 mbps, compared to the earlier restriction of 512 kbps in a closed user group domestic VSAT network.

As a result, VSAT operators will be able to provide new applications like bulk data transfer for the software industry and in-house training using audio-visual aids due to higher data transmission capability.

The policy has also permitted BSNL and MTNL to enter into arrangements with private players for utilising the available copper loop and content creation.

The government's announcement, following approval from the Cabinet on Wednesday, is expected to increase the penetration of broadband services and help BSNL and MTNL provide about two million connections by the end of 2005. Maran expected broadband prices to decrease and estimated 256 kpbs connections to cost Rs 500-800 a month.

"Last-mile copper loop is not a bottleneck facility for the broadband services. Fixed-wireless will be the key driver in broadband penetration in the country. Unbundling of local loop did not kick off in the US and the UK and even here it would have caused more chaos," the minister said.

To promote broadband through terrestrial wireless, the government has decided to delicense the 2.40-2.48 ghz band for low-power outdoor use and 5.15-5.35 ghz band for indoor use of low power Wi-Fi systems.

It also said several other bands, including the 5.15-5.25 ghz band and the 5.25-5.35 ghz band would be delicensed after consultation with the department of space and after the process of vacation, respectively.

While, receive-only VSAT terminals will not require any approval from the Wireless Planning and Coordination (WPC) wing, others can start the installation process after one month of submitting all relevant documents to the WPC.

Commercial VSAT service providers with ISP licences will be permitted to use the same hub and remote station.

Down to the wire

• DTH plus net: DTH subscribers can get Internet through the same access.
• Gaining miles: Private players can ride on last mile connection of BSNL and MTNL through mutual agreement.
• Wi-Fi users: Wi-Fi to get a boost from spectrum delicensing.
• No tax breaks: The policy is silent on tax benefits for ISPs which could result in lower prices. But the govt says fiscal measures would follow.