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G. Rambabu

New Delhi , April 9

EVEN as an agreement has been signed between Videsh Sanchar Nigam Ltd (VSNL) and Flag Telecom Ltd, regarding access to international bandwidth capacity on the former's networks, the United States Trade Representative (USTR) has raised concern at "India's tolerance of actions by VSNL, limiting access to and use of submarine cable capacity it controls through its cable landing station".

In its latest annual review of foreign compliance with telecommunication trade agreements that seek to identify global barriers facing US consumers and businesses, the USTR has noted that this raises questions about India's compliance with its WTO obligation to ensure reasonable and non-discriminatory access to and use of its public telecom network.

"This year, the USTR received formal complaints regarding a longstanding problem in India, the country's tolerance of actions by its dominant international carrier, VSNL, limiting access to and use of submarine cable capacity it controls through its cable landing station. Given the rapidly growing demand for international bandwidth in India to serve foreign and domestic telecommunications and other businesses, tolerating such restrictive practices hurts a broad range of domestic and international consumer and business interests", the USTR report said.

The Trade Representative is responsible for developing and coordinating US international trade, commodity, direct investment policy, and leading or directing negotiations with other countries.

The report said that recently, under the threat of regulatory intervention, VSNL had reportedly agreed to activate some of the circuits under dispute, freeing up capacity to meet some of the demand.

"However, in the absence of clear rules (e.g. on pricing and provisioning), ensuring reasonable and non-discriminatory access to submarine cable capacity on a long-term basis remains problematic. VSNL has no incentive to allow competitors (whose cable terminates at VSNL's landing station) to freely activate and market that capacity in India when it could keep prices (and market share) for its own services higher by limiting competitors' access to additional capacity.''

USTR is concerned that there still appears to be unreasonable and potentially discriminatory practices and lack of effective legal protection relating to access to wholesale transmission capacity (local leased lines and submarine cable capacity) in several countries. Regulatory intervention had helped address problems in the short-term, but without clear rules backed up by a regulator with adequate enforcement powers, incumbent operators might succeed in blocking long-term solutions, the report said.

The representative will continue to closely monitor this situation and encourage the Telecom Regulatory Authority of India to introduce long-term rules to prevent similar disputes from arising in the future.

The other countries that have identified along with India for "limiting access to international bandwidth" include Germany, Switzerland and Singapore.

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