Telecom Disputes Settlement Tribunal
Internet Service Providers ... vs Union Of India (Uoi), Through The ... on 3 May, 2005
ORDER
1. Petitioner No. 1, Internet Service Providers Association of India (ISPAI) is a voluntary association of Internet Service Providers (ISPs) in India. Petitioner No. 2, Spectranet Limited, New Delhi and Petitioner No. 3, GTL Limited, Navi Mumbai, are both members of Petitioner No. 1 in addition to several other members. Petitioners No. 2 & 3 are companies incorporated under the provisions of the Companies Act, 1956 and having their registered offices at their respective places as mentioned above and are engaged in the business of providing Internet access and services. The petitioners no. 2 & 3 are, therefore, licensees within the meaning of Section 2 (1) (e) of the Telecom Regulatory Authority of India Act 1997 (in short TRAI Act). The Respondent, the Union of India, is the Licensor of Telecommunication Services within the meaning of Section 2(1)(e)(a) of the Act.
2. This petition has been filed by the ISPAI and others under Section 14 (a) (i) read with Section 14 (A) of the Telecom Regulatory Authority of India Act, 1997. The petition is directed against the action of the Union of India (Respondent) in the Department of Telecommunications (DoT) in issuing guidelines dated 16th December 2004 purporting to extend the scope of services that could be offered by existing and new Internet Service Provider by including Virtual Private Network (VPN)1 Services, even though these services are already being provided by several Internet Service Providers since last many years. The guidelines have been followed by a directive dated 17th January 2005 directing all existing Internet Service Providers to discontinue provision of VPN Services to their customers within 30 days of the issuance of the said letter.
3. The petitioners have prayed for the following:-
"(a) declare the impugned Guidelines dated 16.12.2004, Press Release dated 10.11.2004 as well as Directive dated 17.01.2005 issued by the first Respondent Vide Annexures 1, 2 & 3 respectively to be illegal, unreasonable and arbitrary and not binding and quash the same;
(b) pass such further orders as may be deemed fit and proper in the circumstances of the case, in the interest of justice."
In the interim the petitioner has prayed "ex-parte stay the operation of the impugned Guidelines dated 16.12.2004 issued by the first Respondent and Directive dated 17.1.2005".
4. When this petition came up for preliminary hearing on 8th February, 2005 we recorded that the "petitioner association not being a licencee, could not file the petition, though there could not be any objection if it pursues the matter on behalf of its members who are already before us". Two of the members of the association were already before us. We issued directions that the concerned members of the petitioner association who are affected by the impugned order of the Central Government in the Department of Telecommunication (DoT) shall be made parties. The petition was accordingly amended and petitioners 4 to 20 were added as petitioners.
5. We declined to grant any interim relief to the petitioner during the pendency of the petition. This was by our order dated 11.2.2005, operative para of which reads as under:-
"Taking into account all the above factors we feel that there are no sound reasons for grant of interim stay. If it is made out based on our final determination in this matter that the Entry Fee/Licence Fee payable as per the impugned guidelines needs to be refunded, suitable interest as decided by the Tribunal would also be made payable.
The prayer for interim relief during the petition of the petitioner is declined. However, we grant time up to 28th February 2005 when the provision of VPN Service must discontinue as per direction dated 17.1.2005 of the DoT (Annexure 3 of the Petition). Respondent shall file its counter affidavit within 15 days. Rejoinder thereto, if any, two days before the date fixed.
To be listed on 17th March 2005 for directions and further proceedings."
6. In 1998 Central Government constituted a Task Force to formulate the draft on National Policy on Informatics whose aims were to enable India to emerge as an Information Technology superpower within the next ten years.
7. The Task Force was required to submit the draft policy in three months. Certain other functions were also given to the Task Force for it to make recommendations. There were 15 Terms of Reference. One of these Terms at serial No.5 is :
"Suggest measures for achieving a massive expansion in the use of the Internet by all sections of society, especially in business and education and development of Indian content on the Internet".
8. National Task Force submitted Information Technology Action Plan on July 4, 1998. Some of the recommendations on objectives to be accomplished relevant for our purpose are:
* IT for all by 2008: Accelerate the rate of PC / set-top-box penetration in the country from the 1998 level of one per 500 to one per 50 people along with a universal access to Internet/Extranets/Intranets by the year 2008, with a flood of IT applications encompassing every walk of economic and social life of the country. The existing over 600,000 Public Telephones / Public Call Offices (PCOs) will be transformed into public tele-info - centres offering a variety of multimedia information services. Towards the goal of IT for all by 2008, policies are provided for setting the base for a rapid spread of IT awareness among the citizens, propagation of IT literacy, networked Government, IT-led economic development, rural penetration of IT applications, training citizens in the use of day-to-day IT services like tele-banking, tele-medicine, tele-education, tele-documents transfer, tele-library, tele-info-centres, electronic commerce, Public Call Centres, among others, and training, qualitatively and quantitatively, world class IT professionals. (emphasis supplied).
* INTERNET access nodes will be opened by DoT and authorised ISPs at all District Headquarters and local charging areas by 26th January 2000. As an interim measure, and till nodes are provided in all local charging areas, access to nearest INTERNET access nodes will be on local call rates with effect from 15th August, 1998. ISPs will be responsible for ensuring that this facility is not misused for telephone traffic.
* For setting up ISP Operations by companies, there shall be no licence fee for first five years and after five years a nominal licence fee of one rupee will be charged.
9. Planning Commission published the Report in the Gazette of India on July 24, 1998 and some of the Resolutions are:
* For setting up ISP Operations by companies, there shall be no licence fee for the first five years and after five years a nominal licence fee of one rupee will be charged.
* To enhance the pace of PC and INTERNET penetration in remote and far flung areas in the country, the policy should enable the Defence Services to provide connectivity to their communication systems for civilian applications after due examination.
10. Certain correspondence that was exchanged between TRAI and DoT has been brought on record. On 19.5.2004, TRAI wrote a letter to DoT that some ISP licencees had informed TRAI that they were providing IP based services including VPN service by making use of public internet and utilising lease lines from BSOs for access to customers. According to TRAI's understanding, as per definition of ISP licence, services or service means internet access/content services including internet telephony as mentioned in Clause 1.14 of Schedule-C to the licence and as such ISP licencee could provide any service to its customer as long as it is based on IP protocol and necessarily makes use of public internet. TRAI, therefore, sought clarification from DoT if the understanding by TRAI was in line with the spirit of internet service providers licence. Reply to this was sent by DoT on 1.9.2004 and in the meanwhile another letter dated 5.8.2004 was addressed to the Secretary, DoT by TRAI. Here the TRAI pointed out that various BSOs especially BSNL and MTNL have started delaying/denying the leased lines to ISPs required for providing internet access to their customers. The letter recorded that the "main reasons mentioned by M/s. BSNL for this are lack of clarity on whether ISPs are allowed to provide VPN service, that ISPs can lay their own lines since they have been permitted to lay underground copper cable in the access network and whether the leased lines by ISPs are used for genuine purposes while interconnecting with other private data networks/CUG.
11. TRAI pointed out that the delays/denying on the part of BSNL was causing hindrance for ISPs to provide leased lines internet access to their customers. Reference was made to earlier letter dated 19.5.2004 of TRAI seeking clarification. On 1.9.2004 reply was sent by DoT to the letter dated 19.5.2004 of TRAI. It was pointed out that the scope of ISP licence agreement was confined to providing internet access/content service excepting telephony on internet and that there was no mention of services like VPN and MPLS in the ISP licence. The stand of the DoT reflected in this letter is as under:
"3. Technology is moving forward very rapidly and the endeavour of the Government is to promote newer technologies, which could be offered by the existing infrastructure without disturbing level playing field. As per technology, ISPs can provide such services/facility like IP-VPN, MPLS to their customers using public Internet. However, such services/facilities change the character and scope of the ISP licence and encroach upon the licences of other telecom service providers e.g. one such facility of end-to-end leased line, which is being provided by networks of access providers and NLDOs/ILDOs, can also be provided by ISPs using VPN over Internet.
4. It is necessary to ensure that neutrality/march of technology is not used as subterfuge for poaching on each others licenced territories. Further it is incumbent upon the licensor to ensure through specific and clear licensing conditions in the use of technology, interface, architecture etc that such distinctions are maintained.
5. Hence the ISPs cannot be permitted to provide IP-VPN/MPLS/other end to end service under the present ISP licence."
12. To this letter of 1st September, 2004 of DoT, reply was sent again by TRAI on 10.11.2004 stating:
"Regarding VPN, ITU has recognised the existence of various forms of Network Based Virtual Private Networks (NB-VPN) based on different layers. Typically a Layer 3 network based VPN is used which is a VPN operating at layer 3 and providing a layer 3 service between customer devices belonging to the VPN using IP protocols. As per ITU definition of IP-VPN - 'A network based on IP-VPN is a network based layer 3 VPN that uses IP addressing, IP forwarding and routing, and the IP protocol for control and data, and IP technology as the basis for providing the VPN facilities".
13. The letter points out that there is no separate licence for providing IP-VPN services at Layer-3, though in many countries like Australia, New Zealand , Hong Kong, Japan and USA, IP-VPN services is provided by various ISPs with very low or zero entry fee and revenue share. Pointing out the technical aspect of VPN, TRAI recommended that DoT "may kindly consider reviewing its decision to bar ISPs from providing IP-VPN services".
14. On 22.11.2004 Secretary DoT wrote to TRAI that `ISPs cannot be permitted to provide IP-VPN/MPLS/other end-to-end services under their present licensing agreement". It also mentioned that guidelines for permitting ISPs to offer VPN service were being issued "shortly"`
15. On 26.11.2004 TRAI referred to some clauses of Section 11 of the Act and suggested that the issue be referred to TRAI for opinion before finalising the Government's decision in the matter. The Government, it appears, did not agree and issued guidelines on 16.12.2004 which are being challenged in the present petition.
16. The impugned guidelines extended the licences of Internet Service Providers (ISPs) by including Virtual Private Network (VPN) services. The existing licensees were categorized into Category 'A', 'B' and 'C' and entry fee of Rs.10 crore, Rs.2 crore and Rs.1 crore, respectively, was provided for those licensees who wanted to offer VPN services. Besides this, annual licence fee at the rate of 8% of Adjusted Gross Revenue (AGR) was also imposed. It is the contention of the petitioners, the existing ISPs, that their licences already provided VPN services and they had been providing these services legally for the last so many years to the knowledge of the DoT and TRAI. Petitioners have also contended that DoT did not consult any stakeholder nor the TRAI before issuance of the guidelines and that the guidelines or the directives issued thereunder are violative of the provisions of the Act. It is also the contention of the petitioners that by the impugned guidelines DoT has subverted the Cabinet decision providing no licence fee to be leviable on the ISPs for first five years and then only a fee of Re.1 per annum and no licence fee in the form of revenue sharing. This Cabinet decision, therefore, according to the petitioners could not be altered. The challenge to the impugned guidelines is also on the ground that if those ISPs who do not want to avail VPN services, under the guidelines would also have to pay annual licence fee on the basis of the revenue generated by them and that it also blatantly amounts to overturning the Cabinet decision.
17. Petitioners have disputed the stand of the DoT that VPN service was not included in the ISP licences and that their providing VPN service was in any way an encroachment on International Long Distance (ILD) / National Long Distance (NLD) licences or/and that level playing has been disturbed.
18. Of course, as noted above, petitioners say that any change in the existing licence to bring in VPN service, if according to DoT it was not there, the recommendations of TRAI were mandatory. It was submitted that recommendations of TRAI were taken when Internet Telephony was permitted in 2002 and included in the ISP Licences issued earlier.
19. It was pointed out that when the matter was referred to Ministry of Law in the Department of Legal Affairs for amending the existing ISP licence after the impugned guidelines had been issued, an opinion was submitted by the Department of Legal Affairs that recommendations of TRAI were mandatory before changing the terms of existing ISP licence. It was submitted that this opinion was binding on the DoT and contrary to the said opinion DoT could not have implemented the guidelines or sought to amend the existing ISP licence. Arguments were also addressed by the petitioners to submit that VPN service could not be outside the existing ISP licence.
20. DoT disputed the contentions of the petitioner and justified its action in issuing the guidelines. DoT says VPN service by ISPs is beyond the scope of their licence agreement and asserted that level playing field vis-à-vis other telecom service providers had been disturbed by the petitioners providing VPN on the strength of their ISPs licence. DoT does not agree that decision of the Cabinet has been contravened by issuing the impugned guidelines. DoT pointed out that petitioners have contrived the principles under which they were issued licence as per the Cabinet decision. DoT says that no prior consultation with TRAI was required.
21. We have been taken through technical aspects of VPN service and also have been referred to International Telecommunication Union-Telecom (ITU-T) recommendations (No.Y.1311).
22. Virtual Private Network (VPN) is virtual in nature and is not a network connected on physical lines which we will term as Local Area Network, Wide Area Network or Metro Area Network. VPN stands out through its virtuality. Consequently, private means that it is a closed network. It is private because a number of subscribers by ISP who have access on his server are grouped together. At another station through the same ISP or another ISP another set of subscribers are grouped together and these two groups are connected through the Internet Gateways. The subscribers are given passwords and through firewalls2 and additional security measures are made a secure network. Since no other customer/client network can access this network it is called a Virtual Private Network.
23. The VPN can be IP VPN or MPLS3 VPN. Basically both are on Layer-2 or Layer-3 and use Internet Protocol (IP)4 for carriage of data. The ISPs are not permitted Layer-1 VPN, which is primarily based on the physical media i.e. optical fibre, co-axial cables or any such other media.
24. Though the Cabinet intended the introduction of ISPs for making the nation IT savvy and to use IT enabled services but it will be pertinent to point out here, and which is not disputed, that since 1998 VPN has been used by most of the ISPs including Bharat Sanchar Nigam Limited (BSNL), a Government of India enterprise, though the guidelines have been issued by the government making it as a separate service now as late as December 2004.
25. We believe that the following issues arise for our consideration:-
(i) Whether VPN service is included in ISP licence and if so would not the impugned guidelines contravene the Cabinet decision;
(ii) Whether in the circumstances of the case it was the mandate of the Act that before impugned guidelines could be issued, recommendations of TRAI were obtained;
(iii) If we answer the first issue in favour of the petitioner, the impugned guidelines would have to be set aside. If, however, we decide the first issue in favour of DoT then we have to consider the second issue. If this second issue is decided in favour of the petitioner, we have to consider how the relief claimed by the petitioner is to be reworked while the matter gets finally decided by government based on recommendations from TRAI.
26. We may point out at this stage that the petitioner required from the respondent production of various documents. It was submitted by Mr. Tankha, learned Senior Advocate for DoT, that it will take some time for him to look into the documents. However, on the adjourned date an affidavit under Section 123 of the Indian Evidence Act, 1978 was filed by DoT claiming privilege in respect of certain documents. We record the proceedings of that date as under:
"An affidavit (M.A. No. 89 of 2005) has been filed by the respondent-Dot under Section 123 of the Indian Evidence Act, 1872 claiming privilege in respect of certain documents mentioned at item a), c), d), e), o) & p). After some hearing, Mr. C.S. Vaidyanathan, learned Senior Counsel for the petitioner submits that he will be satisfied if the documents are seen by the Tribunal itself and he will not insist on his rights to go through the documents himself. Mr. Hegde, learned counsel for the respondents submits that the documents afore-mentioned will be duly marked and submitted to us at 10.30 a.m. on 7th April, 2005."
27. We, therefore, examined the records ourselves and apprised the learned counsel for the petitioner as to what these documents contained. These were representations from VSNL/BSNL/ISPAI; Constitution of the Committee by DoT; Opinion of the Law Ministry and Correspondence exchanged between TRAI and DoT etc. The copies of correspondence exchanged between TRAI and DoT were however given to the learned counsel for the petitioners without any objection by the DoT.
28. We may now examine the sequence of events.
29. After the recommendations of the National Task Force on Information Technology and Software Development, first ISP licence was issued in November, 1998. For spread of internet in the country various concessions were given to the ISP licensees. Clause 24 of Schedule-C, Part-I of the licence gives the Conditions 13, 14, 15 and 24, which are as under:
13. INTERNET: Internet is a global information system that:
*is logically linked together by a globally unique address, based on Internet Protocol (IP) or its subsequent enhancements/upgradations;
*is able to support communications using the Transmission Control Protocol/Internet Protocol (TCP/IP) suite or its subsequent enhancements/upgradations, and all other IP compatible protocols; and
14. IP ADDRESSES: Operation of Internet Service requires IP addresses which is at present a 32-bit binary address. This address is required for each permanent connection on Internet. Typically, it is required for ports of routers and other ISP equipment and also for leased line connections to be provided to end users.
15. ISP: means Internet Service Provider licenced to provide Internet Service under this licence.
24. SERVICES OR SERVICE means all types of Internet Access/content services except telephony on Internet.
30. ISP licence was confined to mean all types of Internet Access/content services except telephony on Internet.
31. Under the National Telecom Policy, 1999 (NTP-99), Central Government decided to open Internet Telephony to ISPs w.e.f.. 1st April, 2002. This decision was, however, taken after considering the recommendations of the TRAI. A decision was taken to have a new licence for ISPs who intended to provide Internet Telephony service. Under the new licence agreement providing Internet Telephony service, the definition of service or services was now defined to mean Internet Access/Internet content services including Internet Telephony as mentioned in Clause 14 of Schedule-C and also the licensor decided to reserve the right to impose licence fee and/or Universal Service Obligation (USO) at a later date under Clause 1.1 of Schedule-B.
32. Representations were received from Videsh Sanchar Nigam Ltd. (VSNL) and also Bharat Sanchar Nigam Ltd. (BSNL) complaining that ISPs were in breach of their licence conditions and were disturbing level playing field. The question was whether or not IP-VPN is permitted under the existing ISPs licences. On these representations, it is stated, the Internet Service Providers Association of India also gave its comments:
33. The representations of VSNL and BSNL and comments from ISP Association may be reproduced as under:
"Videsh Sanchar Nigam Limited * ISPs are providing end-to-end managed services, without carrying / terminating traffic over the public internet cloud, in clear violation of the ISP licence conditions.
* Provisioning of such managed services by ISPs is encroaching upon the licensing rights of the NLDOs/ILDOs, who are required to fulfill various obligations in terms of their licence agreement such as payment of high entry fees, roll-out of infrastructure, licence fees, etc. ISPs are not subject to similar obligations and are also not liable to pay any licence fees on revenues from these services, which is also causing huge financial loss to the government exchequer.
* The ISPs are providing these services and, therefore, encroaching upon the right of ILDOs/NLDOs seriously disturbing the level playing fields.
* The legitimate rights of ILDOs/NLDOs needs to be protected and a level playing field ensured. This would prevent serious loss to the exchequer.
* ISP Licence terms be amended to protect government revenues and the interest of ILDOs by asking ISPs to directly terminate the IPLCs on Public Internet (Tier-I) without terminating the IPLCs on any intermediate equipment at distant end and thereby desisting from providing Managed Data Network Services using managed WAN network.
Bharat Sanchar Nigam Limited * It has come to BSNL's notice that many of the ISPs are reselling the bandwidth provided to them for interconnection of their nodes to provide all India long distance leased circuit networks to the customers using IP based MPLS technology. The bandwidth for interconnection of their ISPs nodes is being taken by ISPs from BSNL / other private NLDOs. Thus, ISPs are becoming national long distance leased line service providers, which is not permitted to them as per their terms and conditions of their licence agreement. This is adversely impacting the business of NLDOs who obtain licence after paying heavy entry fee and have to comply with rollout obligations.
* BSNL feels that this results in non-level playing field between NLDOs and the ISPs because NLDOs have to pay a licence fee @ 15% of their revenue from this service segment whereas the ISPs do not pay any licence fee on their revenues from this service.
* They have requested that the regulatory and licensing regime should ensure a level playing field to enable each operator to compete in the market effectively.
Internet Service Providers Association of India (ISPAI) * Scope of services under ISP Licence: ISP Licence specified only one negative covenant i.e. telephony on internet and even Internet Telephony was permitted w.e.f. 1st April, 2002.
* Provision of VPN services by ISPs is in full knowledge of DoT, TRAI and BSNL. ISPs have been offering this service for more than 5 years.
* DoT's views on VPN services on Internet: Perspective Plan released in 2000 mentioned that VPN services are one of the many proposed Internet services. Further, Telecom Engineering Centre (TEC)'s generic requirements mention that these (VPN) are the services which are essential for ISPs to have a wider reach.
* TRAIs view on VPN: TRAI regulation notified in Feb, 2004 mentions VPN as one of the services under category of Internet services provided by ISPs. Tariffs for VPN services have been reported to TRAI since 1999 by ISPs.
* Adverse impact of policy reversal: ISPs have contributed significantly to the growth of Internet in the country. ISPs have invested more than 5,000 crore. Any attempt to change the licensing conditions will threaten existence of Internet industry in India besides affecting important and crucial services like online Railway reservation, on-line banking, supply chain management, IT enabled service etc. * In 1999, DoT sought clarification on VPN services by ISP and the same was provided.
* More than once, BSNL corporate office has clarified to its own field units / circle offices that ISPs can, indeed, offer VPN services.
* VPN is an integral part of Internet - the origin of Internet, TCP/IP and VPNs are inextricably linked and have grown together.
* IP VPN is synonymous with internet itself.
* BSNL itself offers IP VPN as an ISP.
* VPN service is not equivalent to Private leased line networks.
* The NLDO and ILDO licences were granted much after the ISP policy and the respective licensees were conscious of other licences already in vogue and the conditions there under.
* Subscribers using any mode of internet access (even on a dial up) may create a VPN without any involvement and knowledge of the ISPs.
* According to the ISP policy of 1998 the definition of service is given as "service or service means all type of Internet access/content services except telephony on internet". (which was subsequently allowed). This means that licencee permits and therefore right from beginning ISPs are providing TCP/IP based services like e-mail, chat, VPN, web hosting etc".
34. DOT constituted a Committee to examine the issue and the Committee consisted of Member (Production), Member (Technology), Sr. DDG (TEC), DDG (LR) and DDG(BS). The Committee was of the view that at present some of the ISPs were providing or proposing to provide VPN services which were not under the scope of their ISP licences. Instead of prohibiting the service altogether and feeling the need for continuity the Committee recommended that since VPN services were technologically possible and march of technology should not be stopped while ensuring level playing field so as not to put other licenced operators such as NLD/ILD/Access Providers into a disadvantageous position, the licence conditions of ISPs be amended. Permitting VPN services by ISPs would amount to amendment to licence agreement. We are not concerned, at the moment, with other recommendations of the Committee as to the amount of licence fee etc. to be charged from ISPs providing VPN service.
35. After having examined the technical details and the background showing keenness of the Government to spread internet in the country, it appears to us that the function of ISP to connect to internet, is a feature of ISP licence. The whole purpose of the internet policy has been to provide connectivity to internet at cheaper tariffs. There is no mention of VPN with or without connectivity to internet while formulating internet policy by the DoT. It was submitted before us by the learned counsel for the Respondent that IP-VPN service can also be provided with or without connectivity to internet as an end-to-end managed service while the definition of service in the licence agreement provides only connectivity to the internet. As per Respondent, the petitioners while providing an end to end managed service are so providing without connectivity to internet. Respondents contend that provisioning of such services changes the basic character of licence. It is also submitted by DoT that ISPs are poaching on the territory of access providers i.e. NLD/ILD operators.
36. There is no provision in the ISP licence whereby licensees could provide virtual or real leased circuits. When internet telephony service was permitted to ISPs the issue of level playing filed was considered and the proviso was added to the definition of services or service as mentioned above.
37. Thus we observe that though VPN is being defined and discussed by both the parties, including the diagrammatic presentation, on access through internet as well as on direct leased line. The Respondent mentioned that the VPN provided on direct leased line by ISPs is not allowed. This stand of the DoT we accept because by basic definition of ISP it has to be only internet based activity. Licence of ISP permits them the activity concerned with access of internet and use of its content for IT enabled services. As rightly contended by DoT, VPN was not allowed as a part of ISP licence, it is fair for us, therefore, to hold that it becomes a separate service. The quantum of entry fee and revenue share to be charged for a separate service from the service provider would require the recommendations of TRAI as per Section 11 (1) (a) (i) (ii) of TRAI Act.
38. That, however, does not conclude the matter as far as present controversy is concerned. Once it is held that end-to-end managed VPN service is not included in ISP licence there could not be two opinions that the case would come within the purview of Section 11(1)(a)(i) and (ii) of the Act and thus it was necessary to meet the mandatory requirements of the second proviso thereto. It cannot be contended that DoT is not introducing a new service provider. When you allow a distinct service to a service provider which the service provider hitherto could not provide it has to be held that you are introducing a new service provider. The impugned guidelines quite show that a new service provider with different licence fee and entry fee is sought to be introduced. In that view of the matter, guidelines could not have been enforced till the recommendations of the TRAI were obtained and decision taken thereon by the Government.
39. Since we have held the VPN Service as provided by the petitioners is not included in the ISP Licence it therefore cannot be said that guidelines of the Cabinet have been contravened in any way. Once having held that VPN is a distinct service outside their ISP Licence, in our view, recommendations of the TRAI are mandatory as provided under Section 11 (1) (a) (i) (ii) of the TRAI Act.
40. When this petition was filed we heard the arguments on the interim relief sought by the petitioner, but by our order dated 11.2.2005 we declined to grant any interim relief. Once we hold that the mandatory requirements of Section 11 were breached as recommendations of TRAI were not obtained on the extent of disturbance of level playing field and the terms and conditions in regard to entry fee and annual licence fee these could not have been fixed by the Government. It is not necessary for us to go further into the various submissions made by the parties in this regard as once the matter goes to the TRAI a proper procedure will have to be followed by issuance of Consultation Paper, hearing of the parties etc. We believe that four months period will be enough for the Government to take a final decision in the matter. Till then the impugned guidelines will have to be treated as ad-hoc and would require final shape only after a final decision of the government after getting recommendations from TRAI. Till then the impugned guidelines dated 16th December 2004 and directive dated 17th January 2005 shall remain in operation.
41. The question arises now as to how to mould the relief in the present petition till the Government comes up with its order on fixation of entry fee and licence fee. Keeping in view the observations made in the judgment, we order as under:
ISP licensees who wish to provide VPN Services may do so in terms of the guidelines only after paying the requisite entry fee and would pay the annual licence fee as enjoined in the guidelines; subject to adjustment later on in accordance with the final determination of entry fee and licence fee by the government after receipt of recommendations from TRAI. In case after final determination, petitioners are entitled to refund of excess of the entry fee and licence fee paid, if any, it would be refunded along with interest at prevalent bank rates, for such of the ISPs who do not wish to continue with VPN services. For those ISPs who opt to continue with VPN service, the excess amount so worked out along with interest will be adjusted against the future dues.
42. We do not contemplate that there will be any ISP service provider who would be providing VPN service in spite of our order dated 11.2.2005 refusing to grant any interim relief staying the impugned guidelines.
43. This petition, therefore, stands disposed of in terms of the aforesaid observations.
44. There will be no order as to costs.
1. Virtual Private Network (VPN) is virtual in nature and is not a network connected on physical lines which we will term as either Local Area Network, Wide Area Network or Metro Area Network. VPN stands out through its virtuality. Virtual Private Network as its name suggests, is a private network meant for private use by a selected/specified few individuals/group of users and is not meant for use by public in general. Consequently, private means that it is a closed network. It is private because a number of subscribers by ISP who have access on his server are grouped together. At another station through the same ISP or another ISP another set of subscribers are grouped together and these two groups are connected through the Internet Gateways. The subscribers are given passwords and through firewalls and additional security measures are made a secure network. Since no other customer/client network can access this network it is called a Virtual Private Network.
2. Firewall is a software based protection system provided on a terminal of a network including VPN so that no other client/subscriber can intrude into this network where firewalls are provided at the terminal. It means that firewall is a means to protect the VPN from unauthorized access from a subscriber outside this network.
3. In computer networking and telecommunications, Multiprotocol Label Switching (MPLS) is a data-carrying mechanism, operating at a layer below protocols such as IP. It was designed to provide a unified data-carrying service for both circuit-based clients and packet-switching clients which provide a datagram service model. It can be used to carry many different kinds of traffic, including both voice telephone traffic and IP packets.
4. The Internet Protocol is the network layer for the TCP/IP Protocol Suite. It is a connectionless, best-effort packet switching protocol