Date:19/06/2006 URL: http://www.thehindu.com/2006/06/19/stories/2006061904461200.htm

National

U.S. unhappy over telecom clause

Sandeep Dikshit

Object to ban on foreign access to networks

This clause was to appease the Left after the hike in FDI cap
Would prevent the spying or controlling of networks from abroad

"Telecom policy biased towards public sector service providers"

NEW DELHI: The United States expressed concern over a key clause in India's deals with foreign-owned telecom networks. This condition was incorporated to address the Left parties' securityconcerns after the Government decided to hike the foreign direct investment (FDI) limit from 49 to 74 per cent.

The U.S. objected to the ban imposed on foreign equipment manufacturers, which prevented them from repairing faults through remote access. This was to preclude the possibility of spying or controlling networks from abroad.

The Government, however, left an escape clause, under which remote access can be provided in case of `catastrophic equipment failure' or the network being incapacitated for a long period.

But, the companies would have to take the permission of the Intelligence Bureau (IB) as the remote access password would be valid only for a limited period of time. The Government also incorporated additional safeguards, including a provision to support the IB in recording transactions as part of on-line monitoring.

Though the Union Cabinet had cleared the proposal to hike FDI in February last year, its notification was held up for eight months to allow for clarifications on issues such as ensuring security while repairing imported equipment.

Citing its concerns vis-à-vis the telecom sector, a U.S. trade representative brought out a paper, listing the restrictions on remote access to networks, traffic routing and re-sale of private lines.

It said: "The Indian Government has put in place new requirements on how international networks are managed in India, which U.S. operators believe seriously impede their ability to do business. In the face of widespread complaints, the Indian Government agreed to delay implementation of these rules until July 2006. Whether concerns of U.S. carriers can be addressed in the interim period remains unclear."

At the same time, the paper conceded that New Delhi had taken "positive steps towards liberalising and introducing private investment and competition in the telecommunication service market."

The U.S. also referred to its concerns regarding India's "weak multilateral commitments" in basic telecommunication and an "apparent bias" of the telecommunication policy towards Government-owned service providers.