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GUIDELINES AND GENERAL INFORMATION FOR INTERNET SERVICE PROVIDER (ISP)

Please check up with Department of Telecommunication for the latest and correct details of the guidelines. This document is not official and Bnet Services is not reposible for accuracy of the document or any decisions taken based on this document.

GENERAL AND COMMERCIAL INFORMATION:

ELIGIBILITY CRITERIA:

This invitation is open to any Indian Registered company.

A Company registered in India under the Companies Act,1956 will be eligible to submit proposal. Licence to run the service will be issued to the proposer company if found eligible and complies with all the requirements laid down in the applicationform.

Foreign equity, if any, shall be as per the Government policy and guide-lines from time to time. At present, the foreign equity is permitted to the extent of 49%.

There is no requirement of the applicant company having any prior experience in information technology or telecommunication services.

2.2 Service Area

Separate licencesshall be granted to any applicant company for each service area. For this purpose, the country has been divided into separate service areas in threecategories as mentioned below :-

(i) Category "A"Service Area - This includes whole of India.

(ii) Category "B"Service Area - This consists of each one of the 20 Territorial TelecomCircles and four Metro Telephone systems of Delhi, Mumbai, Calcutta &Chennai of the Department of Telecommunications
(DoT)/MTNL. However, ifa licence for the Telephone Systems of four major cities of Ahmedabad,Bangalore, Hyderabad & Pune is required, these will also be treatedas a category "B" Service Area on par with the Telecom circles.

(iii) Category "C"Service Area - Any Secondary Switching Area (SSA) of DoT with geographicalboundaries as on l.4.97, will form a separate category "C" Service Areawith the exception that each of the four Metro Telephone systems of Delhi,Mumbai, Calcutta & Chennai and Telephone Systems of four major citiesof
Ahmedabad, Bangalore, Hyderabad & Pune of the DoT/MTNL with geographicalboundaries as on l.4.97, will
form a separate category "B" Service Area.

Applicants will berequired to submit separate application for each service area. The ISPwill be required to set
up his nodes/servers within the geographical limitsof the service area. However, the subscribers will be
responsible for procurementof Subscriber's Terminal Equipment.

An applicant companymay be granted any number of licences. Also, there shall be no limit onnumber of
licences that can be granted in a particular service area. Thesubscribers of the service shall be from within the
service area exceptfor dial up access subscribers from anywhere in the country.

Existing E-Mail andVSAT service Licensees may also obtain separate ISP Licence for any numberof the
above mentioned service areas subject to fulfillment of eligibilitycriteria and shall implement the service
independent of their existingNetwork.

2.3 VALIDITY OFTHE APPLICATION

Each proposal shallbe valid for a minimum period of six months from the date of application.

2.4 EVALUATIONOF PROPOSALS :

To assist in theexamination & evaluation of proposal the TELECOM AUTHORITY or its
authorisedrepresentative may, at its discretion ask the applicant clarification w.r.t.its proposal. The request for
clarification and response thereto shallbe in writing.

2.5 The TELECOMAUTHORITY reserves the right to acceptor reject any application without assigning any
reason.

2.6 PROCESSINGFEE :

The proposer shallenclose a DEMAND DRAFT for Rs. 5,000/- (Rupees FIVE Thousand only) infavour of
Pay & Accounts Officer, Head Quarters, Department of Telecommunications,Sanchar Bhavan, New Delhi-110
001 in respect of each service area, separatelywith each application towards processing fee. The processing
fee is notrefundable.

2.7 ISSUE OF LICENCE

Separate licencewill be issued for each service area proposed, under relevant provisionsof Indian Telegraph
Act, 1885 and Indian Wireless Telegraphy Act 1933 andthe licensee shall abide by the provisions of the said
Acts and the rulesmade thereunder.

2.8 NETWORKINGOF THE SYSTEM, INTERCONNECTING WITH OTHER SEPARATELY LICENSED
SYSTEM ANDDELIVERY OF INTERNET TRAFFIC TO DOT'S INTERNET NODE (DIAS) OR VSNL'S
INTERNETGATEWAY (GIAS)

Direct interconnectvitybetween two separately licensed ISPs shall be permitted. Internationaltraffic shall flow
only through DoT's Internet Node i.e. DIAS or VSNL'sInternet gateway i.e. GIAS. The ISPs shall have option to
connect theirInternet node either to DoT's node or VSNL's gateway directly for the purposeof delivery of
International Traffic.

The licensee mayobtain the transmission links on lease from DoT, licensed Basic ServiceOperator or any
other operator specially authorised to lease such linesto the ISPs. The licensee may also establish its own
transmission linkswithin its service area for carrying traffic related to his service only,provided that, such
capacities are not available from any other authorisedagencies and subject to permission of authority.

An ISP may provideInternet service to any VSAT customer (who could be served by a sharedhub commercial
service provider or captive private VSAT network), if theVSAT is located within the service area of the ISP. For
this purpose, adirect interconnection of VSAT or VSAT-hub through leased line obtainedfrom an authorised
provider to the ISP's node/server shall be permittedonly for the flow of Internet traffic. The ISP shall provide to
the TelecomAuthority a monthly report of VSAT customers served with their locationsand the leased line
interconnection with the VSAT or VSAT hub. The VSAThub, however, need not be located in the service area
of the ISP.

Resources requiredfor operation of the services for extending them over to the network ofupstream service
provider (DoT/VSNL etc) or any other service providerlicensed by the Authority including time frame for
provision of the same,will be mutually agreed between the parties and shall be listed. The resourcesmay refer
to and include but not limited to physical junctions, PCM derivedchannels, private wires, leased lines, data
circuits other communicationelements. The licensee shall apply for and obtain the determined resourcesfrom
the concerned provider. The operation and charge of these resourcesis outside the scope of this licence
agreement. Licensor will have no obligationfor such resources. However, licensor may at any time during the
currencyof the licence, fix a time frame for provision of such resources by authorisedproviders in consultation
with all concerned parties, with a view onlyto help the ISP licensees for faster provision of service to
customers.No legal right against the licensor shall accrue to the licensee in thisregard due to delay or
non-provision of resources.

2.9 DELIVERY OFTHE SERVICE :

The LICENSEE shallbe responsible for installation, testing and commissioning of all the equipmentto provide
the SERVICE including connectivity to DoT's DIAS or VSNL's GIASfor delivery of Internet traffic.

The licensee shallprovide service within l8 months from the date of signing of thelicence agreement which will
be the effective date of licence unless theextension of implementation time is duly approved by Telecom
Authorityfor reasons to be recorded in writing. Commissioning of service will meanproviding commercial
service to customers.

2.11 EXTENSIONOF LICENCE:

The validity of licenceis initially for a period of ten years unless otherwise terminated. Ifrequested by the
licensee, extension may be granted by the TELECOM AUTHORITYon suitable terms and conditions for a
period of five years or more ata time. The decision of the TELECOM AUTHORITY shall be final in this regard.

3.0 TECHNICALREQUIREMENTS:

Private ISPs shalluse IP ( Internet Protocol) and shall meet the technical requirements ofthe Internet Service
Providers (DoT/MTNL/VSNL/other ISPs) to which it isconnected. The equipment used by the Private ISP shall
be in conformancewith the Interface/Protocol requirements as applicable. Some of the Interfacesrequired are
given below :

InterfaceRequirements

(i)Subscriber Access

* 2 wire accessover PSTN for Modem interface
* ISDN BRI and PRIinterface
* 64K, Nx64K or2.048 Mb/s, Nx2.048 Mb/s leased lines
* Frame Relay interface

(ii)Network Interface


* X.25 interface
* Frame Relay
* ATM
* G.703
* PRI, BRI interface

ProtocolRequirements

(i)Network Protocol

* IP

(ii)Routing Protocol

* As per requirementsof IAP & ISP
* IP : RIP, RIP2,OSPF, BGP4 / CIDR

(iii)WAN Protocol

* Point to PointProtocol (PPP) support for PAP & CHAP
authentication over the PPP Link

* Any other as perrequirements of IAP & ISP

Protocolssupporting voice over internet shall not be permitted.

3.1 QUALITYOF SERVICE: The quality of service over internet is not establishedand defined as yet. As such,
the QUALITY OF SERVICE is not being definedfor the time being. However, it may be defined at a later date
based onthe experience gained in the operation of the service in the interest ofthe customers.

TELECOM AUTHORITYreserves the right to carry out performance tests and also define the QUALITYOF
SERVICE parameters on licensee's network at any time during the currencyof licence. It will be mandatory for
the Licensee to comply with such parametersof Quality of Service as and when prescribed by the Telecom
Authority.

3.2 Voice overInternet:

Voice over Internetis not permitted. The licence will be liable for termination for any violation.The licensee will
not take any measure which amounts to abetment of carriageof voice over Internet. The licensee shall also take
measures on his ownand as and when directed by the Government at his own cost to bar carriageof voice over
Internet.

3.3 Obscene materialand applicability of Cyber laws :

Flow of obscene,objectionable, unauthorised or any other content infringing copy-rights,intellectual property
right and international & domestic Cyber lawsin any form over the ISP's network is not permitted and the ISP is
supposedto take such measures as to prevent it. Any damages/claim arising out ofdefault on the part of the
licensee in this respect shall be the sole responsibilityof the licensee.

3.4 IP Address,Domain name :

It will be responsibilityof the licensee to obtain IP address, domain name etc. from the competentauthority. In
case the IP addresses are taken from the Department of Telecommunications,the same are non-portable and
have to be returned to DoT at the terminationof connectivity contract.

4.0 FINANCIALCONDITIONS

4.1QUANTUM OF LICENCE FEE AND SCHEDULE OF PAYMENTS

(i) The licence feeis waived for a period of five years upto 31.3.2003. The licence fee tobe paid relating to
period starting from 1.4.2003 by the licensee companyshall be intimated on or before 1.4.2001 and shall be
payable irrespectiveof the time of entry of an ISP. Therefore, for all those ISPs also whoobtain licences prior to
31.3.2003, licence fee will become payable witheffect from 1.4.2003. The Licence Fee shall be paid in
advance on yearlybasis on or before the date when it becomes due.

(ii) The beginningof the period of one year for the purpose of recovery of Licence fee willbe reckoned from the
effective date of the licence agreement.

(iii) For accessand other charges including MODEM charges payable to the DOT/MTNL/VSNL/otherservice
provider at the prescribed rates, bills will be raised directlyby the DOT/MTNL/VSNL/other service provider and
shall be a matter betweenthe Licensee and such service provider(s).

(iv) In case of paymentsover due to the Licensor, an interest will be charged at the highest commerciallending
rate of the state bank of India applicable on the date on whichthe payment becomes due. This will be
compounded on monthly basis.

4.2 The authorityreserves the right to review and fix the licence fee at it's discretion,except for the initial period
upto 31.3.2003, at any time during the validityof the licence, which shall be final and binding on the licensee .

4.3 PERFORMANCEBANK GUARANTEE (PBG):

A performance bankguarantee of Rs 2.00 crores for category 'A' Service area, Rs. 20.00 lakhsfor each
category 'B' service area and Rs. 3.00 lakhs for each category'C' service area valid for two years from any
Scheduled Bank in the prescribedform ( Annexure I, Schedule 'D' of the draft Licence Agreement) shall
besubmitted alongwith the application for each service area. The licenseecompany will be liable to extend the
validity of the Performance Bank Guaranteetwo months prior to its date of expiry on its own without demand
from theLicensor for a further period of one year on year to year basis. On anyfailure to do so, the performance
bank guarantee will be encashed withoutgiving any notice. This is without prejudice to any other action that
maybe taken under the terms and conditions of the licence.

4.4 FINANCIALBANK GUARANTEE (FBG):

The licensee shallsubmit a financial bank guarantee of an amount commensurate with the annuallicence fee of
the licensed service area(s) separately for each servicearea in the format as given in Annexure II, Schedule 'D'
of the draft LicenceAgreement at least 60 days prior to start of the year for which the licencefee is payable. The
LICENSEE shall submit the Financial Bank Guaranteefrom any Scheduled Bank, to be renewed from time to
time and initiallyvalid for a period of two years

The company willbe liable to extend the validity of the financial Bank Guarantee two monthsprior to its date of
expiry on its own without demand from the Licensorfor a further period of one year on year to year basis. On
any failureto do so, the financial bank guarantee will be encashed without givingany notice. This is without
prejudice to any other action that may be takenunder the terms and conditions of the licence.

4.5 Tariff -ISPs will be free to fix their own tariff. The tariff shall be left opento be decided by market forces.
However, the TRAI ( Telecom RegulatoryAuthority of India) may review and fix a tariff at any time during
thevalidity of the licence which shall be binding on the Licensee .