ISPAI revives ISP Internet exchange plan

NEW DELHI: The Internet Service Providers Association (ISPAI) has taken up the issue of setting up an Internet exchange for ISPs in the country for peering services. The proposal, which has been lingering on for the last two years is expected to see the light of day this time "since the regulator and MIT has also shown an interest in the issue as an infrastructure related cause," informed Amitabh Singhal, Secretary, ISPAI.

The Association has recently submitted a proposal to both the entities seeking support to realize the venture. One of the supports sought includes a possible grant of some funds to kick-start the initiative. The exchange is expected to need an investment to the tune of Rs 5 crore. While ISPs are expected to pitch in terms of membership fee and connectivity charges, this would only cover operational costs and would not be sufficient to cover capital expenditure.

The need for an ISP exchange has become increasingly imperative since VSNL, the dominant ISP and international service provider stopped peering service with other ISPs. As a result even for domestic traffic, subscribers of other ISPs have to go to the US to access a local server increasing operating costs of ISPs many times over. Under the circumstances, Indian ISPs have no option but to expedite the process of a bandwidth exchange within the country to share traffic within each other’s network.

The earlier proposal was floated by US-based Band X, an international bandwidth exchange provider, which set up operations in the country about two years ago. However, as the Internet bubble burst and the economy went through a bad phase, the company also suffered reverses with its activities in the Indian sub-continent slowing down. And the proposal of a bandwidth exchange for ISPs was quietly laid to rest.

The industry has been facing a bad time of late with accumulated losses to the tune of Rs 1,200 crore since 1995. As ISPs waged a price war in a bid to gain more market share, retail customers did not live up to the tizzy expectations of service providers. Things came to such a pass that the service provider was providing connectivity to the retail customer at prices lower than his cost of operations.