Centre, ISPs to set up Internet exchange

The country's key Internet service providers and the Centre are forming a joint venture company to start an Internet exchange in the country. This move will bring down the cost of operations for the service providers and surfing cost for the customers.

The company, which will be known as the National Internet Exchange of India, will be formed under Section 25 of the Companies Law and will become operational by July.

The Internet exchange will facilitate the exchange of Internet traffic between service providers. It will also allow service providers to route the traffic with one another within the country. This would result in faster and easier surfing of the Net.

For instance, if you are a subscriber of an Indian service provider and want to access any other Indian website, the traffic is at present routed through international carriers, taken to severs kept in the US and then brought back to the country.

Through the exchange, Indian websites will be linked to each other, resulting in faster access. For the service providers, this will mean reducing international bandwidth costs.

However, the Internet exchange is facing some problems with the country's largest service provider, Videsh Sanchar Nigam Ltd, not agreeing to be party to the joint initiative.

Industry sources said VSNL, which was an international long-distance telecommunications traffic carrier, would stand to lose out on revenues from selling bandwidth to other service providers, if the joint venture materialises.

VSNL has arrangements for bandwidth with large international carriers for its international long distance services. Therefore, joining the venture does not give it any major benefits. Industry sources, however, added that since the project was being backed by the government, VSNL might be coaxed to join at a later stage.

According to government sources, as per the structure of the new company, the government will provide the initial seed money for the venture, and then the revenues generated from traffic routing will take the company forward.

The department of information technology, is expected to provide an initial seed money of about Rs 5 crore to the project. The Internet exchange will have an executive board, with seven members from ministries, regulators, industry associations and academicians.

As per the initial proposals, the Internet exchange will have four exchange points at Delhi, Mumbai, Kolkata and Chennai.

These locations will be interconnected for enabling the routing of inter-Internet service providers' traffic only and will not carry any intra- Internet service provider traffic.