The Telecom Commission has rejected a proposal from the Telecom Regulatory Authority of India to impose an annual licence fee of 8 per cent on internet service providers (ISPs), as the move will result in a hike in internet charges and tariffs. It is of the view that such a fee would impact the Digital India project to provide internet connectivity in the rural areas of the country.

The government levies a licence fee on the adjusted gross revenue (AGR) of telecom operators, after removing some components that are not earned from their telecom services. Meanwhile, the regulator  had suggested that a uniform licence fee of 8 per cent of the AGR for all ISPs and internet telephony licences be levied. However, prior to the imposition, TRAI suggested a new definition of AGR of ISPs on which the government should impose an 8 per cent annual fee.