Who can light fibre in India?
Friend and his two homes…
Recently, a friend of mine mentioned his plan to procure dark fibre to connect two of his homes. His idea was straightforward - get LCO to give a dark strand between both homes and run Bidi optics over it. I ended up telling him that while his idea is technically fine, as modern optics can easily cover that sort of distance, it would be illegal as per Indian telecom laws!
It wasn’t just him, but numerous content players, hosting companies, and Cloud players find it a bit odd when they find this out. In this post, I will document what is allowed and what is not allowed.
Advance warning: I am a technical person & do not know much about regulatory. Whatever I am sharing here is what I have learned from my friends who have expertise in the subject. Indian telecom rules are overly complex and can have a different set of interpretations, and often go into the grey area. I welcome readers to share feedback if they are aware of something which isn’t correct as per the regulation. With that warning out of the way, I will proceed with the post.
Understanding licensing
In India, when fibre is going outside of a given building, one needs to have a license to light it. In fact, not just “lighting up a dark fibre” but to deploy and resell dark fibre, one needs a license (IP-1). Infrastructure Provider Category 1 (or IP-1) is considered an easy license which can be used to sell passive assets such as dark fibre, ducts, towers, etc. Active infra i.e lighting up fibre, is not allowed under this license, and it’s expected that an IP-1 holder leases their dark fibre only to a license holder who is authorised to light the fibre. Within a building, campus, datacenter, home etc one can deploy a light fibre but as soon as it goes outside of that it becomes a bit of a grey area depending on the use case.
An Internet Service Provider (ISP) holding an ISP license or Unified License with ISP authorisation can light fibre but only for two specific purposes:
- Offering internet drop to the end user (quite obvious)
- Their own backhaul connectivity between routers, switches, OLTs, etc located anywhere within their authorisation area
While this looks quite straightforward, it specifically excludes point-to-point connectivity. An ISP cannot offer point-to-point connectivity under its license. So for my friend’s use case - he cannot buy a point-to-point link using any technology (MPLS, layer 2 VLAN, DWDM wavelength or dark fibre strands) from the ISP as the ISP under the ISP license is not authorised to sell those. But funny enough if the same ISP sells him “internet drop” under ISP license and two routers (outside of core ISP business) and “helps” in setting VPN over the public internet, it’s largely legal because from ISP and DoT’s point of view this is an internet product. About #2 - For a long time ISPs could not procure dark fibre and make use of it because they could not make full use of the capacity. They could not light it with say DWDM & resell wavelengths. However recently it was clarified that an ISP can sell capacity to other licensed ISPs only (not end non-licensed customers). When researching I found some friends not being aware of it as well as some calling it a grey area rule.
Access License & NLD
An Access license in India for selling circuits. It allows many things including selling p2p circuits, voice, mobile, etc. Many networks use an access license along with NLD (National Long Distance) which allows these services across India. It’s a vast license due to involvement of voice and mobile permissions but for the context of this post - it’s the ultimate license needed by players to do things without going into the grey area.
Debate on captive
I have heard of different opinions around captive traffic. An ISP friend of mine who has expertise in regulation (and doesn’t want to be named in this post) recently bid for a government contract. A project where the goal was to offer dark fibre to one department of the government. He had an ISP license while the government department that was taking fibre had no license. Their end goal was to connect to their own infra. This raised some concerns from other bidders. For now it’s unclear and I guess subject to interpretation on whether someone can light fibre for their captive use or not when the end product itself does not resell the capacity. Most large projects end up taking NLD and access licenses anyway because they intend to sell excess capacity. Thus networks like Railtel (by Indian Railway), Oil India, Powergrid Corp, etc all take NLD license to have legal ability to light fibre for their own use as well as to resell excess capacity. Industry-wide I hear that private players taking dark fibre and lighting it themselves is absolutely not allowed while for the government. bodies it remains a grey area.
Cloud and content players
Modern cloud and content players are major users of dark fibres, especially within metros. Hyperscalars like Amazon AWS, Google Cloud and Microsoft Azure deploy their infra in three datacenters in a given region & these have to be technically connected with dark fibre. There’s massive East-West traffic due to replication, high availability & many other reasons. In the majority of markets these companies can procure dark fibre between their datacenters and light it themselves but in India they cannot. In India, it’s a known case that they get external license-holding players to light fibre for them. In most of these cases hyperscalars work very closely with those players, they define network topology, hardware, configs etc but ultimately someone else executes it for them. Most of the Cloud players will never take a telecom license (ISP, access, NLD, ILD etc) in India simply because then they would be subject to many of the telecom-related rules and regulations. That brings business, security and many concerns. Take e.g the long over-discussed AGR case. If any of the Cloud players had a license, under older terms their compute, storage (and just anything) revenue would be subject to AGR / license fees. In a way, it’s good that Cloud players work well without a license as that keeps things simple. The fact that they cannot light fibre themselves is a drawback of our Indian licensing system and should be fixed. In most other markets including the US, UK, Germany, Singapore etc - lighting of fibre does not need a license.
Status of datacenters
Over time datacenters have taken an NLD license. List includes but is not limited to NTT Netmagic, Yotta, Ctrls etc. This is mostly because these players have multiple datacenters in a given area, and they want to connect and resell lit services. They can in theory do without NLD by using IP-1 and then reselling dark fibre strands only but that does not scale up, plus their customers who are buying would need to have a license to light the fibre.
Old and outdated ideas around regulation
Most of these ideas around licensing in the fixed-line market do not make sense anymore, simply because everything runs on fibre and fibre is not a scarce resource. ISP license somewhat makes sense (excluding the AGR part) because there is a requirement of URL filtering, CGNAT logging, etc., but outside of that, it’s largely an inflated set of rules. On the access side, the requirement of a license to light fibre simply promotes more rent-seeking behaviour instead of cleaner, competitive and optimised deployments. AGR on fixedline (and probably mobile telephony) also doesn’t make sense. In case of fixed line, the network runs on optical fibre which is laid by vendors who pay Rights of Way (RoW) to municipalities, State and central government (whichever road they use). There is taxation in the form of GST in the system on top of RoW. So the AGR on top doesn’t make sense as bits are not flowing over any scarce resource. It’s largely over privately built infrastructure, for which RoW and GST are already being paid.
With those thoughts I think my friend needs an access license to connect his homes and his LCO (or ISP who actually runs it) needs a IP-1 license to legally re-sell him dark fibre. 😀
Disclaimer: This is my personal blog, and hence, posts made here are in my personal capacity. These do not represent the views of my employer.