Killer DoT

Before continuing with this particular article, I must first state that the views and opinions that follow are strictly my own, and that the PCQ management may not necessarily endorse them (though I sincerely hope that it does).

A bolt from the blue

A month back, I received a VERY disturbing e-mail message from the sysop of one of the BBSs we have running in India. It said, and I quote :

"One of the main things that got me writing to you is about the apparent new policy of DOT. From the papers and from people talking, it seems that DOT has specifically mentioned BBS as one of the items to which one would have to get approval for and then pay some ridiculous fees like Rs. 15 Lakhs and give them Rs.1,000 per user etc. etc. What do you make of this and what is your gut feeling on this issue? I thought with Mr.Vittal's entry into the DOT things would get better! He sure is one dynamic man and with a very clear vision of the future, hence this short-sited view and back-to-Licence-Raj kind of surprised me. Would like to hear your views."

Over the next few weeks, I received dozens of messages from other people who have also heard the same thing, and have also read things about this in various newspapers. I also heard that one BBS in a metro has decided to shut down because of this threat.

Then, the final blow : I received a message from a lady working for an American megacorp, whose company was planning to do business with India but was now reconsidering its stand based on this proposed policy. She wanted me to confirm that such a policy really existed. She wasn't really interested in the BBS part of it, but said, and again I quote :

"What really troubles us is this - if your government can even think of doing something like this, what other surprizes is it capable of springing on people ? Does it [the Indian government] not realize that the advanced state of information technology in our own country [the USA] owes a lot to the free flow of information that passes through services such as BBSs ? Does it not realize that we [the Americans] would hesitate to do business with a country that does not have a healthy communication culture that operates at grass-root levels, the way BBSs do ?"

She was echoing my very thoughts.

But let me get things into perspective.

The "Policy"

First of all, at the time of writing, the government has not YET announced any policy that proposes to tax BBS operators with license fees. But it HAS indicated that it has identified BBSs as "value added services" that should be taxed, in a fashion similar to the idiotic way they tax Fax operators.

Apparantly, the method of taxing is going to be double-edged.

First of all, the BBS operator will have to pay a license fee. It isn't likely to be to the tune of 15 lakhs, but indications are that a figure like Rs.30,000 to Rs.1,00,000 is being played around with.

Secondly, the operator will be asked to pay an amount per user-account that his BBS handles. The figure that is streaking across some greedy government-walla's mind seems to be Rs.100 to Rs.1000 per account.

Ergo, supposing a BBS has 200 accounts (not all of which may be active), then the operator will have to get a license, pay upto Rs.1,00,000 for it, then cough up upto Rs.1,000 per account, or, in the case of this example, another Rs.2,00,000.

Naturally the BBS operator isn't going to pay these amounts out of his own pocket. He will ask his users to "share" the costs - over and above the small fee that most BBSs usually charge for access.

This will put the cost of BBSing into a realm out of reach for most people interested in communication of this sort, resulting in the death of a concept.

The real costs

Remember that most BBSs charge only enough to cover their own costs. Typically, this is a small amount per online hour (ranging between Rs.30 to Rs.100 per hour, depending what services are offered), plus in some cases a small contribution towards equipment costs (between Rs.100 to Rs.1000 - again dependant on what facilities are offered).

Also consider the fact that most BBS run on expensive equipment. A single line BBS usually needs a 80286 PC with at least 80MB hard disk, plus at least a 2400 bps modem. This totals to about Rs.50,000. Add to this the cost of "locking up" a phone line, and you will soon realise that the small amounts asked for barely cover the costs of the operator.

Finally, ALL BBSs running in India today are on an amateur basis, i.e. they are NOT being run by people who treat it as a full time job. I run a BBS, but that is not my main job. I spend about an hour or two a day maintaining it, but my real job is software development, writing articles and doing consultancy work.

What do we stand to lose ?

Consider for a moment just what is at stake here.

BBSs in India today are what the government has repeatedly promised us, but has been unable to give us because it has been too busy with elections and "dollar hunting" - a cheap and reliable way of electronic communication that allows a rapid exchange of ideas and knowledge.

Let's look at a few examples:

A guy in Bombay had major problems with some modems he had bought a while back. He had repeatedly asked the manufacturer for help, but was getting nowhere.

Hearing about my BBS, he logged in and posted a query in our COM forum. As luck would have it, one of the Bangalore engineers of the modem manufacturer was also a member, and she read this message. Not her problem - right ? Wrong. Ms.C. knew what to do to resolve the issue, and a few messages later, the Bombay man's problem was solved. Result ? Smiles all around.

Or take the example of a guy who developed a small phonebook utility. He didn't have the resources to market it, nor did he think that he could. But he posted the utility on a Bombay BBS, from where it eventually found its way to other BBSs, including mine.

Today, hundreds of people across the country use this free utility, and someone's career may have just taken off.

And there is the case of the stolen hard disk. Someone had his hard disk stolen in Delhi. He spread the word through one of the BBSs. I do not know whether he got the hard disk back, but the message thread that followed the original message brought to light a number of ways one can use to protect oneself against things like this. For example, did you know that ALL IDE hard disks have a unique, unalterable serial number in ROM that can be queried by software, and that this serial number can be used to identify stolen goods if they are offered to you ?

If, all of a sudden, such free flow of information was to disappear into the tangle of red tape and licensing, then we would all be stranded.

When I wrote my first article for PCQ in January '93, few people knew what modems were and how they could be useful. Today, less than a year later, thousands of people across the country use modems as an integral part of their work. And most of them have had their first taste of computer communication by logging into a BBS - and liked it.

Just plain greedy

What prompts the DoT to even consider another License-Raj of this sort ? To me, it looks like plain, old-fashioned, callous greed.

It isn't that the DoT loses money when someone operates a BBS, for which it must be compensated. Everyone who uses a BBS pays his phone bill. Nowadays, even local calls are timed, and one new call is charged every 3 minutes. When a user calls into a BBS across the country, he pays STD charges.

All modem users have to pay the DoT for the use of modems on P&T lines, at the rate of Rs.1,800 per modem.

And every BBS user and operator has paid Rs.3,000 to Rs.30,000 for his phone connection.

And all citizens are expected to pay taxes, which are supposedly used for sustenance of public utilities (like the telephone department, for example).

All these are earnings, but it seems the DoT wants more. Much more. And it doesn't care if it kills the entire information industry in India in its quest for more money.

Being rational

If the government WANTS to show some degree of reason, then it should think twice before slamming such a TechnoHorror onto BBS operators.

If it thinks that it should get a "share of the profits", then it should only consider taxing such setups that cross a particular slab of NET BBS-oriented profits, the way excise duty or income tax is levied. And this slab better be in the range of Rs.10 lakhs or above. This way, it gives the "small" guys a chance to survive, and letting the industry grow in the way God intended.

If it tries to do something like the Fax-operator levy of Rs.30,000, irrespective of whether the operator is even earning enough profits to justify this, then we will very quickly see many modem lights blinking off, the telephone lines getting very quiet, the industry grinding to a halt, computers getting isolated and useless, and international interest in business with India disappearing.

Your move, Mr.Vittal

I am sure that Mr.Vittal is not going to take very kindly to this article. If he has anything to say (provided that he even reads industry mags like this one), then an open letter in this magazine, clarifying the proposed DoT policy, would really be welcome. Even more welcome would be a flat statement that says that BBSs are tax free, just like $$$ earnings and election campaign contributions, because of their benefitial effects.

Do YOU have anything to say ? Do it ! What do you think ? Send Mr.Vittal a letter, and tell him. If you are one of the many people in the USA or Europe who read this magazine, write to the Indian Government telling them how important a healthy communication culture is deemed by those who are considering business with India.

Unfortunately, I cannot give you Mr.Vittal's e-mail address - I doubt if he even has one. Strange, considering that I can even send E-Mail to B.Clinton, Inhabitant, White House, Washington DC, USA, telling him what I think of the cost of his haircuts. Obviously, he cares to know what the people think.

And he doesn't tax BBSs, either.

Contents Copyright (c) 1993, 1994 by Atul Chitnis. All rights reserved.

First published by the PC Quest magazine. For more information, please contact

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