National security, ha'ah!

RATIONAL EXPECTATIONS

Luckily for it, the NDA was caught napping when the Kargil intrusion took place, because had it been aware of what was happening, one shudders to think of its response. It would have been swift, no doubt, but beyond that?

Two weeks ago, telecom and disinvestment minister Arun Shourie reportedly blocked a Cabinet clearance to allow Jet Airways to fly international routes on grounds of security concerns "" this, of course, was a continuation of Shourie's earlier public stance on Jet Airways, where he's quoted intelligence bureau (IB) reports to support his view.

Yet, a week later, the same IB, under home minister L K Advani, clears Jet's forays abroad! What's happening, is Jet a security threat, or is it just business rivalries that are being dressed up as security concerns?

The same week the IB was persuaded to change its view on Jet (or was ignored), interestingly, the government got the IB chief to take part in a meeting in Mumbai to examine whether a bear cartel was actually hammering the shares of the six PSUs whose shares were being sold by Shourie's ministry!

Interestingly, the same security angle is also being trotted out as an explanation for the government's inexplicable policies on VSATs, that satellite-based communication system that offers high speed broadband wireless connectivity to the remotest areas in the country.

Yes, believe it or not, VSAT providers in India are not allowed to use foreign satellites (there are 15 foreign satellites with excess capacity stationed around India at the moment, and their costs are at least a third less than the local ones) on the grounds, never explicitly stated though, of national security.

The argument is that since these foreign satellites will communicate directly with VSATs in any part of the country, this should not be allowed.

Well, the fact is that the base stations of the VSAT companies can be monitored by the IB, the RAW, whoever "" there are two monitoring stations in Hasan (near Bangalore) and Sikandrabad (near Agra) set up precisely for this.

In any case, both Internet service providers and international long-distance telecom service players have been allowed to connect directly to foreign satellites, so why shouldn't VSATs, more so since the local satellites' capacity is in any case full-up, particularly in the more efficient Ku band?

Even while using Indian satellites built by ISRO, by the way, all manner of strange restrictions are put on VSAT providers. Till a couple of years ago, they were allowed to transmit data only at speeds up to 64 kbps, when even a child could have told you that higher transmission speeds would benefit all concerned.

Indeed, well after telecom firms like Spectranet, Bharti and Reliance started putting fibre into the ground and giving users much higher speeds, the telecom regulator, the Trai, allowed VSATs to transmit at higher data speeds of 512 kbps.

Fourteen months ago, on December 10, 2002, the Trai recommended increasing this to 2 Mbps, but the government is yet to allow this. Indeed, till the Trai allowed it in 1999, transmission was not allowed on the Ku frequency even though it is well known that this dramatically brings down the cost as well as size of transmission equipment.

The reason for all the restrictions, you guessed it, is perhaps not as much national security, as it is commercial interests. Today, the existing INSAT range of satellites all operate on what's called the 45dB range of broadcast while the foreign ones like Europestar and PAS-10 operate in the 51-54dB range "" stripped of the technical jargon, each time the communication speed increases by three decibels (dB), its strength doubles.

And that means the cost of the ground equipment needed to receive signals from the satellite also reduces dramatically. Today, while international prices for 51-54dB transponders have fallen to around $750,000 per annum, prices on 45-47dB INSAT transponders are a million dollars. Indeed, with competition effectively shut out, INSAT transponder charges have remained constant over the past decade!

But what's so important about VSATs is the obvious question that readers should be asking right about now. Okay, they allow high-speed broadband access without the need to lay tens of thousands of kilometres of optic fibre cable into the ground, but so what?

Eventually, it is obvious, it all boils down to what is the impact of a broadband communication infrastructure on the economy. According to consulting firm Gartner Inc, broadband infrastructure is likely to lead to a $500 billion incremental increase in US GDP annually for the next ten years, and this will be driven through increased efficiencies in business processes, teleworking, e-governance and so on.

Indeed, data from the US and various European countries show that while labour productivity has gone up 2-2.5 per cent in the last six to seven years, the contribution of ICT investments like those in telephones and the Internet have been around 0.5-1 per cent "" that is, ICT investments are responsible for around 25 per cent of the hike in labour product ivity in OECD countries.

Apply this to the Indian economy, and the value of incremental GDP is truly phenomenal. All of which, needless to say, is being held hostage to unexplained flip flops in what's loosely called national security policy.

suniljain@business-standard.com