Standing Committee reiterates the need to encourage use of BharatNet Infrastructure

It is one thing to have an optical fiber infrastructure across the country even in the remotest corners, but another thing to ensure that this infrastructure is properly utilized. The Standing Committee looking into the BharatNet project has highlighted & reiterated the need to encourage TSPs, ISPs and other players to use this infrastructure.

In the earlier story on Standing Committee’s Action Taken Report on BharatNet, we discussed those recommendations where the Standing Committee did not accept the action taken response by the government. Apart from these 6 recommendations, there were another 15 recommendations made by the Standing Committee in its 50th Report – ‘Progress of Implementation of BharatNet’. Of these, 10 of the recommendations were accepted by the Government and action wherever necessary was taken. The Standing Committee did not seek any clarification on the response of the government regarding these recommendations. There were 5 more recommendations for which the replies of the government were of interim nature.

In this story, we take a look at these key recommendations of the Standing Committee and the response provided by the government.

Committee observed that fiber network has not reached most of the Gram Panchayats

The second observation of the Standing Committee was regarding the implementation of the project under Phase -I. The committee observed that while the Optical fiber cable (OFC) has reached State, Districts and Block Headquarters, it has not yet been extended to most of the Gram Panchayats (GPs).

Nearly 92% of the 6,442 Blocks have OFC connectivity with 395 Blocks (NE States, Himachal Pradesh, J&K, and Jharkhand) not having any OFC connectivity.
Most of the OFC laid by Private Telecom Service providers (TSPs) is in Urban & Semi-Urban areas.

Further, the committee observed that the department did not have the far-sightedness regarding the implementation in spite of the magnitude of the project. (Laying of 6.5 lakh Km of Optical Fibre, with the next biggest being the 2 Lakh KM being laid by Broadband Network in Australia). This has affected all the aspects of the project, leading to the delays and missing deadlines.

Reply of the Government

The government highlighted the following challenges which led to the implementation delays of this large-scale project, which had a target of laying around 2.2 lakh KM of OFC in 1 lakh GPs under Phase -1.

Involvement of multiple agencies – DoT, BBNL, CPSEs, Central & State Agencies, contractors etc.
Challenges in awarding contracts for geographical areas with complex terrain.
Delays with Right of Way (RoW) permissions from different departments and state governments.
Unavailability of Gram panchayat Building in few of the states.

The first phase to cover 1 lakh GPs was completed in December 2017. As per the latest update on 04 January 2019,

Pipeline was laid in 48% of the GPs.
Cable is laid in 48% of GPs
Service is made available in 46% of the total number of GPs

Based on the observations of Standing Committee regarding the delays in implementation and the overall handling of the project, a mechanism was put in place to ensure the momentum and pace of the project is sustained.

State Level Implementation Committees formed in all the 8 states under State Led Model
Implementation committee formed under CGM BSNL in all the states where BSNL is implementing the project
Steering Committee (under Administrator USOF) formed for monitoring the project and resolving issues with all implementing agencies
Control room is set up in BBNL corporate office specifically for this project. Regular project reviews with State Heads of BBNL & CPSUs
Appointment of Nodal Officer specifically to deal with ROW permissions
Establishment of Empowered Committee
Regular review meetings at Minister and Secretary levels

The Committee did not seek any clarification for this response provided by the government.

Utilization of the Infrastructure & need for faster implementation among other observations

Apart from its observation on the delay in the implementation of the project, the committee has also made recommendations and observations on other aspects related to the project – Implementation of Phase -II, Financing & Utilization of the funds, utilization of the infrastructure, performance of implementing agencies etc.

The government responded and provided an update for each of these recommendations/observations. The Standing Committee has taken cognizance of these responses by the government and has not sought any further clarifications. Here is a summary of these other recommendations/observations and the government’s response on the action taken.

Recommendation/Observation	Government’s Response
Implementation of Phase -II & Utilization of Funds: Implementation to be done through States, CPSUs & Private sector. A mix of media (OFC, Radio & Satellite) to be used for connecting GPs. Last mile connectivity through Wi-Fi or other suitable option. Based on experience of Phase-I, the costs may increase beyond the estimated ₹ 30.9 thousand crores. To ensure timely procurement and utilization of funds. Emphasis to be given to local youth to generate employment, especially in NE states, Uttarakhand, Himachal, J&K and other backward areas.	Project executed in 3 models: State Led Model – 8 States, CPSE Led Model – 10 States & Private-State Led – 2 States. 6407 GPs being connected through Satellite. Of this, 1407 through BSNL and the rest by BBNL through inviting of bids. Mechanism put in place to ensure timely completion of the process. Sufficient funds available for the project. Opportunities are being identified to provide employment, as the project needs a large number of skilled & semi-skilled resources.
The committee has observed that there would be a need of around ₹72 thousand crores for laying 17 lakh Km of OFC, with scope of further increase in the costs. Hence the committee has recommended identifying alternate sources of funding apart from the current funding being done through USOF.	As on 31/12/2018, around ₹ 47 thousand crores are available with USOF and these are sufficient for the on-going project.
CPSU Model The committee has observed that implementing of the project through 3 CPSUs (BSNL, RailTel & PGCIL) for Phase -I has not been satisfactory and it showed incompetence on their part in implementing the project. With only BSNL & PGCIL taking up implementation of Phase-II the committee hopes for better implementation.	In Phase -II, 10 States (56,105 GPS) are being implemented through CPSU Model. BSNL is allocated 8 States with 45,454 GPs & PGCIL is allocated 2 States – 8700 GPs. RailTel is not part of Phase-II due to its poor performance in Phase-I. BSNL’s performance in Phase-I has been the reason for its selection for implementing Phase-II, while PGCIL’s expertise in laying overhead OFC is being used for implementing the project in Himachal Pradesh & Uttarakhand. Provision of Penalty clause in place to ensure timely implementation of project.
Utilization of BharatNet by TSPs & BSNL The committee took cognizance of the below developments of utilizations of BharatNet Infrastructure by Telecom Service Providers (TSPs): TSPs committed to utilize BharatNet in 63 thousand GPs – Airtel (30,500), Reliance Jio (30,000), Vodafone (2,000) & Idea (1,000), especially for 4G/LTE services. Tariff to be kept low to encourage utilization Approximately ₹ 9.07 crores earned so far, with advances amounting to ₹ 17.85 crores. Airtel to apply for band width connectivity for 295 GPs, generating a revenue of ₹ 5.13 crores. Standing committee has noted that while these are welcome developments, the utilization is still very low compared to the capacity. Encouragement needs to be provided to ISPs, Cable TV operators, content providers etc. to launch services in rural areas. In respect to BSNL, the committee notes that: 1.15 lakh users are using BSNL services through BharatNet. BSNL provided more than 8 thousand FTTH connections, nearly 1.7 thousand Wi-Fi and anther 146 KM of fiber is being used. BSNL-BBNL currently following a 70-30 revenue sharing model. Committee asserts that BSNL has tremendous scope of provision and extending its services using BharatNet and that it needs to utilize the available infrastructure.	BBNL has initiated a Pan-India last mile connectivity tender. Conferences are being organized to educate and encourage TSPs, ISPs etc. of the available BharatNet infrastructure. Especially State wise conferences are being organized. Tender floated & opened in Oct’2018 for which there were 16 bidders for 42 packages. Advance Purchase Order (APO) issued to TCIL for – Uttarakhand, Bihar, Madhya Pradesh, Punjab, Haryana, Odisha & North East. CSC (Common Service Centre) given work to provide last mile connectivity to 25 thousand GPs in UP, all GPs in HP & Tripura, 3407 GPs in Karnataka. Rajasthan Government providing connectivity in all GPs in state. APO issued to TCIL for work in 61,593 GPs. Around 11 thousand GPs have been provided Wi-Fi connectivity. The utilization of BharatNet by BSNL as on 02 January 2019 Wi-Fi Hotspots: 1873 FTTH connections at GPs: 15,420 86,452 FTTH connections provided by BBNL for user experience & testing. 749.1 km of Fibre is being used by BSNL.
The committee is appraised that as per the modified implementation strategy, the project would become revenue neutral by March 2024 i.e. 5 years after the targeted completion of project. Bandwidth & Dark fibers are expected to be the main revenue stream after providing connectivity to 2.5 lakh GPs. BBNL envisages an increase in demand from TSPs, ISPs, MSOs, State & Central Government Depts etc. due to a push towards digitization. The committee has asked Department to come up with business strategy to earn revenue apart from the core target of providing connectivity.	The Operation & Maintenance support has been provisioned for 3 years post which the department envisions that the network would be self-sustainable through leasing of Dark Fibers to various service providers. The States under State-Led models have submitted utilization & business plans.
Phase -III The Committee has also made recommendations/observations on Phase-II of the project which relates to upgrading of the network to meet future requirements. One of the propositions is to lay underground OFC suitable for 5G services, Internet of Things etc. Further, the present linear design of Block to GPs might not be suitable for few service providers, for which NOFN has suggested laying of fresh OFC. However, Phase-III was not part of Cabinet note at the end of 2017, for which Committee expressed its dismay as Phase-III is expected to be potentially bigger compared to the first two phases.	The department has updated that it would take up actions like – survey, planning, design & developing implementation strategy post the approval of Phase -III by government.

Standing Committee has flagged the action taken by government as interim in nature for five of its recommendations

Out of the 21 recommendations, the responses for action taken by the government regarding five of them have been categorized as interim in nature by the standing Committee. These recommendations/observations made by the Standing Committee were mostly regarding Works in Progress or aspects which are yet to be actioned. The department has appraised them of the latest updates.

The committee has not sought further information since it seems to have been satisfied by the interim response provided. These observations were regarding:

Performance of PGCIL during Phase -I and the rationale of using their services in Phase-II. The department has updated about the relative expertise of PGCIL in laying overhead OFC and the utilization of services in Himachal Pradesh & Uttarakhand.
Update on Private sector participation for the project in two States – Punjab & Bihar.

Provision of connectivity through Satellites for states like – J&K, Uttarakhand, Himachal Pradesh & North-Eastern States where there are challenges in the implementation due to topography.

BharatNet has been successfully implemented in – Kerala, Karnataka, Chandigarh, Puducherry, Haryana & Rajasthan. Hence, the committee has opined that the focus now needs to be on encouraging usage of the infrastructure, especially by the respective States/UTs. The department has stated that an MoU is being proposed with all the States to use the infrastructure in their respective departments and to connect the government institutions at GP level.

The committee was also appraised about the reorganization of BBNL, which was constituted specifically to oversee the establishment, implementation and maintenance of BharatNet.

Featured Image: BharatNet Infrastructure