Internet services are viewed as one of the first sectors in Vietnam that would be opened up to competition as the country integrates with the world. However, the Circular No. 04/2001/TT-TCBD, issued by the General Department of Post and Communications Post Department, guiding the implementation of Decree No. 55/2001/ND-CP is contrary to this observation.
The circular regulates that Internet exchange providers (IXP) must lease data transmission channels from Vietnam Telecommunications International (VTI)-a subsidiary of Vietnam Post and Telecommunications Corp, which is under the DGPT- if they wish to establish an international Internet connection. Questions are raised whether this requirement is a guise to maintain the monopoly held by DGPT’s commercial arms.
Many businesses wanting to become IXPs complained that charges for hiring transmission lines from VTI is too high. The charge for a 2MBps channel from VTI is about US$60,000 per month, which is 7-10 times higher than charges paid by regional telecom businesses. This charge does not include other fees such as connection to foreign leased lines, Internet websites, and costs of hiring intranet lines connecting to VTI.
That explains why only Vietnam Datacommunication Centre (VDC)-another subsidiary of DGPT-can afford to hire online international Internet channels as VDC is given commercial preferences by its parent corporation. However, even VDC has admitted that the regulations contained in Circular 04 are restricting the development of IXP businesses.
If IXPs didn’t get assistance in terms of legal frameworks, apart from the high charges for hiring transmission channels, they would have to establish their own data transmission channels. That seems to be more difficult than hiring a channel because they have to get permit from DGPT. So far, only VTI has been allowed to establish international gateways.
Another obstruction in the circular for would be IXPs is the requirement that any firm must have at least two years prior experience before a license can be issued. Many firms wanting to become IXPs say this requirement is not necessary because they are already well prepared to enter the market.
If DGPT doesn’t rescind the restrictive regulations, new IXPs will not have an affect on the current high Internet charges, shoddy service and achingly slow connection speed. The aim of building up Vietnam’s Internet service to equal the high quality available in regional countries seems a distant dream.