Nepal Faces Nationwide Internet Outage Amid Payment Disagreement

Nepal Faces Nationwide Internet Outage Amid Payment Disagreement

Many Nepali residents are experiencing internet outages because of a disagreement over payments between local internet service providers (ISPs) and Indian suppliers who provide them with internet capacity. This has caused disorder in Nepal's internet system, leading to widespread frustration and disconnection since Thursday evening.

The crux of the issue lies in a disagreement over foreign exchange. The Ministry of Communication and Information Technology (MoCIT) has been withholding approval for ISPs to access foreign currency needed to pay for international internet bandwidth from Indian companies. This action is a result of ISPs owing outstanding royalties and internet maintenance fees (RTDF). However, the Ministry's attempt to collect these fees has backfired, causing a nationwide internet outage.

Faced with delayed payments, Indian upstream service providers like Airtel have stopped supplying bandwidth altogether. This has significantly impacted major ISPs like Worldlink, Subisu, Vianet, and CG Net. While alternative providers exist, their capacity is insufficient, resulting in slow internet speeds for many users.

The current situation is not a recent development. Indian suppliers have been urging Nepali ISPs to resolve their financial obligations for nearly a year. The Nepal Telecommunication Authority (NTA) has also cautioned the Ministry of Communication and Information Technology (MoCIT) about the possible repercussions of withholding foreign currency. Regrettably, the Ministry's insistence on receiving contested fees prior to enabling ISPs to meet their global responsibilities has resulted in significant negative outcomes.

The timing of the disruption couldn't be worse. It coincides with Nepal's National Information and Communication Technology Day, highlighting the nation's dependence on a vulnerable internet infrastructure. Estimates suggest over 7 million internet users are affected, disrupting businesses, education, and communication across the country.

As expected, blame is being cast. The Association of Internet Service Providers (ISPAN) accuses MoCIT of triggering the crisis with its "immature actions." They argue that withholding foreign exchange left ISPs with no choice but to default on payments, leading to the Indian shutdown. MoCIT, on the other hand, remains focused on collecting the disputed fees.

Indian bandwidth providers are owed millions of rupees, with the outstanding amount reaching an estimated 3 billion rupees. Warnings of disruption were issued months ago, but the government's intervention initially prevented a complete shutdown. However, stalled negotiations have escalated the situation, leaving millions disconnected.

Finding a solution is crucial. ISPAN urges the government to prioritize service restoration and address the fee dispute later. A potential compromise could involve allowing ISPs to resume payments while negotiating the validity of the fees. However, long-term stability requires resolving the royalty and RTDF calculations and establishing a smoother mechanism for foreign exchange approvals.

Millions remain offline, and Nepal waits. This crisis serves as a stark reminder of our interconnected world. A seemingly bureaucratic dispute can snowball into a national issue impacting millions. As Nepal strives to restore connectivity, a critical question remains: is this a temporary blip or a symptom of deeper problems requiring long-term solutions?

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