The project does not violate any laws or policies of India

rediff.com contacted Andhra Pradesh Chief Minister N Chandrababu Naidu, India-born scientists with Carnegie Mellon University Dr Raj Reddy and Dr V S Arunachalam, the trio named by Rashtriya Swayamsevak Sangh leaders as "the liaison men" behind the controversial Sankhya Vahini project.

Naidu wrote back stating the allegations are unfounded and baseless, but said Dr Arunachalam would answer questions. When contacted, Dr Reddy termed the accusations against Sankhya Vahini as malicious information in the Indian press. He too promised that Dr Arunachalam would answer any questions there were.

Dr Arunachalam finally wrote back answering in-depth the questions that we raised on the Sankhya Vahini project. Excerpts from an e-mail interview George Iype had with Dr Arunachalam:

It is alleged that the project is wrapped in mystery. RSS leaders say it is a Rs 30-billion project, that it is being executed at a speed that is intriguing and that it defies all economic and strategic considerations.

The project cost, as alleged, is not Rs 30 billion, but only Rs 10 billion -- which is the authorized capital of Sankhya Vahini. The initial capital is more likely to be less than half this amount.

There is no secrecy in the manner in which this project has been promoted. In fact, the Sankhya Vahini project has been discussed by various departments and ministries of the government of India and also forms a part of the IT Action Plan -III (long-term national IT policy) of the national Task Force on Information Technology and Software Development constituted by the Prime Minister of India.

A number of discussions have taken place between the government of India and members of Carnegie Mellon University in conceiving and designing this joint venture for almost two years.

It is said IUNet has no special claim to any eminence in the field.

IUNet is a company incorporated by Carnegie Mellon University to disseminate knowledge and education throughout the world. It brings to the table decades of research and the experience of Carnegie Mellon University, a recognized leader in the field of Information Technology. Leading American universities routinely start companies to realize innovations developed by them. We therefore have to look at the reputation of Carnegie Mellon University in information technology in assessing the expertise.

Two of Carnegie Mellon's recent spin-offs in IT have proven to be large successes -- Fore Systems, which was recently purchased by Marconi for US $ 4.5 billion, and Lycos, a leading Internet portal, worth almost $ 8 billion. Carnegie Mellon has more than a dozen institutes dedicated to IT alone, and annually spends more than $ 100 million in this area. Just a few weeks back, Carnegie Mellon announced the setting up of a West Campus in Silicon Valley to work more closely with major IT companies and research institutions.

Can you describe the manner in which this project was conceived and the process by which it received Cabinet approval?

The concept of providing adequate bandwidth for educational purposes is not new. But what is new is our (myself and Dr Raj Reddy's) suggestion to dedicate a pair of fibers totally to data networks, freeing them from voice telephony and enabling these fibers to transmit educational and informational content to millions of users in India. Separating data from voice would allow for newer technology that are unique to data to be inducted, offering economies of scale and enabling larger bandwidths at lower cost.

India urgently requires such technology to train the large number of IT professionals needed in the coming years and also to spread the IT revolution throughout the country. In addition, India needed such an engine for its literacy and human development missions.

There were presentations on these issues to a previous Indian prime minister in 1994, a presentation to the Telecom Commission in mid-1997, followed by a presentation to the IT Task Force in September 1998.

There were many more meetings and presentations to a number of ministers between 1996 and 1998 that included ministers and secretaries of communications, finance, and electronics. The presentation to the IT Taskforce on September 5, 1998 was on the invitation of the Chairman of the IT Taskforce, Jaswant Singh and the co-chairmen, Chandrababu Naidu and Prof M G K Menon.

In the presentation, we suggested the options mentioned above. It was after this meeting and during separate discussions with Jaswant Singh and Sushma Swaraj, then minister of communications, and where the chairman and a member (services) of the Telecom Commission, and the convener of the IT Taskforce, were present, it was suggested Carnegie Mellon should work with the department of telecommunications to develop such an information network for the country.

Carnegie Mellon was thus invited by the chairman of the IT Taskforce and the minister of communications to participate in the joint venture. We agreed to this invitation provided a few leading Indian educational institutions would also partner with DoT and CMU in this venture.

When was the memorandum of understanding signed?

The memorandum of understanding was signed on October 16, 1998, almost one year after both IUNet and DoT discussed the joint venture. In the rapidly-changing IT area, a year of discussions even before approval is considered exceptionally long! During this time, many meetings between members of DoT, Indian universities, the department of electronics and CMU took place.

All questions regarding this collaboration were discussed in detail and agreements reached. Therefore it can safely be said that the project was approved by the Indian cabinet after taking into due consideration all economic and strategic implications related to the project.

Was IUNet in existence when the memorandum of understanding was signed by Dr Raj Reddy as chairman of IUNet and Anil Kumar, chairman, Telecom Commission?

The records clearly show that the university requested that the name 'IUNet Inc' be reserved on August 13, 1998 and it was approved by Department of State Corporation Bureau on August 27. Under the normal corporate custom in the US, a corporation, once its name is reserved, starts the business under that name for negotiations and developing business even before the articles of incorporation are signed and filed with the department of state.

The department of state allows a reasonable time (and if necessary, extended further) between reservation and filing all articles of incorporation. When Dr Raj Reddy signed the MoU on October 16, 1998, he was actually the chairman of the company whose name was reserved by the department of state. In Indian parlance, this is equivalent to signing as chairman designate.

IUNet Inc's incorporation was filed with the department of state on January 8, 1999, with Dr Raj Reddy as chairman, and he continues to be the chairman. We therefore submit that we do not see any anomaly in his signing the MoU. Dr Reddy also signed the MoU as the dean of the School of Computer Science, Carnegie Mellon University. The university is one of the leading universities in information technology in the world. From the point of view of signature, we would rate Dr Raj Reddy's signing as the dean of the School of Computer Science more relevant than as chairman, IUNet Inc.

Carnegie Mellon's participation in this venture makes this partnership far more attractive from the point of view of educational and information content in the network, as well as for the opportunities this offers to IT and educational institutions throughout India for research and development collaboration.

It is alleged that Sankhya Vahini violates the Indian Telegraph Act 1885, the Indian Wireless Act 1933, National Telecom Policy 1994 and New Telecom Policy 1999...

The project does not violate any laws or policies of India. In fact, the New Telecom Policy 1999, permits the use of the existing backbone networks of public and private power transmission companies, the railways, the Gas Authority of India Limited and the Oil and Natural Gas Commission for national long-distance data communication.

In addition, data networks are not the same as voice or cellular networks, as these carry a great deal of societal opportunities in education, information, and empowerment. The difference between voice and data networks in their operation (voice needs a captive bandwidth, while data is bursty in nature, allowing many more people to share the bandwidth) suggests that they should be assessed and regulated differently. This, in fact, is seen in the government policy for data networks not being subject to revenue-sharing requirements or levies.

But the project timeframe envisages Sankhya Vahini as a national mission, thereby waiving all the rules and regulations and allowing duty free import of items for its speedy implementation within nine months. For this, 1000 acres of land is reportedly being made available near the national capital region.

While the rapid deployment of the network is important from a national perspective to allow India to attain dominance in the worldwide IT industry that is growing rapidly, no rules or regulations were waived for the project. Nor has the project received any special concession such as duty free imports. Adequate and due diligence has been done and all rules, regulations and processes of the government of India have been complied with.

All equipment imported by Sankhya Vahini will be subject to normal rates of duty levied on such equipment by the Indian government. Secondly, there is no question of any land (let alone 1000 acres) being made available free of cost to Sankhya Vahini anywhere in India.

At no time during our discussions did the Sankhya Vahini programme request any allotment of land in Delhi. Rent will be paid for premises used by the project. In fact, there are no plans to headquarter Sankhya Vahini in Delhi or its surroundings.

Soon after the Indian cabinet approved the proposal, DoT Secretary Anil Kumar was moved out. It is said that Kumar was raising too many objections.

It is true that the DoT secretary was transferred. But we can put on record that from the time of signing of the MoU on October 16, 1998, Kumar had been extremely supportive of this project and had encouraged the rapid deployment of the Sankhya Vahini network. He was, in fact, a prime mover in striving to bring high-speed data network to the country.

Sankhya Vahini will soon become the national Internet backbone for India, effectively replacing the established backbone provider, VSNL, for all practical purposes. This again violates the National Telecom Policy 1999.

Sankhya Vahini will be a next generation data network in India which will bring to India, for the first time, state-of-the-art technologies such as dense wavelength division multiplexing, wide-area gigabit ethernet etc. This does not imply, however, that Sankhya Vahini will be the only data network in India or shall replace the existing providers, DoT and VSNL. There are already several private and public sector initiatives to set up fiber optic backbones in the country.

In fact, there seems to be some confusion over what the National Telecom Policy, 1999 states with regard to international voice gateways and VSNL's monopoly over the same, and what the Sankhya Vahini network is planning to set up.

Sankhya Vahini is a data network. The joint venture agreement clearly mentions Sankhya Vahini working with VSNL for international connectivity.

Sankhya Vahini shall have the right to set-up international gateways for data traffic as is currently being allowed to other Indian Internet Service Providers. As you know, already the government has granted a few licenses for setting-up international gateways to private Indian ISPs.

Will IUNet bring foreign investment into India? Or is it just providing the technological know-how? It is alleged that IUNet managed to get 49 per cent of the total equity stake of Sankhya Vahini for just bringing in the technology.

This is categorically untrue. In fact, IUNet, as its part of the equity in Sankhya Vahini India Limited, will bring in both cash as well as state-of-the-art equipment from global technology vendors such as Lucent, Nortel, Sycamore, Cisco etc. The amount of this foreign investment into India will be to the tune of Rs five billion. IUNet shall not charge technology know-how fees or royalty to Sankhya Vahini and no foreign exchange outflows will be necessary for capital equipment to set up Sankhya Vahini.

The equity given to IUNet is purely against cash and equipment it brings into Sankhya Vahini. Procurement and valuation of the equipment will be done in a transparent manner and will be subject to the audit of a reputed audit firm and to the satisfaction of DoT.

It is worth noting that no established foreign company is directly involved with the project. Then why should India get into such a sensitive deal with a US university whose area of expertise is definitely not communication technology?

As a global university, CMU has taken a policy decision to explore distance learning, education, and research with as many countries as possible. A high bandwidth data infrastructure is essential for this education mission. CMU is already working with a number of Indian educational institutions in areas of information technology and software engineering. This list is large and includes the recently inaugurated Watts Humphrey Software Quality Institute in Madras, the Carnegie Center for Software Engineering set up in Bangalore in collaboration with LG, the Karnataka government and the Indian Institute of Science and the Indian Institute of Information Technology, Hyderabad.

Given the above background and Carnegie Mellon's experience in working with India, the university hopes to participate through Sankhya Vahini in education programs and research collaborations with India, an emerging global player in information technology.

As far as high-speed data networks are concerned, CMU is a partner in Internet2 (i2) and SuperNet projects. CMU is one of only two sites, which has connectivity with both i2 and SuperNet networks.

CMU and its institutions are also involved in other high-speed data networks such as vBNS (very high speed backbone network services) and provide support for high performance engineering that is helping other users realize and utilize high bandwidth. CMU has also set up the world's largest wireless high-speed data network of its kind (wireless Ethernet), which is currently operational throughout the campus.

It is worth pointing out here that the Information Networking Institute is located at CMU, and the Software Engineering Institute at CMU has a long-standing relationship with Indian software companies. The Software Engineering Institute certifies more than 35 companies in India, and this has helped Indian firms compete globally.

What is the guarantee that the facility for Sankhya Vahini in the DoT complexes will not be used for interception of India's trade and strategic secrets.

There seems to be a major confusion in the area of security. Sankhya Vahini is being set up as a private, Indian network, and will own and operate its equipment. The fear of foreign eavesdropping doesn't arise, and security will be inherently better than cellular or satellite-based networks. One may be aware that today, many of the email messages destined for within the same city in India travel not just through that city or even to other nodes within the country, but travel all the way to the US and back!

This will not happen when Sankhya Vahini becomes operational, as Sankhya Vahini will be totally contained in India to allow peering between national networks to take place domestically. In fact, this is a goal of Sankhya Vahini, to increase the domestic creation, hosting, and availability of content without having to depend on other countries.

Today, India's network is of modest bandwidth (34 Mbps is considered exceptionally fast there, and, that, only between a few locations). A high-speed network (2.5-40 Gbps) completely self-contained is a good defense against snooping, sniffing, and other malicious attacks.

Hosting Indian data within India will also increase its security. One may remember that some Indian sites hosted by the army and the Indian Science Congress were hijacked from outside. Carnegie Mellon has excellent experience in protecting networks from such malicious attacks. It also hosts the world-renowned Computer Emergency Response Team to help organizations to protect themselves against such attacks and to recover from them. This capability of Carnegie Mellon's is much sought after in the US, Europe, Japan, and Australia. Its experience will be integrated in the design of the Sankhya Vahini network.

Computer attacks originate from malicious use of the network (ISPs or corporate networks being misused), and not from the network itself. Defense against attacks should therefore be seen in building robust subscriber and access networks that sound necessary alerts and offer protective mechanisms to save the network from being compromised.

We believe Sankhya Vahini will help all users and ISPs to increase their defense against such network compromises. It is worth mentioning that even the design of the network was done through collaboration with Indian institutions and experts. Needless to say, Sankhya Vahini will comply with all security laws of the country.

It is alleged that IUNet expects the government to do everything for them in terms of infrastructure and let them just run the company to their fullest advantage.

Sankhya Vahini will be set up as a partnership with DoT bringing a pair of dark fibers and cash towards its 45 per cent equity. IUNet will bring state-of-the-art equipment, to generate and provide gigabit bandwidth, and cash for its equity. The uniqueness of this venture stems from the fact that a next generation data network for India can be deployed rapidly using just one pair of dark fiber from DoT and the state-of-the-equipment from IUNet.

The company will be managed independently and headed by a managing director who will be a professional appointee chosen by DoT and IUNet. All services for Sankhya Vahini, either from the Indian government or from outside, will be handled as commercial transactions.

If the Indian partner has to provide land, corridors in all exchanges, initial bandwidth, money and even sales promotion, why should India allow a foreign company-IUNet-to control, dictate and siphon the profits away?

Sankhya Vahini is an Indian company and all the stakeholders in it will bring cash and hard assets as part of their equity contribution into it. The assets (fiber and equipment), will be valued independently by the government's nominee and an international audit firm and the process will be completely open and transparent. There is no sweat equity or equity against technical know-how given to any of the partners in the project. All space that will be utilized for co-locating the network equipment in DoT exchanges will be done in an arms-length manner and on commercial terms.

Further, operations of Sankhya Vahini will be independent and run by a professional management team that will be headed by a Managing Director who shall be a professional appointed jointly by DoT and IUNet. Therefore, the question of control of the company by a "foreign Johnny" does not arise and neither does the issue of "siphoning the profits".

Next: The second part of the Dr Arunachalam interview

Design: Rajesh Karkera

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