India - spectrum assignment

HC notice to telecom ministry on spectrum allocation

Judicial scrutiny of the allocation of 2G spectrum by A Raja-headed telecom ministry began on Monday with the Delhi High Court asking the Centre to respond to a PIL, which challenged the "first come first serve" basis of allotment at "throwaway prices" and alleged huge loss to the exchequer.

Even before a Bench of Chief Justice A P Shah and Justice S Muralidhar could take a prima facie view of the PIL and was inquiring whether any tender was issued, the government tried its best to convince the court not to entertain the petition as an identical matter was pending in another quasi-judicial forum -- the telecom appellate tribunal TDSAT. Senior advocates, appearing for spectrum licence holders, were ready to render assistance to the government counsel.

But the Bench decided not to let the private parties drag the hearing in a different direction by asserting that the government should first "explain to the court as to what this 'first come first serve policy' means".

Issuing notice on the PIL filed by Arvind Gupta, the Bench asked the telecom ministry to put in its response within three weeks and scheduled next hearing on the petition for December 10.

Accusing the telecom ministry of resorting to "first come first serve" policy, which had been termed illegal by courts in an earlier case, the petitioner said allotment of spectrum through an arbitrary non-transparent policy not only stifled competition but resulted in huge loss of revenue to the exchequer.

"The present policy stifles competitive bidding and allows people with no telecom experience to book spectrum and sell it to bigger players for huge money," alleged the PIL and sought quashing of the "first come first serve" allotment procedure.

Gupta said Doordarshan had in 1993 resorted to an identical "first come first serve" policy for alloting time slots to private producers on satellite channels. The HC, in its September 21, 1993, verdict, had held, "The basis of first come first serve for allotment of time slots on satellite channels is arbitrary. It is unreasonable, unjust and unfair."

Gupta said it was strange that the government decided to employ an allotment procedure that had been declared illegal by the HC leading to arbitrary allotment of spectrum licences without accountability and transparency.

"The proximity of real estate developers to the corridors of Department of Telecom has enabled them to overnight turn into telecom entrepreneurs. The real estate developers and infrastructure promoters, who perhaps did a great job for urban development, have also become Indian telecom players," he alleged.

"The telecom ministry's wilful and deliberate inaction in adopting recommendation of the finance ministry, PMO and Telecom Regulatory Authority of India (TRAI) policy has benefited private parties at the expense of public exchequer," the petitioner said.

Without providing a level playing field for all, the government by adopting the "first come first serve" policy had acted like a fair price shop and allotted telecom licences and spectrum on rates fixed long ago causing a huge loss of revenue, Gupta alleged.

No effort was made to find out the current market value of spectrum licence and the allotments were done at 2001 prices, he alleged, adding, "This enabled new telecom players to acquire spectrum and then bargain huge premium from foreign players to trade the spectrum."