Non-auction allocation for defence, satellite use

New Delhi: The government is not seeking to change the 2012 Supreme Court judgement that backed auction as the preferred mode of allocating telecom spectrum except for narrowly defined sectors such as satellite communication and defence where the auction is not feasible, a top source said on Wednesday.

The source said the government filed a miscellaneous application in the Supreme Court on December 15 last year seeking clarification on assigning spectrum for specific purposes such as satellite communication, for use by defence forces and public sector units and for metro or railway operations without auction. The petition, which was filed prior to the Parliament passing the new telecom law that provides for 19 exemptions in late December, came up for hearing on Monday. The source termed it as “strange” the row that erupted following the petition coming up before the court. The government is being questioned if it wants to change the 2G judgement but the fact is that because of a history of litigation in the telecom sector, the miscellaneous application was filed in the best interest of maintaining transparency, explaining what is intended to be done.

While every stakeholder has been consulted on the issue, there was no way the court could be consulted and so the application was filed to inform and onboard the judiciary, he said. The application clearly says that “we agree with the court’s ruling, and agree that spectrum auction is the best option, but there are certain cases that are very narrowly defined like marine, defence, and metro safety etc,” the source said, adding that these details have been mentioned in the Bill in the Parliament. “It was more like informing the court, there was no prayer to change or seek any (new) judgment,” he said. “This is not something that governments regularly do. It was a deeply thought-through action to take the court on board as this has been a very contentious issue... it was not needed, but more out of ensuring full transparency and onboarding every stakeholder.”

The then government in 2007-08 announced the continuation of allocating spectrum, which is used for transmitting voice and data signals for mobile phones, on a first-come-first-served basis. Delhi High Court in July 2008 ruled that the September 2007 cut-off date used for such allocation was illegal. In November 2008, the CAG report cited irregularities in allocation and estimated revenue loss of up to Rs 1.76 lakh crore to the exchequer. This forced the then telecom minister A Raja to resign. The Supreme Court in February 2012 cancelled 122 licenses issued under that policy and ordered the auction of spectrum as it was a national resource. Since then spectrum for telecom companies has been auctioned but that for national security and public infrastructure has been allocated administratively (without auction).

The source said the major issue that came out after talking to all stakeholders was the issue of a level playing field and how the spectrum to be administratively given should be priced. “We have very categorically said that TRAI will come with a mechanism that will be very transparent and fair.” “We spoke to TRAI and it returned the old consultation, we have already framed our reference to TRAI (for pricing of spectrum for non-auction sectors) which should go out in a few weeks... the reference will broadly constitute which kind of frequencies should be used, their pricing, and terms and conditions from the point of security that should be there in the license,” he added. The administrative allocation route will provide significant relief to space telecommunications service providers such as Elon Musk’s Starlink, Bharti Airtel’s OneWeb, and Amazons Project Kuiper, as they can obtain spectrum without going through an auction process. The next auction of spectrum for telecom is due in June this year.