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Courting trouble on 2G PDF Print E-mail
Monday, 09 April 2012 07:18
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Need a fresh opinion on presidential reference

The move to send a presidential reference to the Supreme Court on its judgment cancelling 122 2G licenses, in addition to the review petition that will be heard on April 13, has already been criticized by Planning Commission deputy chairman Montek Singh Ahluwalia on grounds it will just worsen the investment climate. Since SC has not asked for cancelling of any licenses issued between 2003 and 2008 other than these 122, Ahluwalia argues there is no need to ask the question — as and when SC cancels more licenses, the government can argue its position. Worse than the issue Ahluwalia has raised is the confusion that will be caused by the manner in which the facts have been presented in the draft presidential reference.

While India has had three telecom auctions so far (in 1995, 2001 and 2010), the presidential reference tries to suggest India has never held auctions till 2010: “Whereas for the 2001 Cellular Licenses … the licensees did not pay any separate fees for the allocation of the spectrum. They were only required to pay annual spectrum usage charges.” The same point is made for the 1995 licenses as well. So, while asking whether licenses between 2003 and 2007 should be cancelled, the reference suggests no one paid an upfront fee for using spectrum till 2010. But this is because, till 2010, you got spectrum bundled with a license that was auctioned in 1995 and 2001 — if not, why did investors pay Rs 1,651 crore for the license in 2001?

Apart from the confusion it will create, it is not even clear why the government is asking SC these questions. So, it wants to know if the dual technology licenses issued by A Raja were illegal. Given the licenses were issued under the same 2008 decision of no-auctions — in one case, the license was issued before the policy was announced! — and were arbitrary in the sense that ‘dual technology’ firms were given spectrum before 343 others in the queue before them, it would appear they are also illegal. But there is a petition arguing illegality before SC anyway, so why is the government asking the question? Two, it is ironic that while the government argues SC cannot intervene in ‘policy’ matters, it is asking SC to do so now! It is equally ironic that the government should be defending dual technology in SC while now asking for SC’s view. Given that the arguments made in the reference are essentially the same ones made unsuccessfully in the past — before a single bench of the Delhi High Court, then a review bench, and before SC on two occasions — it may not be a bad idea to get a fresh set of opinions on the reference before proceeding to Court.


 

 

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