Trai affidavit to SC says 2G licences were illegal PDF Print E-mail
Thursday, 17 March 2011 00:00
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Sunil Jain and Rishi Raj

If it wasn’t enough that the Supreme Court and the Justice Shivraj Patil Committee have already said the licensing procedure followed by former telecom minister A Raja was bad in law, the telecom regulator has now reiterated the same. In an affidavit filed before the Supreme Court on Wednesday, a copy of which is with FE, the Trai said the government never sought its recommendations for “need and timing for introduction of new service provider” [Section 11(1)(a) of Trai Act] which is mandatory under the law. The affidavit also contests the claim made by A Raja and Kapil Sibal that Trai had never recommended auctions for 2G licences.

It said the much-talked of Trai recommendation of 2007 was actually sought under a different pretext and when the then Trai chairman Nripendra Misra pointed this out, he was told to keep quiet (see box). New companies, the DoT argued, were being given licences, but this was the old licence that was being given, not a new category of licence!

The Trai affidavit adds that the recommendation sought by the telecom ministry was quite misleading because it never ever said that new licences were to be introduced.

The affidavit just asked if a cap should be put – and the Trai said that no artificial cap should be put on the number of service providers. “Even this”, the affidavit says, “was subject to review in the light of new data on availability of Spectrum. This recommendation does not mean that licences should be granted without considering the available spectrum.” There was no indication, the affidavit says, “that new UASL was going to be issued”.

The affidavit goes on to add that the original recommendation said “this whole issue is not to be dealt in piecemeal but should be taken up as a long-term policy issue”. So, it says, the government should have got back to Trai on the amount of spectrum it had. This would have allowed Trai to see how much spectrum was needed for existing operators and then it could have, after a mandatory consultation with all stakeholders, come up with a specific recommendation on whether new licences should be granted – as per Section 11(1) of the Trai Act.

Trai's stand in the affidavit is especially important as the recommendations were made under a different Trai chairman. While the current chairman JS Sarma was in TDSAT, the tribunal had been quite critical of the 2007 Trai recommendations in one of its judgments.

On the specific issue of why Trai had not recommended auctions, the affidavit says: “While Trai was not in favour of holding auctions for 2G bands, it has nowhere suggested or recommended that the entry fee should be kept pegged at 2001 level”. It then quotes from the original recommendations of 2007: “It is also a fact that entry fee determination in 2001 does not bear any relationship to present spurt in telecom market... the entry fee as it exists today is, in fact, a result of the price discovered through a market-based mechanism applicable for the grant of licence to the fourth cellular operator (2001). In today's dynamism and unprecedented growth of telecom sector, the entry fee determined then is also not the realistic price for obtaining a licence. Perhaps, it needs to be reassessed through a market mechanism”.

Just hang up, OK?

On July 1, 2008, Trai chairman Nripendra Misra had written to Siddhartha Behura, the then telecom secretary (Behura is now in jail for helping Raja), saying the government had to seek Trai's recommendations on new licencees. The very next day, Behura cited a Supreme Court verdict that, in turn, quoted the Shorter Oxford Dictionary to observe “that the word 'new' means not existing before; now made, or brought into distence for the first time”. Having defined what 'new' was (since Misra was speaking of 'new' licences), Behura wrote that Section 11 of the Trai Act “read with section 13 of the General Clauses Act, 1897, is for mandatory consultation of Trai to something being brought/introduced for the first time as a new category of licence”. He then went on to say “the department has been seeking the recommendations of TRAI whenever a new category of licence is to be issued and we feel that no useful purpose would be served by engaging in further discussion with TRAI on the subject”.

Last Updated ( Sunday, 27 November 2011 17:49 )

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