Raja tries, but Trai's not to blame
(07 aug '08 ; 6.00 . pm)
Telecom minister A Raja's attempt to blame a Rs 51,000 crore revenue loss from the under pricing of telecom licences in January on
Trai and the NDA government's National Telecom Policy (NTP) of 1999 on Friday seems unsustainable.

Fresh evidence with ToI reveals that neither the Cabinet decision of 2003 nor Trai's 2007 recommendations support
Raja's stand for choosing a first-come-first-served (FCFS) policy at 2001 prices for allotment of spectrum in 2008. A letter written by Trai chairman N Misra, dated January 142007, three days after spectrum was given, warns that DoT should not use its recommendations out of context.

The authority in its recommendation had confirmed the maintenance of status quo in the existing policy of no limit on the number of access service providers, which has been the policy of government since 1999, Misra writes.

He cautions DoT by adding, However, the authority wants to reiterate that its recommendation on the entry of new service providers has always been linked to the availability of spectrum. This was conveyed to DoT in a letter dated February 22 2003 and October 27, 2003.

Anticipating that DoT's decision will invite controversy, Trai cautioned, As there was no subsequent reference to the authority on the issue, therefore it is presumed that the government had agreed with the above (October 2003) recommendation.

In effect, Trai, unlike Raja, points to its recommendations of October 27, 2003 and not of August 2007 as the final word on the terms and conditions for introduction of new service providers. These recommendations were later approved by a GoM and by Cabinet on October 31, 2003. NTP '99 was amended to accommodate these changes on November 11, 2003.

This proves that the Trai pointed the DoT towards the 2003 recommendations, which clearly state in section 7.39 that government, may introduce additional players through a multi-stage bidding process as was followed for the 4th cellular operator. This (auctions) and not FCFS, is Trai's and Cabinet's last and definitive view for issuance of new licences after 2003. Ironically, Raja when asked why he was refusing to follow the path set by India's most successful and litigation-free 2001 auctions, said, "I am not aware of any such auctions".

Knowing well that DoT had cherry picked from its 2007 recommendations to push FCFS, Trai warned the government about the legal implications of this action. It would be unfair and misleading if any decision and consequent action is initiated without identifying and implementing the linkages elsewhere in the recommendation. It was reiterated that the authority should be formally consulted if there is any deviation from the totality of the recommendation, it forewarned.

In effect, the DoT is defending itself based on a Cabinet decision of 2003, which had ratified auctions for new entrants, and Trai's 2007 recommendations which, Trai's letter admits should neither be used out of context nor quoted in part to advocate a case for allocating 2G spectrum to new entrants. A PIL against DoT's spectrum decisions has been filed in the Delhi High Court. A judicial scrutiny will uncover whether policy and Trai have indeed forced Raja's hand as he is trying to claim.

Left parties and the media have put Raja under the spotlight for giving away 120 precious 2G licences for a 2001 price of Rs 9,000 crore in January, while subsequent equity deals struck by new licensees, Unitech and Swan reveal that its real value is closer to Rs 60,000 crore.

 

 

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