//Dil Se Desi// Why not cancel 2G licences: SC

 

Why not cancel 2G licences: SC

January 11, 2011   5:38:51 AM, Pioneer

PNS | New Delhi

The Supreme Court on Monday raised disturbing queries over the Government and Telecom Regulatory Authority of India's (TRAI) inaction against defaulting 2G licence-holders for failing to roll-out services within the mandated one-year period.

Hearing two petitions filed by Centre for Public Interest Litigation (CPIL) and Janata Party president Subramanian Swamy demanding cancellation of all 122 licences allotted during the regime of former Telecom Minister A Raja, the Bench of Justices GS Singhvi and AK Ganguly issued notices to the Centre and TRAI to respond before February 1 as to why the licences should not be cancelled for failing to provide services as stated in the licence agreements.

The move has come at a time when the Department of Telecommunications (DoT) has charted out a scheme to impose fine on the defaulting companies even while allowing them to retain the business. 

The petitioners, represented by advocate Prashant Bhushan and Swamy appearing in person, contended that owing to serious irregularities in award of spectrum licence, the licences were vitiated and need to be cancelled. Both petitions further demanded fresh auction of the 2G licences. 

The Bench sought responses from the 11 companies which benefited in the 2G spectrum sale - Dishnet Wireless, Etisalat, Vodafone, Idea Cellular, S Tel, Tata Teleservices, Uninor, Loop Telecom, Videocon, Allianz Infra and Sistema Shyam Teleservices.

Bhushan pointed out the stipulation in the licence deed that made it incumbent on the 2G operator to roll out services within one year of date of grant of licence. They were required to start services within a year of allocation of spectrum and cover 90 per cent of the area in metros and 10 per cent in non-metros. This 10 per cent was to gradually increase to 50 per cent in the next three years. 

Commenting on the 122 licences awarded in January 2008 and eight previously handed out in December 2007, the Bench remarked, "If the services were not rolled out, it is a very serious matter." Calling for a copy of the licence agreements, the bench wondered, "If the licensees have not started their services, which are a violation of rollout obligation integral to the licence agreement, does the licence still survive?"

Arguing for a fresh auction of spectrum licences, Bhushan relied on the arbitrary cut-off date that was advanced from October 1, 2007 to September 25, 2007, to favour a select few companies, which ultimately benefited. He pointed out how companies having no previous experience in telecom sector were given "scarce" spectrum at 2001 prices. Mostly real estate companies benefited in the process, who later sold their stake to foreign companies to make "mind-boggling" profits without passing benefit to the public, for which spectrum was allotted at the first place.

Bhushan relied on the TRAI report of November 15, 2010 recommending action against the licensees for not rolling out services well over the one-year period that ended in January 2009 itself. But the Bench was unwilling to spare TRAI for its 19-month long silence. "…why did the TRAI not take any action? It is the highest regulatory body set up to act in public interest and the country. What were they doing?" the Bench wished to know. 

Bhushan said the regulator's conduct throughout the spectrum sale was doubtful as it had given contradictory recommendations when it first held no cap on licences but later pushed for first-come-first-served policy realising that spectrum was scarce. "Such is the sorry state of regulatory mechanism in our country," Bhushan added.

http://www.dailypioneer.com/309843/Why-not-cancel-2G-licences-SC.html

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