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2G Spectrum Auction to take place as per schedule: Supreme Court

The Central Government has been granted formal approval to forge ahead with the 2G spectrum auction touted to begin from March 4. The Court sanctioned the auction despite the incoherent and often inconsistent stand taken by the Government and its representatives, in Court. The Court, however, observed that the resultant outcome of the auction will be closely monitored and proper sanction must be garnered from the Court before finalizing it.

Earlier, the Court stayed the February 12 interim order of the Tripura High Court stating that there is no question of equity in the bidding process for any successful bidder. The bench comprising Justice DipakMisra and Justice Adarsh Kumar Goel rejected any plea for postponing or stalling the auction observing that the Court is inclined to let the auction proceed as it is, and monitor the outcome and process, to see what emerges from the entire exercise.

The present Supreme Court order encompasses the entire gamut of 17 circles with respect to which the Government had issued the Notice Inviting Applications, on January 9th. The Bench set March 26 as the date for the further hearing in the matter.

However, the Court regretted that despite disallowing a stay on the auction beginning on March 4, the Government’s stand had often been inconsistent. However, the Court said, that these prima facie inconsistencies cannot be made a ground for postponing the auction.

The inconsistency in Solicitor General Ranjit Kumar’s submission before the Bench was the primary cause of concern. The learned Solicitor General was referring to the fact that the licences of the current and existing Telecom Service Providers (BSNL and Dishnet) that hold 4.4 MHz of spectrum each in the North-Eastern States, are touted to retire in 2017 and that these service providers may be in a position to increase their allocation by topping up their bid for allocation of a minimum 0.6 MHz of spectrum in the region. Though the increased bid will take the cumulative allocation of each TSP to 5 MHz, what bothered the bench was that if these TSPs are not able to hold on to/retain their current spectrum allocation of 4.4 MHz each post-2017, they may still carry on holding 0.6 MHz each for the next odd 20 years and may be willing to trade in it.

Senior Counsel, P. Chidambaram, representing Reliance Telecom in the matter, responded to the above submission of the Solicitor General, arguing that there cannot be a possibility for trade in spectrum. Agreeing with the senior counsel, the Court held that the top-up spectrum is for all purposes to be treated at par with the existing spectrum of the Telecom Service Providers that is touted to lapse/retire in a few years. Hence, tradability in top-up spectrum cannot be agreed upon when clear guidelines in this regard are still not framed or forthcoming. Moreover, private trading in top-up spectrum would be patently discriminatory in nature, and hence, there is no question of sanctioning it, the Court said. The Court noted the need for a consistent policy.

Further, the Court pointed out that if the existing Telecom Service Providers in the North-East holding 4.4 MHz were to bid for any number less than 5 MHz then the top-up spectrum will be co-terminus with the terms of their existing licence/spectrum.Mr. Chidambaram further pointed out that Dishnet will be the sole beneficiary of this particular policy, knocking out Reliance Telecom and BhartiHexacon.

Further, the Supreme Court stayed the proceedings in four different High Courts, its subordinate courts and TDSAT from granting admission to any plea against the auction of 2G spectrum. Earlier, the Tripura High Court order had altered the tender conditions allowing Reliance Telecom and BhartiHexacon to submit one bid for 4.4 MHz and other for 5 MHz of 2G spectrum in 900 MHz band.

by Siddhartha Singh.