Government can go ahead with 2G spectrum auction: SC

Posted on 27th Feb 2015 by mohit kumar

New Delhi, Feb 26 (IANS) The Supreme Court Thursday said even as it has found inconsistencies in the stand taken by the government, it was allowing the auction of 2G telecom spectrum from March 4. It added the outcome will not be finalised without its permission.

While staying the Feb 12, 2015 interim order of Tripura High Court, the apex court bench of Justice Dipak Misra and Justice Adarsh Kumar Goel said no bidder, if successful, shall claim any equity in the bidding process.

Brushing aside all the pleas for staying the auction for a few days, the court said: "Let the auction go on and let us see what emerges from it."

The apex court order would be applicable to all the 17 circles for which Notice Inviting Applications was issued Jan 9 last. The next hearing of the matter is March 26.

The order, not to stand in the way of the auction commencing March 4, came as court said that "there is prima facie inconsistency in the stand of the government, but that is not a ground for staying it (the auction)".

The government told the court the existing TSPs (Dishnet and BSNL) holding 4.4 MHz of spectrum each in the North-Eastern States and whose licences were retiring in 2017 could top it up by bidding for a minimum of 0.6 MHz to take it 5 MHz.

However, what troubled the court was Solicitor General Ranjit Kumar's submission that if such TSPs (Dishnet and BSNL) don't succeed in retaining their 4.4 MHz spectrum after 2017, they will still continue to hold 0.6 MHz for next 20 years and could trade in it.

As the government counsel said this, another senior counsel P. Chidambaram, appearing for Reliance Telecom, told the court that "If spectrum trading policy was there, then I will not be here."

Holding that top-up spectrum should be co-terminus with the existing spectrum of the TSPs whose licences were retiring in a few years time, the court found it unacceptable that TSPs could trade the top-up spectrum for which guidelines are yet to be framed.

"How can there be private trading in spectrum", the court asked the government, adding: "Private trading in top-up spectrum would be discriminatory."

Reiterating that the top-up spectrum should be co-terminus with the spectrum bundled with the existing licences, the court asked: "Why can't it be co-extensive with the existing licence or spectrum? It is a rational situation. Policy must be consistent. You must reconcile every other thing to 5 MHz."

"That is where the fault comes. Natural corollary is to make top-up spectrum ex-extensive with existing 4.4 MHz," the court said wanting a specific direction on "topping-up for how long and how far."

The court said that if TSPs "holding 4.4 spectrum in 900 bands in the north-eastern states bid for 5 MHz then they can continue for 20 years but if they bid for less than 5 MHzA then it will be co-terminus with their existing licences/spectrum".

In the course of his submissions, senior counsel Chidambram told the court that only one service provider Dishnet would be the beneficiary of this policy.

He said only Dishnet -- from the existing licence holders whose licence will continue -- has made the bids. He said that if Dishnet makes bid for 4 MHz spectrum then both the existing service providers -- Reliance Telecom and Bharti Hexacon -- would be knocked out of field.

The court order came as it adjourned hearing on two petitions by the government challenging the Feb 12 Tripura High Court order. The court also transferred to itself four matters before the Allahabad, Delhi and Karnataka high courts wherein Reliance Telecom, Bharti Telecom, and Idea Cellular have contested tender conditions.

While staying the proceedings in four High courts, the pex court also barred all its subbordinate courts, including the TDSAT, from entertaining any plea rooted in the auction of 2G spectrum commencing March 4.

Tripura High court by its Feb 12, 2015 order had modified the tender conditions thereby permitting Reliance Telecom and Bharti Hexacon to make two bids - one online and other offline in hard copy - for 4.4 MHzAand other for 5 MHz of 2G spectrum in 900 MHz band for the North Eastern states.

The tender condition said that the existing operator whose licence is coming to an end in 2015-16 or a new operator could bid for a minimum of 5MHz of spectrum.