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Govt finally defends 2G policy

Govt finally defends 2G policy

Exactly a year after the Indian government told the Supreme Court that it was “hazardous" to take a stand on the telecom policy, it finally defended its first-come-first-served (FCFS) norm and argued that an auction of 2G spectrum or other natural resources was not in public interest.

The department of telecommunications (DoT) filed a review petition before the Supreme Court on Friday, laying down grounds for the court to partially set aside its 2 February judgement through which 122 telecom licences were cancelled, to the extent that an auction to allocate spectrum and other natural resources was not mandatory.

Questions were also raised by the government on the constitutional nature of the power of judicial review of policy exercised by the court in its judgement, in which FCFS was found to be violative of Article 14 of the Constitution (right to equality). The doctrine of separation of powers between the executive and the judiciary has also been incorporated in the government’s petition.

Former telecom minister A. Raja and two telecom companies, Unitech Wireless Ltd and Sistema Shyam TeleServices Ltd (SSTL), also filed separate review petitions on the court’s 2G licence cancellation judgement on the last day that this could be done.

On 3 March last year, attorney general Goolam E. Vahanvati told the court on behalf of DoT: “I’m here to tell about the larger policy issues. I’m going to be very careful not to join issue on the decision-making process."

To this, the court asked: “Who will address the court for DoT on the decision-making process?"

Vahanvati: “I don’t want to do it. There could be larger implications. If I defend it, then it looks like we are defending what is being investigated (by the Central Bureau of Investigation, or CBI). If I don’t (defend it), then it appears that what was done was wrong. In these circumstances, it is hazardous for me to say anything."

The government, through a review petition settled by solicitor general Rohinton F. Nariman’s office, told the court that it had not applied its mind and fully thought through the consequences when it ordered that all natural resources such as spectrum will be allocated only through public auction.

The adverse effects of competition between established telecom operators and new entrants had been overlooked by the court, said the government, reasoning that the entry price of spectrum of 1,658 crore (which was discovered in a 2001 auction) was retained in the 2007-08 allotment of spectrum in order to maintain a “level-playing field".

WATCH VIDEO

Mint’s Nikhil Kanekal says the government has filed a petition before the top court, asking them to withdraw their decision to cancel 122 telecom licenses; throwing the door open for a fresh round of debate and discussion on the 2G license case

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The government told the court that forcing an auction of spectrum would preclude it from increasing teledensity (good network coverage) in rural and semi-urban areas, which is where it was steering new operators towards, through the existing policy. “This wide disparity would result in an unfair and anti-competitive advantage being given to incumbent telecom operators who acquired the said licence and spectrum for a lesser cost as compared to the cost of acquisition which will be paid by the new entrants," said the petition.

Raja, who was not a party to the licence cancellation case, contended that the observations in the court’s 2 February judgement unequivocally prejudice the criminal trial he is facing in the special CBI court.

Interestingly, some arguments made by the government in seeking a review are similar to those advanced by Raja before the special court on why the government took the decisions that it did in 2007-08.

SSTL, which operates in India under the MTSbrand, had 21 telecom licences cancelled. It told the court that the judgement had not considered several factors, “which were specific and unique to its case". Unitech, which operates Uninor in a joint venture with Telenor ASA of Norway, argued that it is a bona fide operator with 36 million subscribers, and that its submissions were also not considered by the court during the hearings.

Shauvik Ghosh contributed to this story.

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