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Presidential reference on 2G gets nod

Presidential reference on 2G gets nod

New Delhi: The cabinet on Tuesday cleared a request by the department of telecommunications (DoT) for a presidential reference on the 2 February Supreme Court judgement cancelling 122 licence allocated to nine companies in January 2008, in an attempt aimed at clarifying seven issues arising from that order.

One of the seven involves the allotment of telecom licences between 1994 and 2007 on the basis of the same policy that the court called “fundamentally flawed" while cancelling the 122 licences issued on the same basis. Another seeks clarification on the court’s ruling that all natural resources be auctioned.

The review petition deals primarily with the question of the court’s jurisdiction and whether it stepped into the executive’s domain. The reference is less adversarial and asks several questions of law and fact, including the potential implications for all other natural resource allocations based on the first-come-first-served (FCFS) method, within the telecom sector and elsewhere. The reference is a formal constitutional advice being sought by the government before it moves ahead with any policy and legal decisions based on the court’s 2G judgement.

On 2 February, while delivering a ruling on a case concerning the so-called 2G scam involving allotment of licences to some telcos on favourable terms, the court declared that the licences were illegal and had to be surrendered by 2 June. Saying the FCFS policy for allocation of telecom licences had “dangerous implications", the court asked the Telecom Regulatory Authority of India to draw up an auction procedure for spectrum.

Analysts do not expect the reference to change much. “I don’t really see it as a major game-changer. It is unlikely that the court will significantly change its original verdict of 2 February," said Mahesh Uppal, a telecom regulatory expert and director at Com First (India) Pvt. Ltd.

The reference also seeks the court’s opinion on the legality of dual spectrum licences allotted to Reliance Communications Ltd and Tata TeleServices Ltd in 2007 that enabled the telcos, which offered services on the CDMA platform, to also do so on the dominant GSM one.

STel Pvt. Ltd, one of the first telcos to announce that it was closing down pursuant to the verdict, won 3G spectrum in three circles— Himachal Pradesh, Bihar and Orissa—in the 2010 auction and paid Rs337.67 crore for the airwaves.

On 5 April, the Supreme Court rejected the review petitions from most of the operators affected by the verdict, but allowed the government’s petition asking for a review of some of the decisions taken by the court.

The government has also filed a petition seeking at least a year to conduct the auction of spectrum as against the four months directed by the court. The court is yet to take a decision on this.

The government also requested that the court reconsider its verdict on natural resources being auctioned as such a decision is the prerogative of the executive.

The Supreme Court is well within its powers to reject the reference.


Also See | 2G scam (full coverage)

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