PAC Draft Recommendations
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OBSERVATIONS/RECOMMENDATIONS
I
INTRODUCTORY
Before the mobile telephony was introduced in India there was h a r d l y a n y c o m m e r c i a l v a l u e of o f Sp Sp e c t r u m , i t w a s r a t h e r p r ac ac t i c a l l y n i l . The demand for Spectrum was felt in 1994, when in accordance with the National Telecom Policy (NPT-1994), the Telecom Service Sector was opened up for the private sector participation to compliment the e f f o r t s o f t h e De De p a r t m e n t o f Te Te l e c o m m u n i c a t i o n s . C e l l u l a r m o b i l e s e r vi v i c e s w a s d on o n e i n t w o p h as as e s .
The licensing of I n t h e f i r st st p h a s e
t w o C e l l u l a r M o b i l e T e l e p h o n e S e r v i c e ( CM CM T S ) l i c e n c e s w e r e a w a r d e d in November 1994 t o Airc el, Bhart i Airt el, Loop Mobile and Vodafone in
t h e f o u r m e t r o c i t i e s o f D e l h i , M u m b a i , K o l k a t a a n d Ch Ch e n n ai ai o n a
B e a u t y Pa Pa r a d e b a s i s . I t m e a n s t h a t t h e p r i c e o f S p e c t r u m w a s t o b e fixed in such a manner so as to ensure its optimum utilization by a w a r d i n g i t t o t h e u s e r (s (s ) w h o w o u l d s c o r e t h e h i g h es es t a g a i n s t a g r o u p of the extant criteria such as rural coverage or the fulfillment of roll o u t o bl bl i g a t i o n s .
A l t h o u g h , l i c e n c e f e e f o r t h e ab ab o v e t w o l i c e n c e s w a s
predetermined, Spectrum charges and royalty for use of Spectrum w e r e p a y a bl b l e s ep ep a r a t e l y . were
awarded
in
I n t h e se s e c o n d p ha h a s e , t w o CM CM T S l i c e n c e s
December,
1995
to
Bharti,
Idea,
R e li a n c e
and
Vodafone in 18 Telecom Circles/Service areas based on a competitive b i d d i n g pr p r o c e s s . Th T h e i n d u s t r y p l e a de de d t h a t t h e y c o u l d n o t a t t a i n l a r g e growth of business and they were not able to achieve the expected returns on their huge investments, the Commitment for high licence
f e e c o u l d n ot o t b e h o n o u r ed ed . Telecom
Policy
and
f o r m u la la t e d w h i c h
thus
T h e Go v e r n m e n t r e vi vi s i t e d t h e e x t a n t the
New
inter-alia s t i p u l a t e d
Telecom
Policy,
1999
was
t h e a v a i l a bi b i l i t y o f a f f o r d ab ab l e a n d
effective communications for the citizens and open up the telecom sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all the players. One of the most important features of the NTP – 1999 was that the Government would invariably seek the recommendations of the Telecom Regulatory Authority of India (TRAI) on the number and t i m i n g o f n ew e w l i c e n c e s b e f o r e t a k i n g a n y de d e c i s i o n o n t h e i s s u e of of n e w l i c e n c e s in in f u t u r e .
T h u s , t h e Go Go v e r n m e n t m a d e i t c l e a r t h a t t h e e n t r y
o f m o r e o p e r a t o r s i n a Ci Ci r c l e /S /S e r v i c e a r e a w a s r e q u i r e d t o b e b a s e d o n t h e T RA R A I ' s r e c o m m e n d a t i o n s . T h e c o n c e p t o f r e v e n ue u e s h ar a r i n g r eg eg i m e was brought in with a view to providing relief to the Access Service Providers
i.e.
Cellular
Mobile
Service
P r o v i d e r s a n d C a b l e S e r v i c e Pr o v i d e r s .
Providers,
Fixe d
Service
The revenue sharing regime
c o n t e m p l a t e d p a y m e n t o f o n e t i m e e n t r y f e e a n d l i c e n c e f e e b a s e d on on r e v e n ue ue s h a r e .
I n a c c o r d a n c e w i t h i t , t h e Go Go v e r n m e n t a ll ll o w e d t h e
existing licensees to migrate from the fixed licence fee regime under NTP – 94 to a revenue sharing regime under NTP – 99. All the ex isti ng BSOs
and
CMSPs
migrated
to
the
revenue
sharing
regimes
w . e .f . f . 1 A ug u g u s t , 1 9 99 99 a c c o r d i n g t o w h i c h a s h a r e o f 1 5 p e r c e n t o f t h e A d j u s t e d G r o s s Re Re v e n u e ( A GR GR ) w a s c h a r g e a b l e a s l i c e n c e f e e f r o m t h e C M SP SP s a n d t h e B SO SO s .
Subsequently, the share was modi fied to the
slabs of 12 per cent , 10 per cent and 8 per cent of the AGR depending o n t h e s i z e o f t h e C i r c l e /S /S e r v i c e A r e a w h i c h w a s f u r t h e r r e v i s e d t o 1 0 per cent , 8 per cent and 6 per cent .
T h i s r e v e n ue u e s h a r e w a s p a y a bl bl e
quarterly.
Apart
fr fr o m
the licence
fee, the
Op Op e r a t o r s w e r e a l s o
r e q u i r e d t o p a y o n e t i m e n o n - r e f u n d a b l e e n t r y f e e b ef o r e s i g n i n g t h e new licenc e agreement.
T h u s , i n a c c o r d a n c e w i t h t h e pr p r o v i s i on on s o f
N T PP -9 9 t h r e e t y p e s o f f e e s w e r e p r e s c r i b e d v i z ., ., (i (i ) f i x e d p e r c e n t a g e o f A G R a s a n n u a l l i c e n c e f e e , ( i i ) A f i x e d p e r c e n t a g e o f A G R o f C M SP SP s a s a n n u a l Sp Sp e c t r u m c h a r g e a n d (i (i i i ) On On e t i m e e n t r y f e e b e f o r e s i g n i n g t h e lic ence agreement .
I n 1 9 9 9 -2 -2 0 0 0 , M T N L a n d B S N L w e r e a w a r d e d
CMTS lic ences as the third mobile operator. 2001,
I n S e p t e m b e r - Oc Oc t o b e r
1 7 ne ne w C M T S l i c e n c e s w e r e i s s u e d o n a c o m p e t i t i v e b i d d i n g
process.
T h e a l l o t m e n t o f Sp Sp e c t r u m w a s a s s u r ed e d un un d e r t h e l i c e n c e
a n d no n o s e p ar a r a t e u p f r o nt n t f e e w a s c h a r g e d f o r Sp Sp e c t r u m .
I n 2 0 03 03 t h e
U n i f i e d Ac A c c e s s Se S e r v i c e ( U AS A S) L i c e n s i n g r e gi gi m e w a s i n t r o d u c e d w h i c h e n v i s ag a g e d t h e p r o v i s i o n o f w i r e l i n e , f i x e d a n d l i m i t e d m o b i l e w i r e l e s s, s, full mobile w ireless and cellular mobile telephone services under one l i c e n c e o n p a y m e n t o f t h e p r es es c r i b e d e n t r y f e e .
As per the condition
of the UAS license, initial Spectrum of 4.4 MHz + 4.4 MHz was to be allotted for GSM based systems and a maximum of 2.5 MHz + 2.5 MHz Spectrum to be allotted for CDMA based systems, on case by case b a s i s a n d s u b j e c t t o a v ai ai l a b i l i t y .
I n c r e m e n t a l S p e c t r u m b e yo yo n d t h e
initial allotment was linked to be subscriber base achieved by an operator.
S i n c e 2 0 0 4 , t h e De De p a r t m e n t h a v e b e e n i s s u i n g n e w U n i f i e d
A c c e s s Se Se r v i c e L i c e n c e s a n d a l l o t t i n g 2 G Sp Sp e c t r u m o n c o n t i n u o u s a n d F i r s t -C -C o m e - Fi Fi r s t s e r v e d b a s i s .
Betw een 2004 and 2007 51 new UAS
licences were issued after the introduction of the UAS licensing regime on 11t h November, 2003.
Based on a reference made to the
T R AI A I i n A p r i l 2 0 0 7 a n d T RA RA I s c o n s e q u e n t r e c o m m e n d a t i o n s o f
'no
cap' on the number of players in a service area and introduction of
dual technology licenses, the DoT issued 35 dual technology licenses a n d 1 2 2 U A S L i c e n c e s i n 2 0 0 7 -0 -0 8 . T h e p r o c e d u r e f o l l o w e d b y D o T f o r issue of these 157 licences smacked of serious irregularities leading to
st st a g g e r i n g l o s s t o
the exc hequer.
T h e Co m m i t t e e ' s d e t a i l e d
examination of this subject based on oral depositions by s everal witnesses and scores of written documents obtained from various sources has revealed gross violation of the established norms, rules and
procedures,
dereliction
Ministries/Departments contempt,
for
of
concerned,
considered
duties scant
on regard,
the
part
borderi ng
suggestions/opinions
of
of on the
people/organization that mattered etc. which are highlighted in the s u c c e e d i n g p a r a g r ap a p h s . T h e C o m m i t t e e h a v e a l s o t a k e n st st o c k o f t h e p r o g r es e s s i n t h e r u r a l t e l e p h o n y , br b r o a d b an an d c o n n e c t i o n , h a r m f u l e f f e c t s o f t h e E M F r ad ad i a t i o n e t c .
IGNORING THE ADVICE ADVICE OF OF THE MINISTRY OF LAW & J USTICE
T h e Co Co m m i t t e e n ot o t e t h a t c o n s e q ue ue n t u p o n t h e r e c o m m e n d a t i o n s o f T RA R A I i n A u g u s t , 2 0 0 7 f o r p u t t i n g `n `n o c a p ' o n t h e n u m b e r o f p l a y e r s i n a c i r c l e /s /s e r v i c e a r e a , 5 75 7 5 a p p l i c a t i o n s w e r e r e c e i v e d f o r U A S li li c e n c e s a s o f t h e c u t -o f f d a t e i . e . 1 s t O c t o b e r , 2 0 0 7 . I n o r d e r t o h a n d l e s u c h a h e a v y r us u s h o f a p p l ic i c a t i o n s i n a f a ir i r a n d e q u it it a b l e m a n n e r w h i c h w o u l d b e l e g a l l y t e n a b l e , t h e M e m b e r (T (T e c h n o l o g y ), ), Do Do T w r o t e a l e t t e r t o t h e S e c r e t a r y , D e p a r t m e n t o f L e g a l A f f a i r s s e e k i n g l e g a l o p i n i on on f r o m t h e Attorney General/Solicitor General and suggesting four alternatives. T h e L a w S e c r e t a r y , o p i n i ng ng t h a t t h e i s s u e s w e r e t o o b r o a d a n d h a d t o be refined further, put up a note to the Minister of Law & Justice for his consideration.
T h e M i n i s t e r , a g r e e i ng n g w i t h t h e L a w S ec ec r e t a r y ,
s u g g e st s t e d f o r t h e c o n s t i t u t i o n o f a n Em E m p o w e r e d Gr Gr o u p o f M i n i st st e r s t o c o n s i d e r t h e w h o l e i s s u e . I n r e sp s p o n s e, e , t h e M i n i s t e r o f Co Co m m u n i c a t i o n & Information Technology in his letter to the Prime Minister stated t h a t t h e s u g g e st st i o n o f t h e L a w M i n i s t r y w a s t o t a l l y o u t o f c o n t e x t . T h e Committee deplore the intemperate and indecorous manner in which the considered advice of the Ministry of Law & Justice to refer to the Empowered Group of Minister such an important matter like following a fair and transparent procedure for handling the large number of application for grant of UASL was termed as out of `context' by the M i n i s t e r o f C o m m u n i c a t i o n & I n f o r m a t i o n T e c h n o l o gy g y . T h e D oT oT c o u l d not furnish any cogent ex planation for setting aside the advice of Law M i n i s t e r n o r c o u l d t h e y f u r n i sh s h t h e f i l e c o n t a i n i n g t h e s a i d d ra ra f t l e t t e r .
It is really surprising and shocking that the legal opinion which was sought by the Department on its own volition was rejected by its Minist er. on
Needless to say, by doing so the benefits of t he disc ussion
important
telecom
d e l i b e ra ra t e l y s t y m i e d .
matters
in
an
inter-ministerial
for um
were
T h e Co m m i t t e e a r e o f t h e c o n s i d e r e d o p i n i o n
that seeking legal opinion to handle the large number of applications i n a f ai a i r , t r a n s p a r e n t a n d eq e q u i t a b l e m a n n e r w a s a so s o u n d an an d r a t i o n a l decision but the manner in which the considered advice of the Law M i n i s t e r , on o n b e i n g f o u n d u n p al al a t a b l e , w a s t u r n e d d o w n , o n l y s h o w s t h e m a l a f i d e i n t e n t i o n s o f t h e t h e n M O C& C& I T .
The Committee are shocked to note that contrary to the advice of Ministry of Law & Justice, the Ministry of Com munication & Information Technology had a direct reference made to the Solicitor G e n er e r a l o n 7 . 1 .2 .2 0 0 8 s e e k i n g h i s o p i n i o n o n t h e P r e s s
Release w hic h
was later issued on 10.01.2008 to which the SG opined tha t the proposed course for issue of LOIs `is fair and reasonable' and `make for transparenc y'.
Wh a t i s i n t r i g u i n g i s t h a t t h e S G g a v e a d v i c e o n a
matter for which the Ministry of Law & Justice had advised for r e f e r e n c e t o EG EG OM OM .
The Law Secret ary, w hile deposing before the
Committee has categorically stated that seeking direct opinion of the S G b y p a ss s s i n g t h e M i n i st st r y o f
Law & Just ice is not in line w ith the
rules and proc edures prescribed in this regard. The Att orney General h i m s e l f i s o f t h e o p i ni n i o n t h a t t h e M i n is i s t e r , sh s h o u l d n o t m a k e r e f e re re n c e s t o a n y L a w O f fi f i c e r d i r ec ec t l y .
B u t i t i s q u i t e i nt nt r i g u i n g t h a t t h e L d .
Attorney General, when he was the Solicitor General, has had himself entertained
a
direct
reference
made
by
the
Minister
of
Co m m u n i c a t i o n s & I T .
T h e Co m m i t t e e , t h e r e f o r e , r e c o m m e n d t h a t a
s e r i o us us v i e w m u s t b e t a k e n i n t h e m a t t e r .
T h e Co m m i t t e e a l s o
recommend that the advice given by the Law Ministry particularly on important matters having wide ranging implications must be taken with the seriousness that it deserves and where rejected, reasons m u s t b e f u r n is i s h e d t o t h e L a w M i n i s t r y u n d e r in i n t i m a t i o n t o t h e Ca Ca b i n e t Se c r e t a r i a t .
Fu r t h e r , M i n i s t r y
of
Law
&
Justic e
need to
i ss ss u e
appropriate instructions and procedure so that all cases s eeking advice/opinion
of
Attorney
General/Solicitor
through the administrative Ministry only.
General
are
routed
A serious view must be
taken against any deviation from the established procedure
and
stringent action must be taken against officials who v iolate the prescribed procedure.
The Committee note that in his letter dated 26th December, 2007, the Minister of Communications & IT had apprised the Prime Minister that his discussion with the External Affairs Minister and the Solicitor General had enlightened him to take a pre-emptive and p r o a c t i v e d e c i s i o n o n t h e i s s u e o f UA UA S l i c e n c e s / 2 G S p e c t r u m .
But a
perusal of the then External Affairs Minister's note to t he Prime Minister reveals that he has underlined the responsibility of the Government to frame, revise and change the policy in a transparent manner
and
then
fo fo l l o w
it
in
lett er
and
spirit.
He
has
also
categorically remarked that while keeping on issuing new licences, t h e c r i t e r i a f o r gr gr a n t o f t h e l i c e n c e s m a y b e s t r e n g t h e n e d
and put in
p u b l i c d o m a i n a t t h e e a r li l i e s t . T h u s , i t i s e v i d e nt n t t h a t h e d id i d no no t g i v e any wrong advice to the M/o Communications & IT who in turn
d i s t o r t e d t h e fa f a c t s w h i l e w r i t i n g t o t h e Pr Pr i m e M i ni ni s t e r .
Si m i l a r l y , t h e
Attorney General has clarified in a written note that he has n ever verbally or in writing concurred with any proposed course as claimed b y Sh Sh r i A . R a j a i n h i s l e t t e r d a t e d 2 8 t h D e c e m b e r , 2 0 0 7 . T h u s , n e i t h e r the then External Affairs Minister nor the then Solicitor General had supported
the
then
M/o
Communications
&
IT's
claim
of
being
enlightened by them .
T h e PM P M O' O ' s r e p ly l y t h a t n o s u g g e st st i o n o f t h e L a w M i n i s t e r t o s e t u p an EGOM was received by them does not convince the Committee in v i e w o f t h e f a c t t h a t t h e C o m m u n i c a t i o n M i ni n i s t e r h i m s e l f a p p ri ri s e d t h e Prime Minister of the Law Minister's view alongwith his own view thereon. It implies that the PMO was very much aware of the Law Minister's suggestions, but the counterview of the Communication Minister got overriding preference to the Law Minister's views for some unknown reasons and thus no effort was made by the PMO to i n i t i a t e t h e p r oc o c e s s o f t h e c o n s t i t u t i o n o f t h e EG EG O M .
T h e PM O
certainly either failed to see the forebodings or was rendered a mute spectator.
NOT CONSULTING THE TELECOM COMMISSION
T h e T e l e c o m C o m m i s s i o n w a s s e t u p b y t h e Go Go v e r n m e n t i n 1 9 8 9 w i t h t h e o b j e c t i v e o f f o r m u l a t i o n o f t h e p o l i c i e s o f t h e D o T f o r a p p r o va va l of the Government as well as to oversee the implementation of the p o l i c i e s a n d p r e p a r a t i o n o f a n n u a l b u d g e t o f t h e Do T .
Unfort unately ,
an artificial and convenient division has been created by inclusion of f u l l -t -t i m e a n d p a r t - t i m e m e m b e r s o f t h e Co Co m m i s s i o n .
The permanent
m e m b e r s o f t h e C o m m i s s i o n i n c l u d i n g t h e Ch a i r m a n a r e e m p l o y e e s o f the DoT and the presence of three permanent members constitutes t h e q u o r u m . T h e o t h e r m e m b e r s , p a r t -t -t i m e b u t p e r m a n e n t Go Go v e r n m e n t servants, are Finance Secretary, Industry Secretary, Secretary IT and S e c r e t a r y , P l a n n i n g C o m m i s s i o n . T h e Co Co m m i t t e e n o t e t h a t a s p e r t h e Rules of Business of the Telecom Commission matters of policy relating to telecommunications and proposals for acceptance of any r u l e s a n d p ro r o c e d u r e s w h i c h i n v o l v e s i g n i fi fi c a n t d e v i a t i o n s f r o m n o r m a l r u l e s a n d p r oc oc e d u r e s o f t h e G o v e r n m e n t a r e t o b e b r o u g h t b e f o r e t h e C o m m i s s i o n. n . B u t t h e Co C o m m i t t e e a re r e c o n s t r a i n e d t o f i nd n d t h a t t h e T RA RA I recommendations
of
2007,
which
were
very
crucial
from
the
perspective of the management of the Telecom Sector and Spectrum M a n a g em e m e n t , w e r e n ev e v e r p la la c e d b e f o r e t h e T e l e c o m C o m m i s s i o n . T h e D o T ' s r ep ep l y t h a t i t w a s d i s c u s s e d i n t h e i n t e r n a l T e l e c o m C o m m i s s i o n o n 1 0 t h Oc O c t o b e r , 2 0 0 7 i s u na na c c e p t a b l e i n v i e w o f t h e i r o w n a d m i s s i o n t h a t t h e Re Re s o l u t i o n , R u l e s o f B u s i n e s s a n d Ru Ru l e s f o r t h e T r a n s a c t i o n o f B u s i n es e s s o f t h e T e l e c o m C o m m i s s i o n d o n o t c o n t a i n a n y r e f e re re n c e t o `Internal', 'External' or `Full' Telecom Commission; only the term
`T e l e c o m C o m m i s s i o n ' f i n d s a p l a c e .
Thus, it is est ablished that t he
p r e v a le l e n t p r a c t i c e h a s b e e n d e v e lo l o p e d i n t h e D o T a s a c a m o u f l a ge ge t o take
very
convenient
decisions
through
the
permanent
internal
members of the DoT and avoid uncomfortable decisions in the entire T e l e c o m Co Co m m i s s i o n w h e r e t h e p a rt r t -t - t i m e b u t i n de d e p e n d en en t
mem bers,
p a r t i c u l a r l y t h e Fi Fi n a n c e S ec ec r e t a r y , w o u l d b e r a i s i n g o b j e c t i o n s . T h i s fact has been corroborated by one of the former Secretaries of the De p a r t m e n t
of
disapprove
such
Telecomm unications. a
dubious
The
practice
and
Co m m i t t e e
impress
upon
strongly them
to
henceforth discard distinguishing between the full time and part-time members
or
for
that
matter
between
internal
or
full
Telecom
Co m m i s s i o n a s t h e C o m m i s s i o n i s o n e e n t i t y .
The Telecom Commission was set up for fair and independent working of the DoT but the manner in which the Telecom Commission i s o p e r a t e d , it i t h a s b e e n r e d uc u c e d t o a m e r e c h a r a d e r e n d e ri ri n g i t s v e r y i n t e g r i t y q u e s t i o n a b l e . T h e C o m m i t t e e , t h e r e f o r e , r e c o m m e n d su su i t a b l e amendments in the Business Rules so that it is made mandatory to r e f e r a l l m a t t e r s r e l a t i n g t o p o l i c y a n d c h a n g e i n po po l i c y o r p r o c e d u r e t o the Telecom Commission by doing aw ay w ith t he procedure of internal o r f ul u l l c o m m i s s i o n f o r t h e i r a p p r o v al al . procedural
changes
once
approved
by
n o t i f i e d a f t e r d u e a p p r o va v a l o f t h e Ca b i n e t .
F u r t h e r , a l l s u c h p o l i c y or or the The
Commission Co m m i t t e e
must
be
o b s e r ve ve
that one of the convenient methods adopted by the Department to keep the part-time members at bay is to put in a clause in the Business Rules to consolidate the quorum with the presence of three full tim e mem bers only.
T h e Co m m i t t e e e x h o r t t h e Go v e r n m e n t t o
r e v i s i t t h e T r a n s a c t i o n o f t h e B u s i ne n e s s Ru Ru l e s o f t h e Co Co m m i s s i o n w i t h a view to revising the quorum rule making the presence of the Finance S e c r e t a r y , o r h i s a u t h o r i ze ze d r e p r e s en en t a t i v e n o t b e l o w t h e r a n k o f J o i n t Secretary
in
the
Department
of
Economic
c o n d i t i o n f o r c o n s t i t u t i n g t h e qu qu o r u m .
Affairs,
as
essential
ARBI TRARY CHAN GES IN T HE CUT-OFF CUT-OFF DATE
The
Committee
note
that
in
August,
2007
TRAI
had
r e c o m m e n d e d t h a t t h e r e b e `n `n o c a p ' o n t h e n u m b e r o f l i c e n c e s i n a n y service
area
Government
and in
the
October,
recommendation 2007.
But,
was
accepted
circumventing
by
the
the TRAI
recommendation and bypassing its own decision of the acceptance of t h e r e c o m m e n d a t i o n , t h e Do D o T c a p r i c i o u s l y f o r n o v a l i d r e as as o n s , p u t a n artificial c ap on the number of licenc es to be issued through its Press R e l e a s e d a t e d 2 4 t h Se Se p t e m b e r , 2 0 0 7 . T h e D e p a r t m e n t r e a s o n e d t h a t at the time of reference to TRAI in April, 2007, only 53 applications were pending but after TRAI's recommendation in August, 2007 there was a sudden spurt in the number of applications and hence the Department decided to stop receiving further applications keeping in v i e w t h e l i k e l y a v a i l a b il i l i t y o f Sp S p e c t r u m . T h e De De p a r t m e n t ' s r e as as o n i n g i s unacceptable because TRAI's August, 2007 recommendation was a c c e p t e d b y t h e D oT o T i n Oc Oc t o b e r , 2 0 0 7 b y w h i c h t i m e t h e r e m u s t h a v e been some indications of the number of applications that would be c o m i n g . M o r e o v er e r , t h e Au Au t h o r i t y w a s no no t c o n s u l t e d o n t h e m a t t e r a s i t s r e c o m m e n d a t i o n s w e r e n o t c o n s i d e r e d in in t h e e n t i r e l y n o r t h e i s s u e was placed before the Telecom Commission and a cut-off date was announced.
Astoni shingly, nobody in t he DoT even thought of it as is
corroborated from the fact that no material on record was available w i t h t h e De De p a r t m e n t t o s h o w a n y i n i t i a t i v e i n t h i s r e ga ga r d .
Wh a t i s
worse is that the cut-off date of 1st October, 2007 was advanced to 25th September, 2007 through a Press Release dated 10th January,
2008 in a dubious decision taken by the Minister on 2nd November, 2007.
S u c h a d e c i s i o n w a s t a k e n w i t h o u t t h e a p p r ov ov a l o f t h e f u l l
Telecom Commission which was scheduled to meet on 9.1.2008 but the meeting was deliberately postponed to 15.1.2008 anticipatin g o b j e c t i o n s . Wh a t i s m o r e i m p o r t a n t i s t h a t i t w a s so s o d on o n e de de s p i t e t h e advice of the Prime Minister contained in his letter dated 2.11.2007 emphasizing allocation of spectrum and revision of entry fee in a fair a n d t r a n s p a r e n t m a n n e r . T h e CB I w r i t t e n r e p l i e s s h o w t h a t t h e o f f i c e of
Telecom
applications
Minister and
only
was
personally
after
monitoring
ascertaining
the
the
receipt
receipt of
of
certain
companies by 24.09.2007, the cut-off date was advanced arbitrarily. The High Court of Delhi in the S.Tel case had ruled that "there cannot be a change in the rule after the game has begun" and that the DoT "cannot be allowed to arbitrarily change the cut-off date and that too w i t h o u t a n y j u s t i f i a b l e r e a s o ns ns " .
O n t h i s q ue u e s t i o n w h e t h e r t h i s c u t -o -o f f
date was announced on the basis of availability of spectrum, the former Secretary who has since been charge sheeted, admitted that t h e r e w a s n o s y n c h r o n i za za t i o n a n d n o s c i e n t i f i c a n a l y s i s n o r d i d h e s e e a n y f i l e r e g a r di d i n g a v a i l ab ab i l i t y o f s p e c t r u m .
U p o n t h e s c r u t i n y of of
w r i t t e n a n d o r a l e vi v i d e n c e a n d t h e p e r u s a l o f t h e f i n d i n g s o f t h e O M C, C, t h e C B I a n d t h e j u d g m e n t o f t h e H i g h Co Co u r t o f De De l h i a n d t h e r e f u s a l o f the
S u p r e m e Co Co u r t o n a pp p p e a l by b y t h e Do Do T t o i n t e r f e r e w i t h t h e o r de de r s
o f t h e H i g h C o u r t h o l di d i n g t h e a d v a nc n c e m e n t o f t h e c u t - of o f f da da t e
as
arbitrary and unjustifiable, the Committee refrain from making any f u r t h e r c o m m e n t . N ow o w t h a t t h e C BI B I i s i nv nv e s t i g a t i n g t h e c a s e u n d e r t h e Supreme
Court's
monitoring,
the
Committee
believe
that
i n v e s t i g a t i n g a g e n c y w i l l t a k e t h e c a s e t o i t s l og og i c a l c o n c l u s i o n .
the In
the meantime, the Committee urge upon the Department to desist itself
from
any
gross
irregularity
in
any
future
allotment
of
l i c e n c e /s /s p e c t r u m i n l a r g e r i n t e r e s t . T h e Co Co m m i t t e e a r e p e r t u r b e d t o n o t e t h e a u d ac ac i o u s r e p l y o f t h e Department that neither the cut-off date of 1.10.2007 was pre-poned nor were the applications for grant of UAS licences whi ch were received
after
2 5 .0 .0 9 .2 .2 0 0 7 r e j e c t e d .
The
fact
remains
that
343
applications, received between 26.09.2007 and 1.10.2007, are still pending with the Department and applications received only u pto 2 5 . 0 9 .2 .2 0 0 7 w e r e c o n s i d e r e d f o r g r a n t o f U A S l i c e n c e . T h e De De p a r t m e n t t h e r e f o r e o w e a n e x p l a n a t i o n f o r t h e i r m i s l e a d in in g s t a t e m e n t .
From the written reply furnished to the Committee, it is found that
the
then
MOC&IT
on
2nd
November,
2007
approved
the
advancement of the cut-off date to 25th September, 2007 on the g r o u n d o f a v ai a i l a b i l i t y o f o n l y 1 5 M H z o f Sp S p e c t r u m b u t w h i l e r e p l yi yi n g t o the Prime Minister on the same day, he claimed that t here was 6 0 -6 -6 5 M H z S p e c t r u m s t i l l a v a i l a b l e f o r t h e 2 G s e r v i c e s .
When the
Department was asked to explain the position, they informed tha t there
was
Co m m i t t e e .
a
typographical
error
in
the
material
furnished
to
T h e C o m m i t t e e fi f i n d t h e p l e a o f t y p o g r a ph p h i c a l e r r or o r s e lf lf -
c o n t r a d i c t o r y i n v i e w o f t h e a v a i l a bi b i l i t y o f Sp Sp e c t r u m a s i n d i c a t e d i n t h e letter dated 02.11.2007 of Ministry of Communications & Information T e c h n o l o g y t o t h e Pr Pr i m e M i n i s t e r a n d t h e r e f o r e u n t e n a b l e .
The DoT
therefore, must fix responsibility for such contradictory information f u r n i s he he d t o t h e C o m m i t t e e .
Another
glaring
Department's noting the
Pr Pr i m e
discrepancy
vis-a-vis
Mi Mi n i s t e r .
has
been
noticed
in
the
the Communication Minister's letter to
T h e Co m m i t t e e f i n d t h a t
file noting of the
De p a r t m e n t d i d n o t a n y w h e r e m e n t i o n t h e a v a i l a b i l i t y o f t h e S p e c t r u m in the 900 MHz band whereas the Minister's letter to the Prime M i n i s t e r c a t e g o r i c a l l y i n d ic ic a t e d t h e a v a i l a b i l i t y o f 6 0 t o 6 5 M H z o f 9 0 0 band spectrum .
C l a r i f y i ng ng t h e p o s i t i o n , t h e De p a r t m e n t s u b m i t t e d
that it was expected that Defence would release 60 to 65 MHz of Sp e c t r u m i n t h e 9 0 0 b a n d .
I n t h e c o n t e x t o f S. S. T e l 's 's c a s e , t h e
Department
the
have
informed
Committee
that
the
company's
conditional offer did not merit any consideration since it was in respect of Spectrum in the 900 MHz band which was not available. T h u s , i t i s e v i d e n t t h a t w h e n t h e M i n i s t e r w r o t e t o t h e Pr Pr i m e M i n i s t e r , S p e c t r u m i n 9 0 0 M H z b a n d w a s n o t a v a i l a b l e a nd nd j u s t i n a n t i c i p a t i o n o f v a c a t i o n o f S p e c t r u m b y D ef ef e n c e , h e h a d t h e t e m e r i t y t o m i s l e a d t h e P r i m e M i n i st st e r .
T h e C o m m i t t e e c a s t i g a t e t h e d u b i ou o u s ro r o l e pl pl a y e d b y
t h e o f f i c e r s c o n c e r n e d in i n t h e D ep ep a r t m e n t a n d t h e M i n i s t e r w h o m i s l e d t h e P r im i m e M i n i s t e r o n s u c h i m p o r t a n t m a t t e r s o f al al l o c a t i o n o f t h e s c a r e natural resource.
T h e Co m m i t t e e , t h e r e f o r e , r e c o m m e n d s t r i n g e n t
punitive action against all those responsible for furnishing wrong information
to
Parliament,
suppressing
facts
and
deliberately
m i s l e a d i n g t h e P r i m e M i ni n i s t e r . T h e Co Co m m i t t e e a l so s o b e ap ap p r i s e d o f t h e m e a s u r e s s i nc nc e i n s t i t u t e d t o p r e v e n t s u c h r e c u r r e n c e s .
OVERRULING THE VIEWS AND CONCERNS OF THE MINISTRY OF FINANCE
The Committee note that one of the Terms of References (ToR) of the Group of Ministers (GoM) constituted on 10 September, 2003 was to recommend how to ensure release of adequate Spectrum needed for the growth of the telecom sector.
While discussing this aspect on 30 October, 2003 the GoM
decided that 'the Department of Telecommunications and the Ministry of Finance would discuss and finalise Spectrum pricing formula, which will include incentive for efficient use of Spectrum as well as disincentive for sub-optimal usages'. While the GoM of 2006 was constituted, the Planning Commission had suggested on six ToRs which inter-alia included suggestion for a Spectrum Pricing Policy and related matters. But the original ToRs were revised and Spectrum Pricing Policy did not find a place in the revised ToRs. In this context, the Committee find that the then Telecom Minister wrote to the Prime Minister requesting him to delete the Spectrum pricing issue from the ToRs of the GoM. The Committee are startled to observe the manner in which the then Minister of Communication & Information Technology succeeded in getting revised the terms of reference of the GoM issued by the Cabinet Secretariat under the orders of PMO on 27 th November, 2006 excluding the matter of spectrum pricing from the purview of Ministry of Finance and leaving it solely to the Deptt. of Telecommunications to decide. In the considered view of the Committee such a decision overriding the Cabinet decision of October 2003 ultimately facilitated the successor MoC&IT's dubious decision leading to the 2G Scam. The Committee are shocked that, as required under the transaction of Business Rules, modification in the Cabinet decision of Oct. 2003 was never brought before the Cabinet even for ex-post-facto approval. The DoT owes explanation for such a gross dereliction of duty. The Cabinet Secretary and the PMO knew about these developments but did not take corrective action. Shri D.S. Mathur, the former Secretary, DoT while deposing before the Committee, gave an impression that he was dead against the arbitrary way the Communication Minister was functioning.
But his correspondences with the
Finance Secretary substantiates that he was defending the Minister throughout. The explanation that so long he was in the Ministry he had to defend the policies of the Ministry until he could get the policies changed which he could not and his finally recusing himself from the scene is example where an officer at the verge of retirement does not stand up to protect about what he considers wrong. His claims that he verbally took up the matter with the Cabinet Secretary and the Principal Secretary does not make any sense. Shri Siddharth Behura, another former Secretary, DoT although submitted before the Committee that there was no established procedure in the DoT for process of applications, grant of UAS licence/2G Spectrum etc. and he opposed the method adopted by the Minister, yet he himself became a party to the dirty game. Ms. Manju Madhavan, former Member (Finance), Telecom Commission did not bring to the notice of the Finance Minister/Secretary the disparaging remarks got from the Minister on the file for her rational stance and reasonable and apt suggestions. This is another case where Member (F) also proceeded for retirement. The Committee strongly feel that this situation if allowed to go unchecked, honest and upright officers will ultimately became mute and ineffective and the Government therefore should seriously ponder to remedy the situation. Thus, it becomes apparent that the senior bureaucrats of the DoT were not allowed to discharge their duties properly and effectively, as required for transparent governance. Obviously, the role of Cabinet Secretariat and the PMO remains far from edifying in that they too overlooked the need for compliance with the decision of the Cabinet.
What is intriguing is that when the Cabinet
Secretary wrote to the Finance Secretary in May, 2007 and Secretary DoT for inclusion of spectrum pricing within the ToR of the GoM consistent with the decision of the Union Cabinet of October 31, 2003, there was no correspondence thereafter from the Ministry of Finance with the Cabinet Secretariat.
A close
examination of the documents made available to the Committee shows that ToRs of the GoM were revised on the request of the then MoC & IT and the PMO had considered all relevant aspects of the matter including the Cabinet decision of 2003, and the term of reference for the GoM as suggested by the Planning Commission. Strangely, as against the first note initiated in the PMO, the Joint Secretary recorded a prescient note that the terms of reference as suggested in
the office note may not be “acceptable” to the MoC & IT and it would lead to delay in the commencement of work by the GoM and thus the ToRs were revised as acceptable to MoC & IT with the specific approval of the Prime Minister. To a query of the Committee, PMO clarified that not giving effect to Cabinet decision tantamounts to varying or reversing the Cabinet decision but strangely, they claimed that they had no record to indicate that the Cabinet decision of 2003 was not being followed and clarified that a duty was cast on the Department concerned to give effect to the Cabinet decision. The Cabinet Secretariat has washed off hands by stating that the responsibility of ensuring compliance with the directions of the Cabinet or its Committees rests with the Ministry/Department concerned. What further irks the Committee is the reply of the PMO that there is no specific requirement for the PMO to enforce Cabinet decisions and nor is this the general practice. The Committee wonder if it is not the duty of the PMO or the Cabinet Secretariat to enforce the Cabinet decisions in letter and spirit who else is entrusted with this responsibility?
The Committee are of the firm opinion that
if it was not a requirement earlier on the part of the Cabinet Secretariat and the PMO to ensure the enforcement of the Cabinet decision, the 2G Spectrum scam should be an eye opener for them to at least now start the practice and vigorously monitor the effective compliance to every Cabinet decision. Further, in the context of the role of the Ministry of Finance when the former Secretary DEA was asked as to what transpired after the letter of 29 Nov. 2007 written by Secretary DoT to him, he admitted that there was no exchange of correspondence thereafter but certainly discussions went on. Asked to furnish documentary evidence, he said that everything was not reduced in writing in the Govt, though it was professionally inappropriate, but due to pressure of work it so happened. He further submitted that though things did appear in the papers about the happenings in the DoT but the DEA was not sure that the licences would be issued on a particular date. He failed to recall any reference made by him to the Cabinet Secretariat but admitted he should have briefed the FM. He also admitted lack of due diligence by the Ministry of Finance in the matter. The examination of the files of DEA by the Committee disclosed that on receipt of the last letter dated 29 Nov. 2007 sent by Secretary, DoT to the Finance
Secretary, a self-contained note was put up by Director (Infrastructure) DEA marked to JS(OT)/AS(EA). JS(OT)/AS( EA).
The file was returned without any marking or
signatures as if the whole matter was to be kept at arms length by superior authorities in the Ministry of Finance though gravity of the occasion warranted swift and drastic action on their part but instead chose to be a mute spectator. Another example of callous and irresponsible bureaucratic practice followed by the DoT and the Ministry of Finance can be well gauged from the fact that the DoT in its letter dated 15 th June, 2007 informed the Ministry of Finance that Spectrum pricing and charges being dynamic issues, are to be considered from time to time in consultation with TRAI, but the Ministry of Finance apprised the Committee that they never received this letter. So, it is apparent that some foul game was being played in the corridors of these Ministries. The Committee demand an investigation of this mysterious episode and desire an explanation thereafter to ascertain which Ministry was at fault. Thus, taking note of the above sequence of events that preceded the distortion of the ToRs of the GoM-2006 to remove the Spectrum pricing issue, the Committee cannot but conclude that this decision was taken with the knowledge of the DoT, the Ministry of Finance, the Cabinet Secretariat and the PMO. It is true that not only serious systemic flaws have crept in the governance of these Ministries/Departments but also the malady is deep rooted. The Committee are shocked and dismayed to note that the Finance Minister, in his note dated 15 th January, 2008 acknowledged that Spectrum is a scarce resource and the price of Spectrum should be based on its scarcity value and efficiency of usage but made a unique and condescending suggestion that the matter be treated as closed.
The Committee believe that ends of
accountability demand that any wrongful loss caused to the Government is made good and the guilty brought to justice. The Committee view it most unfortunate that the Finance Minister, the guardian of the public exchequer – and entrusted with the principal task of mobilization of resources for public welfare, instead of initiating stringent and swift action against all those responsible for the whopping loss to the exchequer pleaded with the Prime Minister to treat the matter closed.
FIRST-COME-FIRST FIRST-COME-FIRST -SERVED(FCFS) SERVED(FCFS) CRI TERI ON
The Committee note that the First-Come-First-Served (FCFS) basis for the issue of Licences and Allocation of Spectrum has been f o l l o w e d b y t h e D e p ar a r t m e n t o n t h e a r g u m e n t t h a t t h e a n no n o u n c e d U A SL SL guidelines have made it open for new licences to be issued on c o n t i n u o u s b a s i s . T h e Co m m i t t e e ' s s c r u t i n y o f t h e r e c o r d s r e v e a l t h a t in the Basic Service Licences guidelines, there is a reference to FCFS but nowhere in the UASL guidelines, the term FCFS has found a m e n t i o n i m p l y i n g t h e r e b y i t h a s n o s a n c t i t y . I n f ac ac t , o n 2 4 t h N o v e m b e r , 2003, the then Minister of Communications and IT had approved the Department's proposal to give licence Spectrum on FCFS basis, but it w a s n o t c o d i f i e d i n t h e U A SL SL g u i d e l i n e s . T h u s , t h e r e h a s b e e n n o s u c h legally established principle as 'FCFS', at best it can be termed as a prescription
to
be be f o l l o w e d
fo fo r g r a n t
o f l i c e n c e /S /Sp e c t r u m .
This
prescription was adopted and applied inconsistently and in deviation of the avowed objective of the NTP-99 for providing a level playing f i e l d t o t h e p r o sp s p e c t i v e a p p l i c a n t s /p /p l a y e rs rs .
The greatest demerit of
the FCFS criterion is that there is every possibility of exclusion the b e s t a pp pp l i c a n t ' s o f f e r .
A n d t h a t w a s w h a t e x a c t l y h a p p en en e d i n t h e
g r a n t o f UA U A S l i c e n c e s i n 2 0 0 7 -0 -0 8 .
It w as used as a tool to favour
c e r t a i n n o n -s -s e r i o us us a p p l i c a n t s i g n o r i n g t h e r e q u e s t o f t h e s e r i o u s a n d establ ished
players.
The
CV C
observat ions
and
t he
On e
Man
Committee (OMC) findings have substantiated this fact and the CBI i n v e s t i g a t i o n i s r e i n f o rc rc i n g i t .
T h e Co Co m m i t t e e , t h e r e f or or e , u r g e u p o n
t h e D o T t o r e v i s i t t h e F CF C F S c r i t e r i o n , a do do p t e d b y t h e m i n t h e g r a n t o f l i c e n c e /S / S p e c t r u m a n d t a k e e f f e c t i v e m e a s u r e s t o e n s u r e t h a t t h e F CF CF S basis is not misused and abused, should they still prefer to continue w ith that basis after a comprehensive relook at it. Much to the consternation of the Committee, the FCFS basis as adopted by the DoT, notwithstanding its merits and demerits was not followed
in
letter
and
spirit
as
is
evident
from
the
fact
that
applications submitted between March, 2006 and 25th September, 2007 w ere issued LOIs simult aneously on 10th January, 2008. In t his context, the Committee find that the procedure followed pr ior to 7.1.2008 was that the date of receipt of application in DoT was reckoned for the purpose of FCFS which was changed to the date of i s s u e o f L O I w . e . f . 7 . 1 . 2 0 0 8 i n a n a b r u p t a n d a r b i tr a r y d e p a r t u r e f r o m t h e e x t a n t p r a c t i c e . S h r i D .S .S . M a t h u r , f o r m e r S e c r e t a r y , D o T s u b m i t t e d before the Committee that the extant policy in the allocation of UAS licences/2G Spectrum was not permitted to be used properly by the Department .
S h r i S i d d h a r t h a B e h u r a , f o r m e r Se Se c r e t a r y , D o T ( s i n c e
c h a r g e s h e e t e d ) t e s t i f i e d t h a t i n t e r -s -s e s e n i o r i t y s h o u l d b e d e t e r m i n e d by the date of application, a condition which he had inserted in the draft Press Note of 10.1.2008 which was deleted by the Minister and t h u s o v e r r u l i n g t h e De De p a r t m e n t ' s v i e w s .
Sh r i N r i p e n d r a M i s r a , t h e
former Chairman, TRAI categorically emphasized that all those who c o m p l e t e t h e f o r m a l i t y o f t h e L OI OI s w i t h i n 1 5 d a y s , s h o u l d r em em a i n i n t h e s a m e o r de d e r as a s on o n i n t h e a p p li li c a t i o n d a t e .
B u t , t h e Co Co m m i t t e e a r e
shocked how by devising a capricious and opaque procedure, the applications submitted between March 2006 and 25.9.2007 w ere issued the LOIs simultaneously on a single day on 10 January, 2008
and asked to fulfil the conditions and to collect the same within less than an hour under the order of MOC & IT as against the prescribed p e r i o d o f 1 5 d a y s un u n d e r t h e p r o c e d u r e fo fo l l o w e d h i t h e r t o .
Ev i d e n t l y ,
the chosen companies had foreknowledge of such novel method with the result they were able to fulfil the conditions of PBG, FBG and Demand Drafts drawn on dates prior to the cut off date by the DoT. The Committee deplore the brazen manner in which the LOIs were i s s u e d de d e s p i t e a s s u r a nc nc e t o t h e P r i m e M i n i s t e r t h a t t h e p r o c e s s i n g o f applications would be done in consonance with the extant practice a n d f u l l t r a n s p a r e n c y m a i n t a i n e d i n t h e Do Do T .
ROLE OF MEDIA AND WHISTL EBLOWERS
The Committee note that the brazen irregularities in the allotment of 2G spectrum and UAS licences were unravelled by some investigative journalists much before the Radia tapes came into the public domain. A journalist who played a stellar role in exposing the irregularities, on being asked about the sources of his information, replied that the information was collected through the RTIs and from some public-spirited insiders.
The publishers of the news
magazines who first published the tapes, testified that they were actuated by their journalistic duty to reveal the truth and the irrepressible urge of public interest. The Committee appreciate the exemplary professional job done by these journalists who despite the imminent possibility of the serious hazards both physical and financial undertook the venture they embarked upon.
When the
Committee sought the response of a senior journalist about these taped conversations he candidly deposed that what they did was utterly unprofessional. He conceded that the journalists do speak to various sources as it is their job to fathom out and reveal the truth but they ought not get involved in lobbying for any one and certainly the taped conversations show that they transgressed the line of propriety - the ‘lakshman rekha’. More so, senior journalists as they were, they knew when they made such a transgression. The Committee value immensely the freedom of the Press and, therefore, do not wish to suggest any model code of conduct for the media. The Committee believe that no journalist who values self-reputation, credibility and treasures the freedom of the media will ever indulge in an act incompatible with the professional norms of journalistic conduct.
The Committee have unflinching belief and faith in a free,
fearless, bold and credible press and the electronic media as such journalists are the sine-qua-non of a vibrant democracy of the people, for the people and by the people. The Committee’s oral examination of various witnesses and the material evidence on record
revealed the singular role played by the whistleblowers whistleblow ers in
exposing the irregularities.
Undoubtedly, the whistle- blowers, driven by the
sense of probity in public affairs, took a calculated risk in help exposing the
grave irregularities regardless of the perils of the venture they embarked upon. The witnesses sought the indulgence of the Committee to protect the source of their information apprehending grave threats to their lives.
Mindful of the
apprehension of grave threats to the life and limb of those invisible and selfeffacing but gallant sentinels on the qui vive, the Committee recommend that, being the willing and self-less benefactors of the nation, the whistleblowers be extended
appropriate and effective statutory
protection from harassment,
intimidation, demotion, physical or financial harm etc., the multi-pronged strategy to conduct of public affairs.
as an integral part of
bring greater transparency
and probity in the
Presumptive Loss
The Committee note with profound concern the nation-wide public shock and indignation over the gross irregularities in the allotment of 2G spect rum and the colossal fiduciary loss caused to t he public exc hequer.
We l l b e f o r e
t h e C& A G
report
Parliament , in his pet iti on to the Supreme Court, c a l c u l a t e d a n e t l o s s o f Rs Rs . 9 7 ,4 ,4 1 0 . 7 4 c r o r e w ell know n telec om expert possible loss
betw een
mult iple of indicators. spect rum
and former
w as tabled
in
S h r i S. S w a m y
a n d Sh Sh r i B .K .K . Sy Sy n g a l , a
C M D B SN SN L q u a n t i f i e d t h e
R s .7 .7 0 , 0 0 0 t o R s .8 .8 0 0 0 0 c r o r e b a s e d o n a S h r i S i t a r a m Y e c h u r y M P, P, t a k i n g
the 3G
p r i c e ’ d u a l t e c h n o l o gy gy l i c e n c e s a n d a l l o t m e n t o f e x c e s s
s p e c t r u m a s b en e n c h m a r k , c a l c u l a t e d t h e l o s s t o t h e w h o p p i ng ng o r d e r o f R s .1 .1 , 9 0 ,0 ,0 0 0 c r o r e . the
T h e C& C& A G b a s e d o n a s e t o f p a r a m e t e r s p e g g e d
p r e s u m p t i v e l o s s a t R s .1 .1 , 7 6 ,6 ,6 4 5 .
r o u g h l y b e t w e e n R s .4 .4 0 , 0 0 0 c r o r e premise The
The CBI calc ulat ed t he loss
t o R s .5 .5 0 , 0 0 0 c r o r e b a s e d
on t he
o f t h e p r of o f i t s m a d e b y Sw Sw a n a nd n d U ni n i t e c h b y s a l e of o f e q ui ui t y .
CBI
however
investigation Committee
on are,
clarified
crim inal
that
they
conspiracy
however,
shocked
were
and to
the
note
concentrating money that
trail.
pending
the The their
e x a m i n a t i o n o f t h e C & A G Re Re p o r t , t h e M i n i s t e r o f C o m m u n i c a t i o n s a n d Information Technology addressing a press conference on 17.1.2011 described the presumptive loss calculated by the C&AG as ‘utterly erroneous
and
embarrassing
c a l c u l a t i o n m e t h o d o l og og y
to
the
Govt’.
He
desc ribed
the
a d o p t e d b y t h e C& A G ‘ w i t h o u t b a s i s a n d a
serious error on the part of the constitutional authority’ and charged t h a t t h e s e n s a t i o n t h u s c a u s e d ‘a ‘a l l o w e d t h e O pp pp o s i t i o n t o s p r e a d u t t e r f a l s e h oo o o d ’. ’.
T h e C o m m i t t e e d i s a p p ro r o v e s t h e p u bl bl i c c r i t i c i s m o f t h e
i n s t i t u t i o n o f t h e C& C& A G a n d P a r l i a m e n t i t s e l f .
More so, the frontal
attack was made by the Minister whose Ministry and his predecessor were under scanner and at a time when the matter was under e x a m i n a t i o n i n t h e PA P A C, C , ob o b v i o u s ly l y w i t h a n i n t e n t t o c o n f u s e a nd nd c r e a t e fissures.
It is surprising that t he Minist ry of Finance responsible for
macro management of the economy and mobilization of resources for development, has made no assessment of the loss on the ostensible g r ou o u n d t h a t i t is i s d i ff f f i c u l t t o w o r k i t o ut ut e x c e p t s p ec e c t r u m is i s a s c a r c e r es e s o ur ur c e
c o n c e d i ng ng t h a t
a n d t h a t t h e sp sp e c t r u m c o m m a n d s
p r e m i u m a s t h e m a r k e t e x p a n d s . I n t r i g u i n g l y , n e i t h e r t h e Do Do T n o r t h e T R AI AI h a s q u a n t i f i e d
the preci se loss. Unfort unatel y, t he DoT inst ead
o f a d m i t t i n g a n u n c o n s c i o n a b l e a c t , a d va va n c e d t h e p l e a t h a t t h e o r e t i c a l exercises based on economic modeling are fraught with simplistic a s s u m p t i o n s a n d t h a t n o m e t h o d o l og og y c a l c u l a t e t h e l os os s . attitude
of
DoT
c a n b e s u g g e st s t e d by by t h e m t o
T h e C o m m i t t e e d e p l o re re s u c h a n i n t r a n s i g e n t
attempting
to
defend
the
indefensible
even
on
h i n d s i gh g h t g i v e n t h e f i n d i n g s o f t h e e x p e r t s e n g a g e d b y t h e T RA RA I , w h o found that the value of 2G spectrum is higher than 3 G in rural segments, the unexpectedly high earnings from 3G revenue and the written advice of the PM for auction of 2G spectrum in a fai r and tr ansparent manner.
On t he presumpt ive loss
o f R s .1 .1 . 7 6 c r o r e , t h e
C&AG has himself explained to the Committee that the calculation w a s b a s ed e d on o n c e rt r t a i n e c o n o m e t r i c or or t r y i n g d i f f e r e nt nt e c o n o m e t r i c
mathematical methods after
m o d e l s a n d c o n s u l t a t i o n w i t h CA CA s a n d
t h u s t h e l o s s o f r ev e v e n u e t o t h e G o v e rn rn m e n t c a l c u l a t e d o n r e a l m a r k e t situations cannot be
faulted but may be debated.
The C&AG has
further explained that accountability is fixed in the Government after the events are investigated and drew the attention of the Committee to
t h e C& C & A G r e p o r t w h i c h s ay a y s t h e en e n t i r e p r o c e s s o f al al l o c a t i o n o f 2 G
spectrum
r a i s e s s e r i o us u s c o n c e r n ab a b o u t t h e s y st s t e m o f g o ve ve r n a n c e i n
t h e Do D o T w h i c h n ee ee d t o b e t h o r o u g h l y r e n e w e d a n d r e v a m p e d . The Committee feel that giving dual technology licence to the CDMA
operators
and
new
UAS
licences
in
2007-08
at
a
price
determined in 2001 was not only imprudent but also smacks of a d e s i g n. n.
I g n o r i ng ng t h e v o l u n t a r y o f f er e r o f a Co Co m p a n y t o p a y m u c h m o r e
than the 2001 price even without auction did not p ersuade the G o v e r n m e n t t o r ea e a l i ze ze t h e t r u e m a r k e t p r i c e o f s p e c t r u m .
Si m i l a r l y ,
allotment of additional Spectrum, beyond the contractual amount, to the
GSM
operators
Department
was
themselves
at have
a
cost
to
realized
the and
exchequer are
which
reportedly
the
taking
m e a s u r e s t o r e c o v e r i t . R e v e n u e g e n e r a t i o n f r om om t h e a u c t i o n o f 3 G & BWA Spectrum in 2009 unquestionably established the true value of Sp e c t r u m . compared
A r g u m e n t s i n s o m e q ua ua r t e r s t h a t t h e 3 G p r i c e c a n n o t b e with
the
2G
price
are
untenable
simply
beca use
two
d i f f e r en e n t m e a n s w e r e a d o p t e d f o r t h e a l l o c a t i o n o f 2 G & 3 G Sp Sp e c t r u m . In one case, there was no transparency and violation of established norms, rules, proc edures, cabi net dec isions
et al
w a s w r i t l a r ge ge t h e r e ,
w h e r e a s i n t h e o t h e r c a s e s i t w a s q u i t e t r a n s p a r en en t a n d i n a c c o r d a n c e w i t h t h e d e c i s i o n s t a k e n at at v a r i o u s l e v e l s .
I n ot ot h e r w o r d s , h a d t h e
a l l o c a t i o n o f 2 G Sp Sp e c t r u m m a d e t h r o u g h a f a i r an an d t r a n s p a r e n t m e t h o d like auction as recommended by the TRAI and also advised by the
Prime Minister, no accusation would been raised against a fair and tr ansparent procedure regardless of the revenue realized. Since t hat was not done and 2G Spectrum was arbitrarily given at a throwaway price and 3G auction gave revenue five times more than the base price,
the
two
are
certainly
comparable
and
accor ding
to
the
Committee, maximum loss to the exchequer was on this count. T h e r e f or o r e , it i t i s i m p e r a t i v e a n d i n c u m b e n t u p o n t h e G o ve ve r n m e n t t o g e t calc ulated the exact loss caused to the exchequer instead of washing o f f t h e i r ha ha n d s o n t h e s i m p l i s t i c p l e a t h a t i t i s d i f f i c u l t t o e s t i m a t e t h e loss.
T h e C o m m i t t e e f u r t h e r r e c o m m e n d t h a t t h e Go Go v e r n m e n t m u s t
evolve a standard, fair and transparent procedure to avoid pecuniary loss to the Government and recover the unlawful gains made by all t h o s e r e s p o n s i b l e f o r t h e s t a g g e r i ng ng n a t i o n a l l o s s .
CLEANSING THE BUREAUCRACY The Committee note with profound concern that there is no foolproof system to detect the misdeeds of corrupt elements in the bureaucracy, the permanent standing machinery of the Government intimately associated with the formulation and
responsible for execution
of
the
diverse plans
and
programmes of the State. The Committee are anguished that the accountability procedures in the Government continue to be defused and weak and it becomes almost difficult to fix individual responsibility. They consider the very concept of accountability
null and void if nobody knows who is responsible for the acts of
omission and commission in the bureaucratic labyrinths.
Another area of
serious worry is, as shown by recent happenings in the DoT, the administrative powers of
postings and transfers which is used as a powerful
leverage to
reward pliant officers and to punish or marginalize officers of unimpeccable integrity who refuse to be privy to wrongdoing or decline to render palatable advice.
It is all the more unfortunate that India, the largest democracy of the
world, is viewed so poorly in terms of global corruption perception index. The Committee recall approvingly the words of Kautilya who wrote in the 3 rd century BC that it is possible to mark the movement of birds flying high up in the sky but it is not possible to ascertain the
movement of Government servants with a
hidden purpose or like the quantification of water drunk by swimming fish. The Committee, therefore, recommend that the system of concurrent internal audit needs to be strengthened and accorded full autonomy with a duty cast on each Financial Advisor to report all financial irregularities to the Finance Ministry as well as to the statutory audit.
Further, each Department/Ministry Department/Mini stry must have
CVOs with well defined mandate to maintain unremitting vigil on the internal functioning of the Department. It also needs to be ensured that the CVOs are selected in consultation with the CVC after following fair and transparent procedure to avoid any bias or allegation of favouritism. The Committee hardly need to reiterate that the anti-corruption laws must be stringent enough to create the trepidation of law and deter the public servants from wrongdoing, provide for speedy trial and guarantee that justice is not denied or delayed.
The
Committee also recommend that the entire data regarding cases of corruption showing the complaints received, cases under enquiry,
referred for police
investigation, officers charge sheeted, convicted and not found guilty must be placed in public domain and also reflected in the consolidated report of the CVC to
be presented to Parliament annually.
Recognizing the functions of
constitutional institutions like the C&AG, and premier agencies like the CVC and the CBI and their vital role and the need for safeguarding their independence and credibility, a transparent system needs to be evolved for their appointment. The Committee, therefore, recommend that a panel under the Chairmanship of the Prime Minister comprising of a judge of the Supreme Court, Home Minister and Leader of Opposition be formed for appointment of the C&AG, CVC and the Director CBI. The Committee are saddened to find a discernable but disturbing pattern
in some
top
civil servants joining private sector including
public
relation firms soon after their retirement. The names of some recently retired civil servants, who held significant positions in the Government and tribunals and joined certain private public relations firms
or business houses,
public scanner for their allegedly questionable
are under
role in the 2G Spectrum
allocation. In order to break such an unholy nexus and the prospect of any quidpro quo, it is essential that all officers of the rank of Secretaries
to the
Government of India are debarred from joining any tribunal and nongovernmental company or firm by providing a cooling-disconnect of three years after retirement. The Committee are of the considered view that such a resolution of the Government would eliminate the apprehensions expressed in many quarters about the Government or private sector dangling a lucrative assignment to a civil servant on the verge of retirement, allegedly for extraneous reason.
Sh o r t c o m i n g s i n t h e I m p l e m e n t a t i o n a s p e c t
The
Committee’s
scrutiny
reveals
the
flip-flop
in
the
implementation of the UASL regime which was approved by
the
Cabinet in 2003 based on t he rec omm endation of t he TRAI.
The
Committee note that the UASL regime was to be implemented in two phases, viz, (a) migration of existing Basic Service Operators (BSOs) and Cellular Mobile Service Operators (CMSO) to the new regime on payment of migration fee equal to the fee paid by the 4
th
Cellular
Op e r a t o r i n t r o d u c e d t h r o u g h m u l t i s t a g e b i d d i n g p r o c e s s i n 2 0 0 1 , a n d (b) starting of the second phase with a notional entry fee for licence a n d a s e pa p a r a t e c h a r g e f o r t h e sp sp e c t r u m .
W h i l e t h e f i r s t p h a se se w a s
i m p l e m e n t e d , t h e s e c o n d p h a s e w a s c o n v e n i en e n t l y a n d i n t e n t i o n a l l y, y, a s subsequent events substant iate, overlook ed. In the process, devising an efficient allocation formula for Spectrum alongwith an appropriate p r i c e r e m a i n e d u n a c h i e v e d as as d e l i n k i n g t h e p r i c e o f S p e c t r u m f r o m t h e issue of licences was given a go bye, disregarding the
Cabinet
d e c i s i o n . Th T h e Co C o m m i t t e e a r e d e e p l y d i st st r e s s e d t h a t d u e t o v i o l a t i o n o f the
Cabinet
decision
and
as
a
consequence
of
such
deliberate
omission, the issue of UAS license and alloc ation of Spect rum in 200708 at the price discovered in 2001 caused a staggering, but wholly avoidable, revenue loss.
Moreover, consi dering t he nascent
tele
market in 2001 and the geometric increase in the tele density post 2001, it is quite intriguing that the non-implementation of the second phase of the UASL regime was not placed before the Cabinet for a
review.
W o r s e , d e s p i t e t h e r e c o m m e n d a t i o n o f t h e T RA R A I i n M a y 2 0 10 10
and February 2011, delinking of the price of Spectrum f rom the issuanc e of licenc e is yet to tak e place.
T h e DO DO T ’ s r e a s o n i n g o f n o t
implementing the second phase of the UASL regime on the plea of w a i t i n g f o r T RA RA I r e c o m m e n d a t i o n s h a s m i s e r a bl bl y f a i l e d t o i m p r e s s t h e C o m m i t t e e . Si Si m i l a r l y , t h e De D e p a r t m e n t ’ s a ud ud a c i o u s r e p l y o f n o t p u t t i n g t h e m a t t e r b e f o r e t h e Ca C a b i n e t , w i t h o u t a s s i g n i n g a n y v al a l i d r e a s o ns ns f o r t h a t , i s h i g hl h l y d e pl p l o r a b l e . T h e Co Co m m i t t e e , t h e r e f o r e , r e c o m m e n d t h a t henceforth
non-compliance
to
non-achievement
and
modification/variation of any decision of the Cabinet should invariably be put before the Cabinet for their consideration, failing which th e C a b i n e t Se S e c r e t a r i a t s h o u l d t a k e a s e r i o u s n o t e o f i t t o f i x r e s p o n s i b il il i t y o n t h e d e l in i n q u e n t M i n i st s t r i e s /D /D e p a r t m e n t s . T h e Co Co m m i t t e e a l so s o d e s i re re that the price of Spectrum be delinked from the issue of lic ences without further delay and seek explanations as to why this important d e c i s i o n h a s n o t b e e n i m p l e m e n t e d a s y e t . Fu r t h e r , a s t r o n g s y s t e m o f m o n i t o r i n g a n d c o m p l i a n c e o f C a b i ne n e t d e c i s i o n s m u s t b e e v o l v e d a nd nd firmly put in place by revisiting the transaction of Business Rules in order to ensure that the Cabinet decisions are implemented in letter a n d s p i r it i t a n d n o u n d ue ue a d v a n t a g e i s t a k e n o f t h e s y s t e m i c l o o p h o l e s by the ravenous fly by night operators created as front companies by unscrupulous elements.
C o o l i n g d i sc sc o n n e c t a f t e r r e t i r e m e n t
T h e Co C o m m i t t e e a r e s a d d en e n e d t o f i n d a d i s c e r n a b l e b ut ut d i s t u r b i n g patt ern
in some
top
civil servants joining private sect or including
p u b l i c r e l at a t i o n f i r m s s oo o o n af af t e r t h e i r r e t i r e m e n t .
The names of some
recently retired civil servants, who held significant positions in th e Government and tribunals and joined certain private public relations firms or business houses, are under public scanner for their allegedly questionable
r o l e i n t h e 2 G S p e c t r u m al al l o c a t i o n .
such an unholy nexus essential
that
all
I n o r d e r t o b r ea ea k
a n d t h e p r o s p e c t o f an a n y q u i d -p -p r o q u o , i t i s
officers
of
the
rank
of
Se c r e t a r i e s
Government of India are debarred from joining any t ribunal governmental company or
the
a n d no no n -
f i r m b y p r o v i di d i n g a c o o l i n g -d -d i s c o n n e c t o f
t h r e e y ea e a r s a f t e r r et et i r e m e n t . view that such a resolution
to
T h e Co m m i t t e e a r e o f t h e c o n s i d e r e d o f t h e Go v e r n m e n t
w ould eliminate the
apprehensions expressed in many quarters about the Government or p r i v a t e s e c t o r d a n g l in in g a l u c r a t i v e
a s s i g n m e n t t o a c i v i l s e r v a nt nt
t h e v e r g e o f r e t i r e m e n t , a l l e g e dl d l y f o r e x t r a n e o us us r e a s o n .
on
Combating the malaise of corruption
The Committee note that the grave irregularities in the allotment of 2G spectrum and the colossal fiduciary loss triggered deep and spontaneous outrage both in and outside the Parliament. The spate of popular anguish and anger against the scourge of corruption and the inordinate delay in prosecuting the wrongdoers, impelled the Supreme Court to intervene in the matter. The Committee are pleased that the CBI has since filed the first charge sheet against the accused for forgery, criminal conspiracy, cheating and on other counts before the Court of Special Judge, New Delhi.
The Committee, however, strongly
believe that the cancer of corruption which is eating into the vitals of our polity and economy calls for a frontal attack since corruption subverts the rule of law, erodes institutions, creates feelings
of hostile discrimination aggravates
disparities, erodes the moral and ethical values of the society, tarnishes the image of the nations and worst, undermines the legitimacy of the Government and the faith of the people in the democratic set up. The Committee, therefore, are of the considered view corruption
need
that
all laws
dealing with different aspects of
a comprehensive relook and a drastic overhaul,
with
far
greater focus on tackling upstream corruption as it breeds and promotes down stream corruption.
They believe that not only caesar’s wife but even the
caesar’s men ought to be above board. The Committee note with profound dismay the general feeling amongst the corrupt public servants who consider corruption as low risk and high profit business. Considering
the urgent need
for zero tolerance for corruption, the Committee recommend enactment of a stringent preventive and punitive legislation to (a) provide for calibrated scale of punishment based on the premise that higher the post, higher the degree of responsibility and share of punishment. working of the bureaucracy so s o that it accordance with law
(b)
Stop undue interference in the
works without fear or favour
and in
(c) make provision for fast track adjudication of cases
against persons occupying high positions and charge sheeted for corruption so that the guilty are punished without delay and the punishment so inflicted acts as an effective deterrent and (d) disqualify or render ineligible a person for public office or high position once convicted for corruption. The Committee hope that the
country-wide
deep disgust
against corruption
would fructify into
creating a strong awareness to create a political and economic system with zero tolerance for corruption. The Committee also recommend that India, being a signatory to the UN Convention on Corruption, also ratify the UN convention against corruption expeditiously and demonstrate to the world community India’s unequivocal and unwavering commitment to the crusade against corruption.
INV ESTIGATI ESTIGATI ON OF THE 2G SPECTRUM SPECTRUM CASE BY TH E CBI
The Committee's examination of the subject reveals that a source information about allegations of irregularities in the allocation of 2G spectrum under the UAS licencing was being processed in the CBI w.e.f. 12.1.2009. On learning that the CVC was also looking into the matter since January-February, 2008, the CBI decided to await the CVC enquiry report. The CVC on receipt of specific complaints, started a direct enquiry on 17.6.2009 U/S 8(1) (d) of the CVC Act 2003 and after completing the inquiry, it sent the inquiry report to the CBI vide their letter dated 12.10.2009 for further investigation. The CBI accordingly registered an FIR U/S 120B of the IPC for criminal conspiracy read with section 132 r/w 12(1) (d) of the PC Act for criminal conduct. The FIR was registered against unknown persons though the CBI normally registers a preliminary enquiry in which they establish who are the persons responsible and then they lodge an FIR, as admitted by the Director CBI, in evidence. But in the instant case, as the CVC in their Direct Inquiry Report did not name anyone, the CBI lodged the FIR against unknown persons expecting them to be in the DoT, private persons and companies. However, after the investigation took momentum, the unknown persons have been identified, chargesheeted and some arrested.
In
this context, the Committee disapprove of the practice of lodging FIR against unknown persons in deviation of the normal practice followed by the investigating agency and suggest that, as far as practicable, the CBI should identify and name the persons while lodging FIR in order to foster transparency and inspire public confidence. The Committee note that the CBI started its raids in October, 2010 after a year of lodging the FIR i.e. in October, 2009 and arrests were made thereafter. Clarifying the reasons for delay in investigating the case, the Director CBI submitted that examination of a lot of records, interrogation of many witnesses collation of information gleaned, its analysis etc. caused the delay. In a post evidence information the CBI apprised the Committee that 1,626 documents running into 1,38,765 pages had already been seized and 115 relied upon witnesses, as mentioned in the chargesheet filed by the CBI on 2nd April, 2011, had been interrogated. The Committee appreciate the volume of work the CBI
has to attend to in the process of its investigation but such a plea cannot be taken
as a valid reason for the inordinate delay on the part of the CBI in
investigating the 2G Spectrum scam. The public perception remains, and quite justifiably, that the CBI's investigation gained momentum only after the Supreme Court started directly monitoring the case thereby fueling the apprehension that the CBI was initially tardy in investigation under undue external pressure. Either does not augur well for the nation or the credibility of the CBI. The Committee note that the CBI, the premier investigative agency of the Union, has been set up under the Delhi Special Police Establishment Act 1946. Surprisingly, the expression CBI does not occur in the said Act but derives its nomenclature from a resolution of the M/o Home Affairs dated 1 April, 1963. The Committee further note that as on 1 st March , 2001, as against the sanctioned strength of officers and staff of 6538, there were 1368 vacancies with the largest shortage of officers in the executive rank.
Apparently, being an organization
which has built a reputation for its professional competence efficiency and acquired a definite
credibility and respect,
demand for entrusting
there is far greater and growing
complex cases to the CBI for investigation.
The
proliferation in the responsibilities of the CBI to continues to place enormous burden on the badly strained organization. Apart from the shortage of manpower and resources, there is a strongly felt need
for insulating the CBI from any
adverse external influence or pressure. The Committee, therefore, recommend a comprehensive cadre review of the CBI, preferably an IIM study, so that agency is fully and well-equipped with necessary material and manpower. The Committee also recommend that the Delhi Special Police Powers Act may be replaced by a new and comprehensive legislation namely, the Central Bureau of Investigation Act with a mandatory provision for appointment of the Director CBI akin to a modified procedure for appointment of the CVC in order to safeguard the integrity, autonomy and independence of the CBI. Further, suitable rules may made under the law so contemplated to provide for broad time schedule for investigations, filing of charge sheets and follow up of cases with utmost dispatch and diligence. The Committee would also like the Government to make six monthly statements in Parliament with regard to the stages of various cases undertaken by the CBI for investigation charge sheets filed the final outcome
thereof including the judgments delivered, convictions held and the number of accused held not guilty.
GRANT OF LICENCES TO INELIGIBLE COMPANIES
The Committee during its scrutiny of issue of Licenses to ineligible Companies found that certain Companies which had declared real estate as their business activity in their main object clause of MoA had been awarded licences; certain Companies which did not have authorized share capital/paid up capital on the date of applying for UAS Licenses were given the same; the Department of Telecommunications (DoT) failed in cross verifying the status of Companies with the Ministry of Corporate Affairs; there was gross violation of rules & regulations to favour M/s Swan & Unitech; S-Tel having won cases on the issue of arbitrariness in cut-off date was forced to withdraw its case in the Supreme Court owing to DoT raising false Security concerns; and apart from subverting rules & regulations, in case of M/s Swan, BSNL was made to sign an MoU for providing intra-circle Roaming Arrangement. An independent expert with vast experience of Telecom Sector testified before the Committee that 'all pseudo methods' and 'dirty tricks' were used by these companies to get into the telecom market at the cost of tax payers' money.
2.
The Committee found that as many as 85 Licenses out of the 122 new
licenses issued to 13 Companies in 2008 were granted to those Companies which did not satisfy the eligibility conditions prescribed by the DoT. All 85 Licenses were given to Companies which did not have the stipulated paid up capital at the time of application. The Committee found that in order to increase the authorized share capital Extraordinary General Meetings were held and resolutions passed to the said effect. The enabling provisions of the Companies Act, 1956 allows Companies to increase their authorized share capital by way of passing resolutions through General Body Meetings and also by way of application to the said effect to the ROC within 30 days or beyond that with a payment of fine. The Committee disapprove the manner in which these applications were processed by the DoT though they did not meet the eligibility criteria. The Committee would like to know the outcome of the showcause notices issued to these ineligible
companies the responsibility fixed on the officers responsible for the serious lapses and the steps taken to cancel the licences of all those companies which were ineligible or furnished fictious information and suppressed material facts.
3.
The Committee note that, these Companies had declared real estate as the
business activity in the main object clause of MOA instead of telecom sector as on the date of application. However, the subsequent resolutions altering the main object clause of MOA had not been registered as on the date of application. The Committee found that the UAS guidelines of 14 th December, 2005 did not stipulate that the telecom sector be the declared activity of the Companies applying for grant of licences. The Committee are of the considered opinion that this major lacuna in the guidelines helped all and sundry to apply for licences, thus frustrating the desired intention of the Government of bringing in greater competition in the telecom sector. Further, the Companies which were granted licences in turn sold them making huge wind fall gains, what experts described as the true value of the Spectrum, which were actually to go to the Government coffers.
The Committee, therefore, recommend that the Government make an
assessment of the loss to the public exchequer. 4.
When the Committee asked about the measures that were taken by DoT to
make the verification process fair and transparent, the Department
submitted
that as a matter of abundant precaution, the DoT had taken an undertaking from the applicant Company to the effect that licences granted on the basis of incorrect undertaking given to the DoT, their applications would be cancelled and necessary
action
taken
under
the
provisions
of
the
UAS
Licence
Guidelines/agreement. When the Committee specifically wanted to know about the action that was taken/proposed to be taken against the Companies who had suppressed facts, disclosed incomplete information and submitted fictitious documents for getting UAS Licences/Spectrum, they were apprised that certain Companies who had not met eligibility criteria, as pointed out in CAG Reports, had been issued Show Cause Notices. Further it was stated that the Companies had submitted their replies and the same were under the examination of the Department. The Committee would like to know the present status of those cases and the action taken against such Companies after consulting the Ministry of
Company Affairs and the Ministry of Law and Justice as also the explanation of guilty officials and the steps taken to fix responsibility.
5.
The Committee in the course of examination of issuance of Licences to
ineligible
operators
found
that
'The
Economic
Times'
dated
9th January, 2008 had published an article titled '6 fail to cross DoTted line' in which the Companies that were to be awarded Licences had been named. The article had clearly stated that 'DoT to Issue LOIs to 10 Companies' and naming them as 'Lucky 10', it stated that Unitech, Datacom, Stel, HFCL Infotel, BPL, Shyam
Tele,
Swan
Communications,
Idea,
Tata
Tele
and
Reliance
Communications were those Companies. The article further stated that DoT would begin issuing the LOIs from Wednesday and try to complete the process by that weekend. In order to have clarity on the issue that certain Companies were privy to the information about the time when the LOIs were to be issued, the Committee cross examined the representatives of M/s Etisalat DB Telecom Pvt. Ltd. (formerly known as M/s Swan Telecom Pvt. Ltd.) The Committee asked the representatives as to how on 10 th January, 2008, when LOIs were issued and 45 minutes time between 2.45 pm and 3.30 pm was given to fulfil the requirement of submitting the drafts, a Demand Draft for
50 crore drawn on Punjab National
Bank of Mumbai could reach Delhi from Mumbai on the same day. The witness in their written submission have stated that most of the applicants had deposited the same on 10 th January 2008. Further, regarding the clarification of the DD, it was stated that the DD was drawn on Punjab National Bank in New Delhi and a photocopy of the same was annexed. But to the dismay of the Committee they found that instead of
50 crore DD drawn on PNB they were furnished with a
copy of Banker's Cheque dated 9.1.2008 drawn on SBI, New Delhi for
203.60
lakhs. The Committee view this very seriously as the concerned Company failed to clarify the correct position with regard to the financial instruments deposited by the Company with DoT and recommend that the matter be enquired into and correct and complete information be furnished to the Committee alongwith the action taken against defaulter companies.
6.
The Committee found that rules were violated in order to accommodate
and favour a few Companies. The licences had been issued to Companies which had suppressed facts, disclosed incomplete information and submitted fictitious documents to the DoT and thus used fraudulent means for getting UAS licenses and spectrum. Owners of these licenses had obtained them at unbelievably low prices and had in turn sold significant stakes in their companies to the Indian/foreign companies at high premium within a short period of time. The premium earned by these new entrants to the telecom sector was nothing but the true value of the spectrum, which should have normally accrued to the public exchequer. The Committee, therefore, recommend that all those Companies who suppressed facts and furnished fictitious documents be sternly dealt with in accordance with the undertakings taken from them before signing the Licence agreements and the Committee apprised. 7.
The scrutinisation of the Subject further revealed that different decisions
were taken in respect of M/s Loop Telecom Pvt. Ltd. and M/s Swan Telecom Pvt. Ltd. with regard to alleged violation of the substantial equity clause 8 of UAS Guidelines. In the case of M/s Loop Telecom Pvt. Ltd. a reference was sent to Ministry of Corporate Affairs for examination but in case of M/s Swan Telecom Pvt. Ltd. the Minister had decided that SG's opinion may be sought as he was representing the DoT in TDSAT and at other Judicial Forums including in the High Court, Delhi. The SG in his opinion had held that the applicants fulfiled all the necessary conditions cannot really be faulted". However, when DoT officials again sought permission to refer the matter to the Ministry of Corporate Affairs for investigation, the Secretary (T) on 17.04.2009 held the view that 'in view of the opinion of SG no such reference is required' and the Minister approved the same on 18.04.2009. The Committee find that the DoT wrongly referred the case to SG directly without routing the case through Ministry of Law and Justice as required. The Committee, therefore, come to inescapable but firm conclusion that both the Ministry of Communications and Information Technology and the SG were equally responsible for favouring M/s Swan by circumventing the due procedure. Since the then Secretary, DoT stands chargesheeted, the Committee demand explanation of the then 'SG' the Law Officer, as to why he prevented the DoT from referring the matter to Ministry of Corporate Affairs. The Committee also deplore
the role of the Minister who went out of the way to ensure that certain Companies which were granted UAS Licences were disqualified or rendered ineligible had the matter been referred for the opinion of Ministry of Corporate Affairs. 8.
Examining the role of DoT in issuing the Licenses and the follow-up action
the Department was taking once Licenses were granted, the Committee found that TRAI had sought compliance of licence terms and conditions pertaining to roll out obligations from all the service providers who had been issued licenses from December 2006 onwards. TRAI, having analysed the reports submitted by the licensees, found that while some licensees had complied with the roll out obligations, there were those who had not complied with the roll out obligations at all. Most licensees had complied with the roll out obligations but with delay beyond 52 weeks from the due date of compliance. TRAI quoting clause 35 of the licence
conditions,
which
provided
for
imposition
of
Liquidated
Damages/Cancellation in case of delay/non-compliance of rollout obligations, had requested DoT to take immediate necessary action. When the Committee asked why DoT on its own had not taken any action against the defaulting operators, DoT's reply on the matter was far from convincing. The Committee find that DoT had grossly failed in its duty of having a watch over the compliance aspect once the licenses were issued.
9.
The Committee note that M/s S Tel challenged the legal validity of the Press
Release dated 10.01.2008 as the Press Release arbitrary advanced the cut-off date as 25.09.2007 and they were deprived from being granted LOIs for UAS Licences for 16 circles for which they had applied after 25.09.2007. A single Judge and
later a division bench
ruled in S Tel's favour
holding the said
advancement of the cut of date as arbitrarily and illegal. The Hon'ble Supreme Court on appeal by DoT refused to interfere with the order of the Delhi High Court. The Committee learnt that the M/s S. Tel decided not to pursue with the case as they had received a letter regarding the cancellation of the commercial launch citing security reasons by the DoT. But, on the contrary, the Committee found that the Company was arm-twisted to withdraw the case despite having received favourable verdicts from the High Court and upheld by the Supreme Court. Since the impugned Press Release was quashed by the High Court of
Delhi being arbitrary and unjustified, the Committee recommend that necessary logical action be taken to cure the adverse fall out of the arbitrary action leading to gross discrimination and favouritism. 10.
The Committee in the course of examination learnt that BSNL had signed a
Memorandum of Understanding with M/s Swan on 13.10.2008 for providing IntraCircle Roaming Arrangement to Swan's GSM subscribers in the BSNL's GSM network. When the Committee wanted to know the circumstances that led to BSNL permitting a Private Company to share its infrastructure and the amount that BSNL charged for the purpose, the Committee were apprised that the interest of BSNL was fully protected. The arrangement was entered into only with M/s Swan Telecom Ltd., to start with and it was on non-exclusive basis. Further, it was added that BSNL did not have any free arrangement with M/s Swan but had well defined charging arrangement like usage charges including 52 paise per minute (or part thereof) to begin with and to be reviewed accordingly as per the terms of MOU. On being specifically asked to furnish the payment details alongwith relevant Annual Gross Revenue (AGR) Statements filed by M/s Swan/Ms Etisalat, DoT replied that in view of non-implementation, no claims were applicable and no charges were levied and collected. Further, it was added that 'No LSA-wise agreement had been signed, no resources had been shared, no facility had been extended in any manner and also no payment or any financial transaction had taken place between either of the Organisations'.
As former
CMD, BSNL and a telecom expert, deposed before the Committee that BSNL did not allow any roaming arrangement to any private operator, why Swan when asked, he said "Swan is special". The Committee would like to be apprised of the rationale, of such an exclusive arrangement of M/s Swan with the BSNL, the impact of the arrangement on the market valuation of M/s Swan, the basis for determining the usage charges @ 52 per minute, the examples of any such parallel agreement between the private players in India and the reasons for transferring the officers of DoT who opposed such an arrangement.
The
Committee, therefore, strongly feel that the entire issue of licencing and allocation needs to be revisited and a foolproof and transparent procedure devised to avoid recurrence of such shameful incidents entailing loss of revenue. The Committee also recommend that the Government take into consideration the
vital concerns of internal security and defence and evolve sound system and procedure and place the same before the Committee expeditiously. *****
NON-ADHERENCE NON-ADHERENCE TO THE PRIME MIN ISTER'S ADVICE AND MISLEADING HIM TH ROUGHT ROUGHT
The Committee are highly perturbed to note that the considered and imperative advice given by the Prime Minister and
genuine
concerns expressed by him on the developments in the Tele com S e c t o r i n h i s l e t t e r d a t e d 2 nd N o v e m b e r , 2 0 0 7 t o t h e t h e n M i n i s t e r o f Communications and IT, was just disregarded by him. The Pri me M i n i s t e r , w a s i n f ac a c t m i s l e d w h e n h e w a s i n f or or m e d b y t h e M i n i s t e r t h a t the
issue
of
auction
of
Spectrum
was
considered
but
not
r e c o m m e n d e d by by t h e T e l e c o m C o m m i s s i o n a n d a l s o n o t r e c o m m e n d e d b y T RA RA I . T h e M i ni n i s t e r w a s s a yi y i n g h a l f t r u t h , c o n c e a l i n g t h e o t h e r h al al f c o n c e a l i n g h i s ul u l t e r i o r d e s ig ig n .
A s a m a t t e r o f f a c t a n d a s h a s be be e n
reported to the Committee, the TRAI recommendations of August, 2 0 0 7 w a s n e v e r p l ac a c e d b e f o r e t h e T e l e c o m C o m m i s s i o n n o r d i sc sc u s s e d by
them
betw een
the
date
of
submission
of
the
T RA RA I ' s
r e c o m m e n d a t i o n a nd n d t h e d at a t e o f M i ni n i s t e r ' s l et et t e r . T h e o f f i c i a l s o f t h e Do T w h o a r e t h e f u l l t i m e M e m b e r s o f t h e C o m m i s s i o n c o n s i d e r e d t h e T RA R A I r e c o m m e n d a t i o n s a n d t h e Fi F i n a n c e Se Se c r e t a r y a n d o t h e r p a r t t i m e Members were deprived of the discussion on such an im portant m a t t e r . S e c o n d l y , i t w a s n ot o t e v e n t h o u g h t p r o p e r t o c o n s u l t T RA RA I f o r a s e c o n d o p i n i o n o n t h e i r ' N o Ca Ca p ' r e c o m m e n d a t i o n w h i c h l e d t o a s p u r t i n t h e n u m b e r of o f a p pl pl i c a t i o n s f o r U A S L i c e n c e .
Not only that , the
M o C& C& I T a r r o ga g a n t l y t e r m e d t h e s u g g e st st i o n s o f t h e M i n i s t e r o f L a w a n d Justice to refer the Spectrum related matter to on EGOM, as "out of
c o n t e x t " . H e a u d a c i o u s l y i n f o r m e d t h e Pr P r i m e M i n is i s t e r t h a t t h e c u t -o f f d a t e h a s b e e n f i x e d a s 2 5 t h Se p t e m b e r , 2 0 0 7 o n t h e p l e a o f s h o r t a g e o f S p e c t r u m w h e r e a s o n an a n o t h e r o c c a s i o n h e a pp p p r i s e d t h e Pr Pr i m e M i n i s t e r that there was enough scope for allotment of Spectrum to few new operators
even
after
meeting
o p e r a t o r s an a n d l ic ic e n c e e s .
the
requirements
of
the
existing
A n o t h e r g l ar ar i n g i n s t a n c e o f h i s m i s l e a d i n g
the Prime Minister was his intimation to the Prime Minister about the a v a i l a bi b i l i t y o f S p e c t r u m i n t h e 9 0 0 M H z b an an d w h i c h w a s n o t a v a i l a b l e t h e n a n d w a s s u b j e c t t o v a c a t i o n b y t h e De De f e n c e M i n i s t r y .
His
assurance to the Prime Minister that he was not deviating from the e s t a b l i s h e d a nd nd e x i s t i n g p r o c e d u r e s w a s a b l a t a n t l i e a s h e d e f o r m e d a n d d i s t o r t e d t h e FC FC FS FS p o l i c y .
To top it all, his tone and tenor of the
2 6 t h D e c e m b e r , 2 0 0 7 l et e t t e r t o t h e Pr Pr i m e M i n i s t e r t h a t s i n c e t h e f i l e f or or i s s u e o f t h e L O I h a d b e e n a p p r o v e d b y h i m o n 2 nd N o v e m b e r , 2 0 0 7 , h e proposed
to
implement
his
decision
without
further
delay
demonstrat ed his arrogance and sense of one upmanship bordering on open
defiance.
Committee's
All
the
above
unmistakable
ment ioned
conclusion
fact s that
reinforce the
the
former
Communications Minister deliberately and disminedly mislead the Prime
Minister
in
order
to
fufil
his
nefarious
desig n
leading
to
staggering loss of revenue which also tarnished the image of the country. T h e De D e p a r t m e n t ' s r e p l y i n t h e d e f e n c e o f t h e i r M i n i s t e r f u r n i s h i ng ng comparative figures of increase in tele-density, rural telephony and d e c r e a s e i n A v e r a g e Re Re v e n u e p e r U s e r (A (A RP RP U ) a n d t a r i f f i s n o t n e i t h e r convincing
nor
tenable.
The
Co m m i t t e e
outrightly
reject
the
contention that since Spectrum was given in 2007-08 at a throwaway
p r i c e , i t l e d t o i n c r e a s e i n t e l e -d -d e n s i t y a n d a f a l l i n t a r i f f . B y t h e e n d o f 2007, there was enough competition in the Telecom Sector , the t e l e -d -d e n s i t y w a s s h o w i n g e n c o u r a g i n g u pw pw a r d t r e n d a n d t h e t a r i f f w a s coming
down
at
a
noticeable
pace
because
of
the
competition,
technological advances and the market dynamism and certainly not d u e t o a l l o t t i n g Sp Sp e c t r u m a t a d i r t . S o f a r a s t h e r o l e o f t h e PM PM O w a s c o n c e r n e d , t h e C o m m i t t e e f i n d that despite noting the Communications Minister's decision not in conformity with the Transaction of Business rules which provide that "cases in which a difference of opinion arises between two or more Ministers and a Cabinet decision is desired, shall be brought before the Cabinet", the PMO did not enforce the above Transactio n of Business Rules to sort out the difference of opinion between the Minister of Law and Justice and the Minister of Communica tions and Information Technology. The Committee's examination reveals a strange sequence of events relating to the processing of the Communication Minister' s letter
dated
commenced
26 th December, 3 1 st
from
3 1 st J a n u a r y , 2 0 0 8 .
2007
in
t he
December,
P M O. O.
2007
The and
proc essed closed
on
T h e C o m m u n i c a t i o n s M i ni ni s t e r ' s l e t t e r a n d t h e
E x t e r n a l A ff f f a i r s M i ni ni s t e r ' s n o t e w i t h a s u g g e s t e d c o u r s e o f a c t i o n w a s submitted to the Prime Minister on 7 th January, 2008, after 12 days of the Communications Minister's letter. On 11 th January, 2008, the Private Secretary to P.M conveyed the desire of the PM to take into a c c o u n t t h e de d e v e l o p m e n t s c o n c e r n i n g t h e i ss ss u e o f l i c e n c e s .
It is
p e r t i n e n t t o n o t e h e r e t h a t t h e U A S L i c e n c e s h a d a l r e a dy d y b e e n i s s u ed ed on
10th
January,
2008.
The
file
w as
resubmitt ed
to
the
PM
o n 1 5 t h J a n u a r y , 2 0 0 8 w i t h a c l a r i f i c a t o r y n ot ot e . T h e f i l e w a s r e c e i v e d back
with
the
Private
Secretary
to
the
PM's
note
that
the
" P r i m e M i ni n i s t e r w a n t s t h i s i n f o r m a l l y sh s h a r e d w i t h t h e D e pa pa r t m e n t " a n d does not want a formal communication and wants PMO to be at arm's length".
T h e s e q u en e n c e of of e v e n t s t h i s t e s t i f i e s s o m e u n f o r t u n a t e
o m i s s i o n s . O n 3 r d J a n u a r y , 20 20 0 8 , b y j u s t a c k n o w l e d g i n g t h e M i n i s t e r ' s lett er, the PM seemed to have given his an indirect green signal to go ahead w ith his plan and decisions.
Wh a t c o n c e r n s t h e Co Co m m i t t e e i s
t h e f a c t t h a t w h e n t h e Co Co m m u n i c a t i o n s M i n i s t e r w a s i n s u c h a h u r r y t o implement his decisions, there was no plausible reason to submit the f i l e t o t h e PM PM a f t e r 1 2 d a y s . Se c o n d l y , t h e r e i s n o l o g i c i n c o n v e y i n g the Prime Minister's desire to take into account the licence issues on 11th January, 2008 when the process had already been over a day b e f o r e . T h i r d l y, y , t h e r e i s n o j u st st i f i c a t i o n t o s h a r e s u c h i m p o r t a n t i s s u e s w i t h t h e Do Do T in in a n i n f o r m a l m a n n e r .
T h e l a s t b u t n o t t h e l ea ea s t , t h e
Prime Minister's desire to keep the PMO at arm's length indirectl y helped the Communications Minister to go ahead and execute his unfair, arbitrary and dubious designs. The Committee are shocked and dismayed to note that the F i n a n c e M i n i s t e r , i n h i s n o t e d a t e d 1 5 t h F e b r u a ry r y , 2 0 08 08 a c k n o w l e d g e d that Spectrum is a scarce resource and the price of Spectrum should be based on its scarcity value and efficiency of usage but made q unique and condescending suggestion that the matter be treated as closed.
T h e C o m m i t t e e b el e l i e v e t h a t e n d s o f a c c o u n t a b i l i t y de de m a n d
that any wrongful loss caused to the Government is made good and t h e g u il i l t y b r ou o u g h t t o j u s t i c e . T h e C o m m i t t e e v i e w i t m o s t u n f o rt rt u n a t e s i n c e t h e Fi Fi n a n c e M i n i s t e r , t h e g u a r d i a n o f t h e p u b l i c e x c h e q u e r – a n d
entrusted with the principal task of mobilization of resourc es for public welfare, instead of initiating stringent and swift action against a l l t h o s e r e s p o n s i bl b l e f o r t h e w h o p p i ng n g l o s s t o t h e e x c h e q u e r, r , p l ea ea d e d w i t h t h e P r i m e M i ni ni s t e r t o t r e a t t h e m a t t e r a s c l o s e d . T h e Co m m i t t e e c a n n o t r e s t s a t i s f i e d u nl n l e s s t h e m a t t e r i s p ro ro b e d i n i t s e n t i r e t y a n d t h e reasons for such an unusual act on the part of Finance Minister are explained to the nation.
F u r t h e r , t h e Co Co m m i t t e e f i n d t h e r o l e o f t h e
then Secretary, DEA deficient and wanting as he failed to bring the m a t t e r t o t h e n o t i c e o f t h e Ca C a b i n e t Se Se c r e t a r y o r e v e n i n w r i t i n g t o t h e F i n a n c e M i n i s t e r e v e n a f t e r i r r e g ul ul a r i t i e s b e c a m e p u b l i c a n d t h e r e w a s p u b l i c o ut u t c r y fo f o r hu h u g e l o s s t o t h e p u b li l i c e x c h e q u er er .
T h e Co m m i t t e e
seek explanation from the then Secretary, DEA and all those wh o c h o s e t o b e s i l e n t b y s t a n d e r o r r a t h e r i n d u l g e n t l y c o n d e s c e n d i n g a nd nd p l e a d ed ed f o r f o r g e t t i n g t h e l o s s a n d t r e a t i n g t h e c h a p t e r a s c l o s e d .
The Committee take note of the assertion of the Prime Minister before the Editors of the Electronic Media on 16.02.2011 and in the R a j y a S a b h a d e b a t e o n 2 4 . 0 2 . 2 0 1 1 t h a t h e d i d n o t p ro c e e d i n t h e matter or pricing of Spectrum as he was informed on 4.07.2008 that the Ministers for MOC&IT and Minister of Finance had worked on agreed
formula
on
Spectrum
charges
in
line
with
the
TRAI
r e c o m m e n d a t i o n . T h e C o m m i t t e e ar a r e o f t h e v i e w t h a t t h e s a id i d a gr gr e e d formula if any, was reached between the two Ministers aft er six mont hs of the allocat ion of UAS Lic ence/2G Spectr um.
The point
remains to be answered as to what preceded 10 th January, 2008 and reasons for everyone remaining mute spectators till the damage was done.
I n an a n y c a s e , t h e Co Co m m i t t e e w o u l d l i k e b o t h t h e M i n i s t r i e s t o
furnish them the agreed formula on Spectrum pricing/charges as arrived at by both t he Ministers. The Committee would further like to point out that the Prime M i n i s t e r ' s s t a t e m e n t t h a t r e v e n u e g e n e ra ra t i o n h a s n e v e r b e e n a p r i m a r y consideration is self-contradictory in view of his own statement in India Telecom – 2007 to the effect that the revenue potential to the G o v e r n m e n t m u s t n o t b e l o s t s i g h t o f a s Go Go v e r n m e n t a c r o s s t h e g l o b e h a v e h a r n e ss s s e d s u b s t a n t i a l r ev e v e n u e w h i l e a l l o c a t i n g Sp Sp e c t r u m .
The
PMO is required to reconcile the two divergent views of the Prime Minister.
THE RADIA TA PES PES
The justification for examining and commenting on the 'Radia Tapes' becomes imperative on the part of the Committee in view of some of the conversations
between
Ms.
Nira
Radia
on
the
one
hand
and
some
politicians/journalists/bureaucrats on the other, centering around allocation of portfolios in the Union Cabinet, payment of bribe in the allotment of 2G Spectrum etc. which has a direct bearing on the subject under examination of the Committee. In this context, the Committee find that the transcripts of the Radia Tapes were first published in the 'Outlook' and the 'Open Magazine'. The Editor of the 'Open Magazine' and the Editor-in-Chief of the 'Outlook' submitted emphatically before the Committee that they published some selected transcripts of the Radia Tapes in the national and larger public interest.
They have also
categorically declared the authenticity of the published documents and informed the Committee that nobody whose transcripts they have printed has challenged their veracity and none of them has so far taken recourse to any legal action against either of the magazines for publishing the transcripts. The Committee commend the brave initiatives taken by the two magazines in larger public interest indischarge of their journalistic duly to reveal the truth.
Ms. Nira Radia while deposing before the Committee stated that the publication of her conversations with many people in some magazines was a part of corporate conspiracy against her but did not disclose who the conspirators are. Similarly, while responding to various queries of the Committee, she gave an impression that she was predetermined not to come out with the facts.
The
Committee feel that her reluctance to speak the truth is somehow an indication of her guilty conscience.
A good deal of Radia Tapes contain conversations which center around the anxiety to get the Telecom Ministry portfolio allocated for the second time to Shri A. Raja as the conversations show that Shri Tata has had a bad chemistry with
Shri Dayanidhi Maran, as per his own admission.
Shri Ratan Tata's personal
hand-written letter to Shri Karunanidhi, the DMK President and the Chief Minister of Tamil Nadu, praising Raja's achievements, is an irrefutable testimony. The Committee are surprised that a person of Tata's stature sent a personal letter to the DMK patriarch when the latter had nothing to do with framing and implementation of policies at the central level.
The Committee agree that a
personal hand-written letter should not have been commented upon by them but since it was made public and shows keen interest and involvement of big Corporate Houses in the ministerial portfolio allocation, a matter which has a direct bearing on the subject under examination of the Committee.
The
Committee consider it a sad reflection on the manner and style of governance and electoral politics and the Radia tapes only reveal the proverbial tips of the iceberg and provides glimpses of the often unreported back room deals, shady trade offs, the role of middlemen who have acquired certain hallow of respectability by assuming more fashionable and modern nomenclatures, corporate wars, quid pro quos between lobbyists and certain journalists, unsatiable greed for wealth etc.
The Committee, however, feel that the
disclosures made by the tapes have given a new fillip and stimulus to the crusade against corruption.
PERFO PERFORMAN RMAN CE OF OF TH E DEPARTMENT DEPARTMENT IN VARI OUS SCHEMES SCHEMES
(i )
Rural Tele-density
The teledensity
Committee has
note
reached
that
5 5 .3 .3 8
as per
on cent .
May, In
2010 this
the
overall
cont ext ,
the
C o m m i t t e e f i n d t h a t t h e u r b a n t e l e d e ns ns i t y h a s g o n e u p f r o m 2 0 . 7 4 p e r c e n t i n M a r c h , 2 00 0 0 4 t o 1 1 0 . 6 9 p er e r c e n t i n D ec ec e m b e r , 2 0 0 9 w h e r e a s t h e rural teledensity has increased from 1.57 per cent in March, 2004 to 2 1 . 1 9 p e r c e n t i n De c e m b e r , 2 0 0 9 .
Although the rural tel edensity has
reached the Eleventh Plan target of 25 per cent, yet it has not kept pace
with
the
impressive
growth
in
the
urban
areas
reportedly
b e c a u s e o f l ac a c k o f b a c k h a u l c o n n e c t i v i t y , a c c e s s s e rv r v i c e s , a va v a i l a b i l it it y of power, affordable and easy to charge handsets, time taken for acquisition of Land for BTSs due to permission requirement from forest department/tribal
areas
or
gram
panchayats,
requirement
of
permission from multiple jurisdictions for Right of Way, unavailability o f c h e a p a n d f a s t b a c k h a u l c o n n e c t i v i t y a n d L o w A v e r ag a g e Re R e v e n u e p er er U s e r ( A RP RP U ). ).
Although the Department
are report edly t aking a
n u m b e r o f s t e p s l i k e V P T s u n d e r B h a r a t N i r m a n P r o g ra m m e , S h a r e d M o b i l e I n f ra r a s t r u c t u r e Sc S c h e m e a n d a n u m b e r o f s c h e m e s u n d e r t h e U SO SO F u n d , t h e r u r a l t e l e d e ns n s i t y i s f a r b e h i n d t h e s t u p e n d ou ou s g r o w t h i n t h e urban sect or.
T h e C o m m i t t e e , t h e r e f o r e , i m p r e s s up u p o n t h e Do Do T t o
intensify the measures initiated in that direction besides making
efforts towards removing the above-mentioned impediments so that r u r a l t e l e d e n s i t y g e t s a b o o s t . T h e T RA RA I ' s v a r i ou ou s r e c o m m e n d a t i o n s i n 2005, 2009 and 2010 relating to the growth of telecom services with special attention towards rural telecom penetration also need to be t a k e n i n t o a c c o u n t f o r t h e p u r p o se se .
(ii)
B r o a d ba ba n d Co n n e c t i v i t y
T h e Co Co m m i t t e e n o t e t h a t t h e El E l e v e n t h Pl P l a n t a r g e t f o r B r o a db db a n d Connections
was
achievement
as
20 on
million 30th
11 million connect ions.
by
the
November,
end
of
2010
2010
has
whereas
been
less
the than
T RA RA I h as a s r e po p o r t e d t h a t t h e pr p r i m a r y r e as as o n s
f o r l o w b r o a d ba b a n d p e n et e t r a t i o n s a r e l ac a c k o f s u p p o rt rt i n f r a s t r u c t u r e , n o n availability of 3G & BWA Spectrum, difficulty in getting Right of Way, H i g h C u s t o m e r P r e m i s e s E q u i p m e n t ( C P E ) , L o w L i t e r a cy a n d N o n a v a i l a bi b i l i t y o f r el el e v a n t c o n t e n t .
I n or or d e r t o e n s u r e r a p i d s p r e a d o f
b r o a d b a n d b o t h i n t h e u r b a n a n d r u r a l a r e a s T R A I h as i s s u e d a c o n s u l t a t i o n p a p e r o n " N a t i o n a l B r o a db d b a n d Pl P l a n " o n 1 0 t h J u n e , 20 20 1 0 , covering
various
aspects
such
as
definition
of
broadband,
infrastructure requirements, supply and demand, affordability an d Ri g h t o f Wa y .
T h e C o m m i t t e e a l s o n o t e t h a t t h e De De p a r t m e n t a r e
making efforts to increase the broadband connections by launching a n u m b e r of o f s c h e m e s . I n t h i s r e g a r d, d , t h e Co Co m m i t t e e w o u l d s p e c i f i c a l l y l i k e t o p o i n t o u t t h a t i n u r b a n a r e as a s b r o a d ba ba n d d e m a n d w i l l p i c k u p a s a n d w h e n s u c h s e r v i c e s a r e a v a i l a bl b l e o n c o m p e t i t i v e b as as i s . Si m i l a r l y , i n r u r a l a r e a s h i g h s p ee e e d i n t e r n e t c o n n e c t i v i t y a v a i l a b l e a t r e a s o na na b l e rates
w ould
help
increase
the
b r o a d ba ba n d
connect ions.
The
C o m m i t t e e , t h e r e f o r e , r e c o m m e n d t h a t t h e Do Do T s h o ul ul d t a k e a c c o r d i n g m e a s u r e s , b e s i d es e s a d d r es e s s i n g t h e b o t t l e n e c k s a s p o in i n t e d o u t b y T RA RA I , to give a fillip areas.
t o t h e b ro r o a d b a nd n d c o n n e c t i o n s i n b o t h r ur ur a l a n d u r b a n
T h e C o m m i t t e e ap a p p r e c i a t e t h e s t e p s be b e i n g t a k e n by b y TR TRA I i n
order to ensure the quality of broadband service and desire that the Authority should continue its endeavour in that direct ion.
(iii)
M o b i l e N u m b e r P o r t a b i l i t y ( M N P) P) The Committee note that the Mobile Number Portability (MNP)
allows subscribers to retain their existing mobile telephone number when
they
switch
from
one
access
service
provider
to
another
i r r e s p ec ec t i v e o f m o b i l e t e c h n o l o g y o r f r o m o n e t e c h n o l o g y t o a n o t h e r o f the same or any other access service provider. Such portability benefits subscribers, encourages improvement in quality of service through increased level of competition between service providers, rewarding those operators having better customer service, network c o v e r a g e , a n d s e rv rv i c e q u a l i t y . I n t h i s c o n t e x t , t h e C o m m i t t e e f i n d t h a t TRAI has been recommending since 2006 the implementation of the MNP
Scheme
in
the
country.
But
the
DoT
has
been
repeatedly
e x t e n d i n g t h e d e a d l i ne ne f o r t h e i n t r o d u c t i o n o f t h e S c h e m e o n t h e p l e a of delay in procuring the gateway equipment on the part of the BSNL and MTNL. In its latest communication dated 19.07.2010 TRAI has requested DoT not to extend the dead line further. The Scheme was f i n a l l y l a u n c h e d b y Do Do T o n 2 5 .1 .1 1 . 2 0 1 0 , d e s p i t e g i v i n g a s s u r a n c e t o t h e Committee in evidence that it would be launched by the extende d dead line of 31.10.2010 from the original dead line of 31.03.2009 for
Delhi and 31.12.2009 for the rest of the Country. In this context, the C o m m i t t e e w o u l d l i k e t o p o i nt n t o u t t h a t a s c h e m e w h i c h b e ne n e f i t s b ot ot h subscribers and the service providers should have not been delayed i n o r d i na n a t e l y a n d t h a t t o o a f t e r r e p e at a t e d r e c o m m e n d a t i o n s a n d re re q u e s t from TRAI. However, now that the Scheme has been launched, the C o m m i t t e e d e s i r e t h a t s e r i o u s e f f o rt rt s s h o u l d b e m a d e f o r i t s e f f e c t i v e i m p l e m e n t a t i o n t h r o u g h ou ou t t h e c o u n t r y . The Committee are pleased that the Prime Minister in his letter dated 2.11.2007 to the former Minister of Communications and IT emphasized the need for an "early decision on issues lik e rural telephony, infrastructure sharing, 3G, Broadband, Number Portability and Broadband Wireless Access, on which the TRAI has already given r e c o m m e n d a t i o n s " . T h e C o m m i t t e e h o p e t h a t a t l e a s t i n t h e s e ar ar e a s of concerns of the PM, the DoT would take appropriate and speedy measures to reinstate the confidence of the Prime Minister and the nation in them. (iv)
M o b i l e V i r t u a l N e t w o r k O p e r a t o r ( M V N O) O) The Committee note that the concept of the Mobile Vir tual
Network Operator (MVNO) scheme was conceptualize to provi de s p e c i a l i ze z e d s e r v i c e s t o t h e p u b l i c b y t h e v i r t u a l o p e r at at o r s a s t h e m a i n o p e r a t o r s m a y n o t b e a b l e t o g i v e s u c h s e r v i c e s . Ho Ho w e v e r , a s p e r t h e licensing agreement the main operator will remain responsible for e v e r y i n f o r m a t i o n b e i n g g i v e n b y t h e v i r t u a l o p e r a t o r . T h e Do Do T i s a b o u t t o s t a r t t h e s c h e m e . I n t h i s c o n t e x t , Sh Sh r i B .K . K . Sy Sy n g a l h a s g i ve ve n s o m e valuably
suggestions
on
licensing
and
regulatory
framework,
infrastructure, service obligation, revenue sharing and cross holding
and merger and acquisition which have been brought out in detail in C h a p t e r – X V o f t h i s R e p o r t . T h e Co Co m m i t t e e d e s i r e t h a t t h e D o T s h o u l d appropriately consider the suggestions given by Shri Syngal while introducing the scheme. (v)
EMF Radiation by Tow ers The Committee note that Base Transceiver Stations (BTSs) of
M o b i l e Co Co m m u n i c a t i o n N e t w o r k p r o d u c e E l e c t r o m a g n e t i c F i e l d s (E ( E M F) F) radiat ions.
Similarly Mobile Handsets also produce such radiations.
T h u s EM EM F r a d i a t i o n i n c o m m e r c i a l l a n d a n d m o b i l e s e r v ic ic e i n T e l e c o m Sector which may be classified into two categories i.e. radiation from B T S s a n d r a d i a t i o n f r o m M o b i l e H a n d s e t s . St St u d i e s i n s e v e r a l c o u n t r i e s u n d e r t h e W o r l d H e a l t h O r g a n i z a t i o n ( W H O ) p r o v e t h at t h e e m i s s i o n s f r o m t h e m o b i l e ph p h o n e t o w e r s /n /n e t w o r k s a r e c a u s i n g h a rm rm f u l e f f e c t s o n human
beings.
International
In
this
context,
Commission
on
the
Committee
Non-lonizing
find
Radiation
that
the
Protection
( I CN CN I RP RP ) h a s p u b l i s h e d g u i d e l i n e s w h i c h a r e e n d o r s e d b y t h e WH O f o r limiting
radiation
exposure
and
radia t ion guide lines of ICNIRP. ICNIRP.
the
DoT
has
been
ado pting
the
On 4 Novem ber, 2009 t he CMTS/ CMTS/UAS
licensees have been directed by the DoT to implement the radiation n o r m s a s p r e s c r i b e d b y t h e I C NI N I R P. P.
One peculi ar feat ure t hat has
come to the notice of the Committee is that the Operators in India t h e m s e l v e s c e r t i f y /t /t e s t t h e r a d i a t i o n l e v e l s a s p e r t h e D oT oT d i r e c t i v e s o f 9 November, 2009 and no monit oring mechanism
has been developed
by DoT to verify the authenticity of the self certifi cation of the Op e r a t o r s .
T h e C o m m i t t e e d e p r e c a t e s u c h a m i n d l e s s a r r a n ge ge m e n t
m a d e by b y t h e Do Do T t o c h e c k t h e r a d i at a t i o n l ev ev e l .
Notw ithst anding the
TRAI's opinion that till some method to regularly collect the EMF r a d i a t i o n s i g n a l i s d e v i s e d , s e l f -c -c e r t i f i c a t i o n s e e m s t o b e a n o p t i o n , t h e Committee reject the methodology adopted by the DoT and impress upon them to examine the feasibility of introducing a more effective a n d r e l i a bl bl e m e c h a n i s m . The Committee also recommend that an inter-Ministerial group comprising of the DoT, the Ministry of Health and Family Welfare and t h e M i n i s t r y o f E nv n v i r o n m e n t a n d Fo Fo r e s t s b e c o n s t i t u t e d t o m a k e a j o i n t study on the harmful radiation of the EMF on human beings and the flora and fauna and thereafter devise a suitable m onitoring mec hanism for keeping it within the permissible level as per the internat ional norms.
ROLE AN D RES RESPONSIBIL PONSIBIL IT Y OF TRAI
The Committee note that the recommendations of the Telecom R e g u l a t o r y A u t h o r i t y o f I n d i a ( T R A I ) a r e n o t b i n d i ng u p o n t h e C e n t r a l Go v e r n m e n t .
But
it it
is mandatory
for
the
Go v e r n m e n t
to
s ee ee k
recommendation of the TRAI in respect of matters pertaining to the need and timing for introduction of new service providers and terms a n d c o n d i t i o n s o f l i c e n c e t o a s er e r v i c e p r o v i de d e r . B u t t h e Co C o m m i t t e e a re re s u r p r i s ed e d t o n o t e t h a t w h i l e s e ek e k i n g T RA RA I ' s
recomm endation on 13
April, 2007 on various issues, the DoT did not seek recommendations o n g r a n t o f n e w l i c e n c e s d e s p i t e t h e m a n d a t o r y re re q u i r e m e n t .
Ev e n
though the decisions of the Government is final whether to accept or r e j e c t t h e T RA RA I ' s r e c o m m e n d a t i o n , n o t s e e k i n g s u c h r e c o m m e n d a t i o n s a t a l l sp s p e a k s v ol o l u m e s f o r t h e Do Do T s
m a l a f i d e de de s i g n s t o c i r c u m v e n t
t h e e s t a b l i s h e d p r o v i s io i o n s in i n t h e T RA RA I A c t .
Besides,
the
Committee
find
TRAI's
flip-flop
in
its
r e c o m m e n d a t i o n s al a l s o c o n t r i b u t e d t o w a r d s t h e D ep e p a r t m e n t ' s ar ar b i t r a r y and unilat eral decisi ons. that
as
the
existing
For exam ple, in 2003 TRAI recom mended
players
have
to
improve
the
efficiency
of
utilization of Spectrum and if Government ensures availabilit y of additional Spectrum, then within the existing licensing regime, they m a y i n t r o d u c e a d d i t i o n a l p l a y e r s t h r o u g h a m u l t i s t a g e b i d d i ng ng p r o c e s s as was followed in the case of introduction of the fourth cellular operator.
Qu i t e
contrary to
i t s r e c o m m e n d a t i o n s o f 2 0 0 3 , T RA RA I
r e c o m m e n d e d i n 20 2 0 0 7 t h a t i n f u t u r e a ll ll Sp e c t r u m e x c l u d i n g Sp e c t r u m
in
the
800,
900
and
1800
MHz
bands(2G
Spectrum)
s h ou l d
be
auctioned on the ostensible logic of maintaining a level playing field. The Authority, however, simultaneously recommended that on the issue of grant of
licences,
a m a r k e t m e c h a n i s m s h o u l d b e d e v i s ed ed .
This over turn and ambivalence in TRAI's recommendation provided the DoT much needed lee way in cherry-picking the recomm endation.
Authority's
T RA RA I ' s c l a r i f i c a t i o n b e f o r e t h e C o m m i t t e e t h a t i t
never recom mended the grant
o f U A S l i c e n c e i n 2 0 0 7 -0 -0 8 a t a p r i c e
d e t e r m i n e d i n 2 0 0 1 f a i l s t o i m p r e s s t h e C o m m i t t e e b e c a u s e T R A I al al s o did not say not t o give UAS lic ence/2G Spectrum at 2001 prices. The mere statement that the market dynamics should be tak en into c o n s i d e r a t i o n d o e s n o t i m p l y t h a t T RA RA I h a s r e s t r a i n e d Do Do T n o t t o g i v e U A S l i c e n c e i n 2 0 0 7 -0 -0 8 a t 2 0 0 1 p r i c e . recommend
that
TRAI
should
reflect
The Commit tee, t herefore, deeply
and
dispassio nately
mindful of the far reaching implications of their recommendation so that there is no scope for second interpretation or the so called cherry-picking.
S h r i N i p e n d r a M i s r a , f o r m e r C h a i r m a n , T R A I , w h i l e de p o s i n g b e f o r e t h e Co Co m m i t t e e w e n t e v e n t o t h e e x t e n t o f c o r r e c t i n g h i s e a r l i e r recomm endations
of 2007 for not
a u c t i o n i n g 2 G Sp e c t r u m .
He
emphasized that Spectrum in all bands should be auctioned and l i c e n c e s s h o u l d b e d el e l i n k e d f r om o m S pe p e c t r u m . T h e C o m m i t t e e vi vi e w s u c h a
belated
realization
seriously
as
he
failed
to
make
tangible
recommendation in this behalf in 2007 when he was the Chairman TRAI.
The
Committee
note
that
TRAI
can
make
suo-motu
recommendations on any matter as specified in Clause (a) of Subs e c t i o n (1 (1 ) o f S e c t i o n 1 1 o f t h e T RA R A I Ac Ac t .
B u t t h e Co Co m m i t t e e a r e
s u r p r i s ed e d t o n o t e t h a t w h e n t h e s o -c -c a l l e d F CF CF S b a si si s w a s a d o p t e d b y the DoT in the grant of UAS lices/2G spectrum, TRAI did not exercise it s
suo-motu
pow ers.
T h e A u t h o r i t y ' s e x p l a n a t i o n t h a t T RA RA I n e v e r
r e c o m m e n d e d F i r s t - C o m e - F i r s t - S e r v e d c r i t e r i a i s a g ai n a n i n d i c a t o r o f TRAI's ambiguous stance on important matters which the Committee v i e w w o r s e t h a n d e re r e l i c t i o n o f d ut u t y . T h e Co Co m m i t t e e a r e no no t i m p r e s s e d w i t h t h e a v e r m e n t o f T RA R A I t h a t t h e y d i d n o t r e c o m m e n d FC FC F S c r i t e r i a but having taken note of a particular procedure if found defectiv e, nothing
presented
methodology
for
TRAI
allocation
to
recommend
a
of
Spectrum
consonance
in
more
appropriate wi th
the
market dynamics which would have led to the price recovery of the s c a r e r e s o ur u r c e . T h e C o m m i t t e e c o n s i d er e r i t T RA R A I ' s m o r a l o b l i ga ga t i o n t o take such steps because its advocacy of no auction of 2G Spectrum l e d t o t h e a d o p t i o n o f t h e F CF CF S m e t h o d w h i c h s u b s e q u e nt nt l y r e s u l t e d i n t h e a l l ot o t m e n t o f Sp Sp e c t r u m a t a t h r ow ow a w a y p r i c e .
T h e T R A I ' s r e c o m m e n d a t i o n s o f ` N o C a p ' o n t h e n u m b er o f players in 2003 might have been appropriate when players were few, a v a i l a bi b i l i t y o f Sp Sp e c t r u m w a s n ot ot a c o n s t r a i n t , c o m p e t i t i o n w a s n o t c u t throat and teledensity was low. But recomm ending the same principle in 2007 was in the considered view of the Committee ill conceived in v i e w o f t h e s e a c h a n g e i n t h e T e l e c o m Se Se c t o r . T h e C o m m i t t e e c o u l d not find the basis on which TRAI recommended `No Cap' on the number of players in 2007 when there was a shortage of Spectrum
u n l i k e i n 2 0 0 3 -0 -0 4 .
M o r e o v er e r , h o w p r u d e n t i t i s t o r a t i o n l im im i t e d
Spectrum against unlimited players it is for TRAI to think and answer more
so
when
the
Authority
was
ignorant
of
the
a vailability
of
S p e c t r u m w h i l e r e c o m m e n d i n g `N o C a p " . T h e C o m m i t t e e no no t e t h a t t h e T RA RA I a d v o c a t e d i n M a y , 2 0 1 0
t h a t k e e p i n g i n vi vi e w t h e s c a r c i t y o f
Spectrum and the need to provide the contracted Spectrum to the existing licences, no more UAS licence linked with Spectrum should be awarded. It so appears that the DoT were presciently awaiting for this
recommendation
and
they
immediately
adopted
it
to
stop
a l l o c a t i o n o f U A S l i c e n c e t o t h e r e m a i n i n g a p pl p l i c a n t s o f 2 0 07 0 7 -0 -0 8 . I t i s another
classic
example
of
`cherry-picking'
of
the
TRAI's
r e c o m m e n d a t i o n a s w e l l a s t h e A u t h o r i t y ' s f l ip ip f l o p s i n g i v i n g c l e a r c u t r e c o m m e n d a t i o n a t a n a p p r o p ri ri a t e t i m e .
T h e Co Co m m i t t e e n o t e t h a t t h e c o n t r a c t u a l a m o u n t o f S p ec ec t r u m f o r the
first,
second
and
third
operators
for
CMTS
licen ces
was
a
cumulative maximum of upto 4.4 MHz+4.4MHz in the 900 MHz band b a s e d o n a p p r o pr pr i a t e j u s t i f i c a t i o n .
In 2001, this contrac tual amount
was increased to 6.2 MHz+6.2MHz with retrospective effect from 1st A u g u s t , 19 1 9 9 9 a n d s u b je je c t t o a v a i l a b i l i t y a n d j u s t i f i c a t i o n , b a s e d o n t h e T R A I 's ' s r e c o m m e n d a t i o n . I n 2 0 0 2 , i t w a s i n c r e a s e d t o 8 M H z +8 +8 M H z a n d f u r t h e r u p t o 1 0 M H z+ z+ 1 0 M Hz H z b a s ed ed o n a c e r t a i n s u b s c r i b e r b a s e w h i c h w a s a l s o r e v i s ed e d f ro r o m t i m e t o t i m e . I n t h i s c o n t e x t , A u d i t p o i nt nt e d o u t that several operators are holding additional Spectrum, much above their contractual agreements, in various Circles which if priced would give the Government an additional flow of revenue to the tune of R s .3 .3 6 , 9 9 3
cror e.
The
Commit t ee
find
that
in
May,
2010
TRAI
recommended operators
for
beyond
charging the
the
additional
licenc ed
quantity
c o n s i d e r a t i o n o f t h e Go Go v e r n m e n t .
Spectrum w hich
held is
by
the
under
the
T h e C o m m i t t e e a r e p e r p l ex ex e d t o
n o t e t h a t w h i l e t h e Do Do T o n t h e o n e h a n d i s n o t p r o c e s s i n g t h e p e n d i n g applications for licences due to non-availability of Spectrum, many e x i s t i n g o p e r a t o r s a r e h o l d i n g a dd d d i t i o n a l Sp S p e c t r u m w i t h o u t p a y i n g a ny ny u p f r o nt nt c h a r g e s .
N o w t h a t t h e T RA RA I h a s r e c o m m e n d e d c h a r g i n g a
p r i c e f o r t h e a d d i t i o n a l S p ec ec t r u m , w h i c h i s u n d e r c o n s i d e r a t i o n o f t h e DoT,
the
Committee
impress
upon
both
the
Authority
and
the
Department to take appropriate measures so that the ad ditional Spectrum is charged commensurately with the market price so that t h e e x c h e q u er e r g e t s t h e r e q ui u i s i t e r e v e n ue u e . T h e Co Co m m i t t e e a l so s o d e si si r e that TRAI's February, 2011 recommendations on Spectrum pricing be g i v e n d u e c o n s i d er e r a t i o n w h i l e c h a r g i n g f o r a d di d i t i o n a l S pe pe c t r u m .
The Committee also find that based on the studies made by the TRAI on NTP-99, international practices, various clauses in the UAS l i c e n c e s e t c . , t h e A u t h o r i t y r e c o m m e n d e d i n t r o d u c t i o n o f c r o s s o v e r or or Du a l T e c h n o l o g y l i c e n c e s .
A c c o r d i n g ly l y , t h e De De p a r t m e n t i s s u e d 3 5
Dual Technology licences in 2007-08 by charging the fees as was paid b y t h e G S M o p e r a t o r s i n t h e sa sa m e c i r c l e .
W i t h o u t g o i ng ng i n t o t h e
merits of the policy implemented in view of the TDSAT judgment in favour of Dual Technology licences, the Committee strongly feel that the price realized from these licences was grossly undervalued, as also pointed out in many quarters including by
t h e C & A G. G.
The
C o m m i t t e e , t h e r e f o r e , e x h o r t t h e Do Do T t o c a l c u l a t e t h e p o s s i b l e l o s s e s on this count and recover it from t he licensees.
One aspect that engages the attention of the Committee is the fact
that
worldwide,
especially
in
the
developed
cou ntries,
the
licensing and Spectrum related functions are actually performed by t h e Re Re g u l a t o r s a n d n o t b y t h e Go Go v e r n m e n t u n l ik ik e i n I n d i a .
The
C o m m i t t e e c o n s i d e r su s u c h a p r a c t i c e a s o n e o f t h e m a i n r e a so so n s f o r t h e Do T ' s a r b i t r a r y d e c i s i o n s i n d e a l i n g w i t h t h e c o n s u l t a t i o n p r o c e s s w i t h t h e A u t h o r i t y . T h e Co Co m m i t t e e , t h e r e f o r e , f e e l t h a t t h e T RA RA I A c t n e e d s t o b e r e v i s i t e d a n d a n i n t e r -M -M i n i s t e r i a l g r o u p b e c o n s t i t u t e d t o h a v e a c o m p r e h e ns n s i v e st s t u d y o n t h e f e a si s i b i l i t y o f a ss ss i g n i n g t h e l i c e n s i n g a n d s p e c t r u m r e l e a s e d f u n c t i o n t o t h e T RA R A I it it s e l f .
O n an an o t h e r i m p o r t a n t
issue, the Committee would like the Government to have a relook at the appropriateness and prudence of the appointment of Secretar ies of t he DoT as t he reasons.
Chairman
of
TRAI
for
retired obvious
AU CTION OF 3G AND BWA SPECTRUM SPECTRUM
The Committee note that the TRAI made its recommendation on a u c t i o n a n d a l l o t m e n t o f 3 G S p e c t r u m o n 2 7. 7 . 09 0 9 .2 .2 0 0 6 .
T h e Au Au t h o r i t y
r e c o m m e n d e d a r e s e r v e p r i c e o f R s .1 . 1 0 1 0 c r o r e f o r p a n I n d ia ia a l l o t m e n t o f 2 .5 .5 M H zx zx 2 . 5 M H z o f 3 G S p e c t r u m . T h e T e l e c o m C o m m i s s i o n d e s i r e d to
d o u b l e t h e r e s e r v e p r i c e t o Rs Rs .2 .2 0 2 0 c r o r e f o r p a n I n d i a o p e r a t i o n
o f 3G 3G s e r v i c e s . Telecom
I n v i e w o f t h e d i v er e r g e n t v i e w s o f t h e T RA RA I an an d
Commission,
Committee
on
Political
the
matter
Affairs
was
and
referred
the
Finance
to
the
Cabinet
Mi nistry
s u g g e st s t e d t o d o ub u b l e t h e r e se s e r v e pr p r i c e t o R s .4 .4 0 4 0 c r o r e .
which
The matt er
was finally referred to a Group of Ministers which decided to keep a pan India Spectr um.
r e s e r v e p r i c e o f Rs Rs . 3 5 0 0 c r o r e p e r o n e b l o c k o f 2 . 5 M H z o f T h e E GO GO M a l s o d e c i d e d t o k e e p a p a n I n d i a p r i c e o f
R s .1 .1 7 5 0 c r o r e f o r o ne n e b l o c k o f 2 0 M H z o f B WA WA s p e c t r u m . T h u s a u c t i o n o f 3 G Sp Sp e c t r u m s t a r t e d o n 9 t h A p r i l , 2 0 1 0 a n d c o m p l e t e d o n 1 9 t h A p r i l , 2 0 1 0 f e t c h i n g t h e Go v e r n m e n t
an amount
o f Rs . 6 7 7 1 8 .9 .9 5 c r o r e .
Similarly, auction of BWA spectrum started on 24th May, 2010 and c o m p l e t e d o n 11 1 1 t h J u n e , 2 0 1 0 . I n t h i s c a s e , t h e Go v e r n m e n t e a r n e d a
r e v e n u e t o t h e t u n e o f R s .3 .3 8 5 4 3 . 3 1 c r o r e .
Thus a tot al
amount of
Rs.1,06,262.26 crore was garnered from the auction of 3G and BWA S p e c t r u m , b e y o n d t h e i m a g i n a t i o n o f t h e De De p a r t m e n t .
Unlike the
p r o c e d u r e a d o p t e d f or o r a ll l l o t m e n t o f 2G 2 G S p e c t r u m , t h e Co C o m m i t t e e fi fi n d that the method adopted in the allotment of 3G and BWA Spectrum was
quite
fair
and
transparent,
especially
the
manner
in
which
d i f f e r e nc n c e s o f o p i ni n i o n a m o n g v a r i o u s e n t i t i e s w e r e r e s o l v e d. d. H o w e v e r , there was a slight controversy when BSNL and MTNL were given 3G S p e c t r u m i n a d v a n c e i n 2 0 0 8 . O f c o u r s e , t h e y p ai ai d t h e s a m e a m o u n t as the highest bidder in the price discovered during the auction. Although
the
TRAI
opined
that
level
playing
field
has
been
c o m p r o m i s e d b y a l l o c a t i n g a d v a n c e 3 G Sp Sp e c t r u m t o B SN SN L a n d M T N L , s o m e t e l e c o m e x p e r t s l i k e S hr h r i B .K . K . Sy S y n g a l h a s o pi pi n e d t h a t t h e r e i s n o harm in alloc ati ng 3G and
B WA W A S p e c t r u m t o B SN SN L a n d M T N L i n
advance because of t heir rural and social obligations. The
Committee
are
happy
to
note
that
the
auction
Sp e c t r u m t h r o u g h a n o p e n a n d t r a n s p a r e n t b i d d i n g p r o c e s s established the true value of the finite scare resource.
of
3G has
How ever, as
apprehension has been raised at many quarters that by paying such hefty amount to get 3G Spectrum, the successful bidders might pass
o n t h e b u r de de n t o t h e c o n s u m e r s , T RA RA I t o k e e p a w a t c h
t h e Co Co m m i t t e e i m p r e s s up up o n t h e
o n t h e d ev e v e l o p m e n t i n t h i s r eg eg a r d a n d p r o t e c t
t h e i n t e r e s t o f t h e c o n s u m e r i n t a n d e m w i t h t h e Do Do T .
The Committee would also like to urge upon the DoT to ensure effective roll out obligations of the operators after allotment of 3G Spectrum strictly in accordance with the licensing conditions and stringent penalty be imposed on the defaulting operators with a view t o e n s u r in i n g op o p t i m a l an a n d e f f i c i e n t u t i l i z a t i o n o f Sp Sp e c t r u m .
Kanwar Deep
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