Date:13/11/2008 URL: http://www.thehindu.com/2008/11/13/stories/2008111361091300.htm

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Spectrum allocation arbitrary: PIL

J. Venkatesan

High Court issues notice to Centre, hearing on December 10

Licences granted without transparent guidelines
Exchequer suffered losses of Rs. 50,000 crore

New Delhi: The Delhi High Court on Wednesday issued notice to the Centre on a public interest litigation petition alleging an estimated loss of Rs. 50,000 crore in the allocation of spectrum on a first come, first served (FCFS) basis.

A Bench consisting of Chief Justice A.P. Shah and Justice S. Murlidhar sought the Centre’s response in three weeks and posted the matter for further hearing on December 10.

Petitioner Arvind Gupta alleged that the policy of FCFS allotment was arbitrary, irrational, non-transparent, bad in law and unconstitutional. The practice followed by the government was under a cloud as the respondents had acted with undue haste in granting licences.

Dr. Gupta said the licences were granted without any transparent guidelines and without disclosing the terms and conditions, and eligibility criteria for the prospective telecom spectrum licence seekers.

He made it clear that he was not questioning the policy of selling licences but was only questioning the lack of procedure.

Murky process

The petition said: “The process of allotment of the spectrum is getting murkier which raises doubts and suspicions in the minds of the general public about the bona fides, fairness and rationality of the conduct of the respondents. The irrational acts of omission and commission in allotting spectrum on the FCFS basis to private players have caused the public exchequer whopping losses of about Rs.50,000 crore by trading in licences.”

In the name of providing a level-playing field, the government overlooked the revenue concern of the exchequer and allotted the spectrum to private applicants without effecting any upward price revision to either capitalise on the inflationary price impact or get the premium from the globally mature telecom market.

As a result, the petition said, private companies cornered the available spectrum and created an artificial scarcity.

Further, they were trading in the booming telecom sector and making windfall gains by selling ownership. Hence the present petition to quash the notification to grant licences on FCFS basis.