The department of telecommunications (DoT) seems to be using a legal shield to strike down meaningful recommendations made by both the Telecom Regulatory Authority of India (Trai) and its own internal committees. DoT?s latest move, rejecting Trai?s proposal of imposing minimum rollout obligations on new telecom licencees before they are allowed to cash out, is hard to understand. At a time when 575 applications are pending before DoT for fresh licences, the emphasis should be on disincentivising non-serious applicants, especially those who see these licences as casino chips (to cash in), leaving the field to those who intend to offer telecom services and add value to the market. But DoT, in all its wisdom, thinks not. It has rejected the proposal on the grounds that there should not be any mid-course revision of procedures. At first brush, this sounds reasonable, particularly since one major charge levelled against this sector?s governance framework is that the goalposts are shifted around the field almost all the time, driven by expediency (or, often, special interests disguised as such). Indeed, it is a shame that the policy framework in the telecom sector has been altered far too many times over the last 12 years or so. Yet, to freeze the policy at this juncture is a little too convenient for comfort. It amounts to insisting that the current set of imperfections is somehow superior to all others, and no further corrective action is required.
The application glut problem is a genuine one, and it should be addressed in earnest through a process of wide consultations, if not by accepting Trai?s formulation of rollout obligations. Since communications minister A Raja has now decided that new licences would be allocated on the basis of the existing first-come-first-served policy, the least he could have done is put in place adequate filters to ensure that there are no secondary market gains to be made from spectrum trading. If there is a premium on this scarce public resource, it should accrue to the government?s coffers, not to private players who manage to grab some of it. In any case, DoT?s stance could do with more consistency. For the auction of 3G spectrum, it wants to bar winners from any M&A activity for five years to prevent bandwidth trading. In the case of 2G spectrum, however, it seems to have no problem with that.
