DoT told to refer issue of spectrum usage fee to Trai

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Published: June 23, 2016 6:28:14 AM

The Union Cabinet on Wednesday asked the Department of Telecommunications (DoT) to refer the issue of spectrum usage charges to the Telecom Regulatory Authority of India (Trai) and accordingly fix the rates. The spectrum auctions are to be held later this year.

The Telecom Commission earlier this month sided with Attorney General Mukul Rohatgi’s opinion on clubbing spectrum sold for broadband wireless access services in 2010, to avoid arbitrage in imposing spectrum usage charges in future.(Reuters)The Telecom Commission earlier this month sided with Attorney General Mukul Rohatgi’s opinion on clubbing spectrum sold for broadband wireless access services in 2010, to avoid arbitrage in imposing spectrum usage charges in future.(Reuters)

The Union Cabinet on Wednesday asked the Department of Telecommunications (DoT) to refer the issue of spectrum usage charges to the Telecom Regulatory Authority of India (Trai) and accordingly fix the rates. The spectrum auctions are to be held later this year.

The DoT has been asked to give all the files and details to TRAI, “so that we can fix the spectrum usage charge accordingly,” finance minister Arun Jaitley said after the Cabinet briefing.

He added that the Cabinet in its meeting had approved all the other proposals relating to the reserve prices, quantum of spectrum to be auctioned and the timing of the auctions. While the DoT had earlier decided to impose a 3% uniform SUC for the spectrum being sold in future auctions, it had suggested a weighted average formula be applied for spectrum sold in previous auctions combined with the quantum of spectrum given through administrative process.

Reacting to the development, a top official said the DoT will refer the SUC issue to Trai and decide on the charges before going ahead with the auctions. “We want to come out with a comprehensive NIA for the auctions,” a top official told FE.

NIA, or notice inviting applications, is a document that gives details on the auctions, including the spectrum bands, prices, locations and related charges, including spectrum usage charge.

The DoT plans to issue the NIA only after deciding on the SUC to provide clarity for bidders interested in participating in the auctions, the official said.

As per the Cabinet note, the department had earlier planned to issue the NIA on July 1, and hold the auctions by September. The official said the department will wait for the suggestions from the sectoral regulator, even if it means to defer the auctions dates by few weeks.

The Telecom Commission earlier this month sided with Attorney General Mukul Rohatgi’s opinion on clubbing spectrum sold for broadband wireless access services in 2010, to avoid arbitrage in imposing spectrum usage charges in future.

The AG has said the DoT cannot increase the SUC of 1% of AGR on 2300 Mhz bandwidth, sold in the 2010 auctions, but can club it with other spectrum bands to arrive at a weighted average formula. Telecom operators represented by the Cellular Operators Association of India (COAI) had sought a uniform rate of SUC to avoid any arbitrage. Reliance Jio, a member of COAI, was not party to the suggestion.

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