2G Spectrum scam is huge; to the tune of thousands of crores cheated from public money. The specifics are still sub-judice; however, I am linking to the the “leaked report” which has been extensively reported in recent times by the lay press.

The entire article can be viewed here; although I don’t wish to skip over the juiciest parts (and something that I have always mentioned in this blog that is patently wrong with the auctions and the way it has been handled).

On First Come First Served Basis:

The Committee note that the First-Come-First-Served (FCFS) basis for the issue of Licences and Allocation of Spectrum has been followed by the Department on the argument that the announced UASL guidelines have made it open for new licences to be issued on continuous basis. The Committee’s scrutiny of the records reveal that in the Basic Service Licences guidelines, there is a reference to FCFS but nowhere in the UASL guidelines, the term FCFS has found a mention implying thereby it has no sanctity. In fact, on 24th November, 2003, the then Minister of Communications and IT had approved the Department’s proposal to give licence Spectrum on FCFS basis, but it was not codified in the UASL guidelines. Thus, there has been no such legally established principle as ‘FCFS’, at best it can be termed as a prescription to be followed for grant of licence/Spectrum…….

On Role of Media:

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…..

Presumptive Loss:

….Intriguingly, neither the DoT nor the TRAI has quantified the precise loss. Unfortunately, the DoT instead of admitting an unconscionable act, advanced the plea that theoretical exercises based on economic modeling are fraught with simplistic assumptions and that no methodology can be suggested by them to calculate the loss…..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 design.

Shortcomings in the Implementation aspect:

….While the first phase was implemented, the second phase was conveniently and intentionally, as subsequent events substantiate, overlooked. In the process, devising an efficient allocation formula for Spectrum alongwith an appropriate price remained unachieved as delinking the price of Spectrum from the issue of licences was given a go bye, disregarding the Cabinet decision. The Committee are deeply distressed that due to violation of the Cabinet decision and as a consequence of such deliberate omission, the issue of UAS license and allocation of Spectrum in 2007-08 at the price discovered in 2001 caused a staggering, but wholly avoidable, revenue loss…..

The Committee also desire that the price of Spectrum be delinked from the issue of licences without further delay and seek explanations as to why this important decision has not been implemented as yet…..

Role and Responsibility of TRAI:

The Committee note that the recommendations of the Telecom Regulatory Authority of India (TRAI) are not binding upon the Central Government. But it is mandatory for the Government to seek recommendation of the TRAI in respect of matters pertaining to the need and timing for introduction of new service providers and terms and conditions of licence to a service provider. But the Committee are surprised to note that while seeking TRAI’s recommendation on 13 April, 2007 on various issues, the DoT did not seek recommendations on grant of new licences despite the mandatory requirement. Even though the decisions of the Government is final whether to accept or reject the TRAI’s recommendation, not seeking such recommendations at all speaks volumes for the DoTs malafide designs to circumvent the established provisions in the TRAI Act..

So now we know that TRAI basically is a useless toothless regulator.

But TRAI is not above all. So read the following:

Besides, the Committee find TRAI’s flip-flop in its recommendations also contributed towards the Department’s arbitrary and unilateral decisions. For example, in 2003 TRAI recommended that as the existing players have to improve the efficiency of utilization of Spectrum and if Government ensures availability of additional Spectrum, then within the existing licensing regime, they may introduce additional players through a multistage bidding process as was followed in the case of introduction of the fourth cellular operator.

The bad news:

One aspect that engages the attention of the Committee is the fact that worldwide, especially in the developed countries, the licensing and Spectrum related functions are actually performed by the Regulators and not by the Government unlike in India. The Committee consider such a practice as one of the main reasons for the DoT’s arbitrary decisions in dealing with the consultation process with the Authority.

The big players have engaged the Department of Telecom and the TRAI executives get exemplary post retirement benefits as fancy board members. Of course, they are there to liaise with the existing bureaucrats setting up huge questions on conflict of interests. I really don’t know whether these clauses are in built in their “rules” but if you look at the RTI applications to make their assets public, these faceless bastards need to be more accountable. Not all of them are like that but the blackest of the black sheep are bringing a huge shame to rest of the community.

Pathetic. Ours is totally a banana republic.

On 3G Spectrum (Which I personally feel has been “over-inflated”):

The Committee are happy to note that the auction of 3G Spectrum through an open and transparent bidding process has established the true value of the finite scare resource. However, as apprehension has been raised at many quarters that by paying such hefty amount to get 3G Spectrum, the successful bidders might pass on the burden to the consumers, the Committee impress upon the TRAI to keep a watch on the development in this regard and protect the interest of the consumer in tandem with the DoT.

Hope you are feeling bad enough by reading this sorry state of affairs.

Related articles

• ‘Raja manipulated Telecom Commission’ (hindu.com)
• National Spectrum Act proposed (hindu.com)
• 2G Spectrum .CAG Report. (ramanan50.wordpress.com)
• 2G-Criminal Conspiracy Charge against Essar,Reliance Communications? (ramanan50.wordpress.com)
• PAC draft report puts 2G loss at Rs.1.90 lakh crore (hindu.com)
• Charge sheet identical to CAG findings (hindu.com)
• Arun Shourie to appear before CBI on February 21 (hindu.com)
• US Highlights 2G Scam is Unhealthy For Indian Telecom Market (telecomjunction.wordpress.com)