Communications Minister A Raja argues that the Telecom Regulatory Authority of India’s (Trai) recommendations of August 28, 2007 and the government policy of allocating spectrum/new licences have been the basis of all the decisions made by him in the last year. As Trai chief Nripendra Misra has pointed out on several occasions, this is not true, and the minister has merely cherry-picked from his recommendations. Mr Misra did not talk of the first-come-first-served policy that Mr Raja implemented to allot spectrum to newcomers; equally, after announcing a date till when applications for fresh spectrum would be entertained, Mr Raja suddenly announced a cut-off date well before this, and then opened up a payment window for a few hours at very short notice; all of this enabled those who were in the know, or very lucky, to grab top positions in the queue. Similarly, the ministry disregarded the recommendations on charging dual-technology firms like Reliance Communications a higher usage fee, considering that they were getting more spectrum.
But if Mr Raja is to be blamed for distorting Mr Misra’s recommendations, Mr Misra too must take some blame for being vague on critical issues. On issuing GSM spectrum to CDMA-mobile firms like Reliance, Mr Misra said it could be done as long as the firm paid the same licence fee as a GSM firm. And while mobile firms were using spectrum in the 800/900/1,800 bands, Mr Misra recommended auctions in each band except these ones; in an earlier section of his report, he said that while an auction was one way to assess market prices for spectrum, an annual spectrum charge was also one way of capturing the spectrum’s economic value — in other words, Mr Misra was vague about the way to price spectrum. He elaborated on this in different parts of the report and spoke of how ‘the Authority in the context of 800, 900 and 1,800 MHz is conscious of the legacy, ie prevailing practice and the overriding consideration of level playing field ... It is in this background that the Authority is not recommending the standard options pricing of spectrum.’ On the issue of ‘inter se priority of allocation’ between those in the queue, Mr Misra said the department of telecom could decide. It was, similarly, Mr Misra’s jacking up of the number of subscribers required for extra spectrum by 3-5 times that allowed the ministry to not allot fresh spectrum to existing players and instead allot it to firms at bargain-basement prices.
After realising that his recommendations were not unequivocal, Mr Misra tried to retrieve the situation. Four days after the ministry issued Letters of Intent for 120 circles on January 10, 2008 by citing his recommendations, the Trai chief wrote to the telecom secretary clarifying his position. He said, for instance, that the existing government policy on new entrants was settled way back in 2003 itself and that policy was clear that new entrants could only come in through auctions (why Mr Misra never put this in his original recommendations is not clear since he discussed the merits of various pricing options). Since it was only LoIs and not licences that had been issued at this stage, the ministry could easily have cancelled them. So while it is clear that Mr Raja was picking out what was convenient, Mr Misra is to blame for not being clear in what he recommended.