With Communication Minister A Raja saying he has followed Trai recommendations while granting new licences in 2008 (at prices discovered through an auction as far back as 2001), Trai Chairman Nripendra Misra has been criticised for his recommendations being faulty or, at best, vague. He defends his actions in an interview to Sunil Jain. Excerpts:
Did the government follow your recommendations on new licences?
Yes and no. It didn't agree with what we suggested in several areas. We said that revenue share should be on aggregate spectrum (a CDMA firm like Reliance or Tata being allowed to 'crossover’ and also get GSM spectrum will have more spectrum than a pure-GSM firm), but this was not accepted. There are other instances as well — in this set of recommendations as well as in the ones on 3G, on infrastructure providers, on number portability.
Did the government cherry-pick? Lower spectrum charge helps Tata/ Reliance since they can serve more customers with more spectrum and still not pay for it.
I would not like to use that term. But we repeatedly said please take the totality of what we have said, not just individual portions. Charging a higher spectrum fee went hand-in-hand with allowing firms to get crossover spectrum.
But you did not specifically say new licences had to be auctioned. The Summary of Recommendations do not talk of auctions in the frequency bands currently in use; you just say the entry fee should be the same as for existing players; Section 2.73, which is not a recommendation, talks of how the 2001 entry fee is not realistic today but you then say ‘perhaps’ an auction can be done for entry fee; you even talk of how spectrum charges capture the economic value of spectrum and even talk about level playing fields.
We were not specifically asked for a reference on pricing for bringing in new entrants. But the 2003 Trai recommendations which were accepted are clear: new entrants are to be brought in through multi-stage bidding. Where is the confusion? In 2.73, we have said the 2001 entry fee is not valid; we have not said spectrum user charge is a substitute for entry fee. All the issues of level playing field and spectrum charge apply only to additional spectrum; but this is given only after the licence is granted. As for granting new licences and the entry fee for them, the October 2003 policy applies.
Under the Trai Act, you can make suo motu recommendations. Why didn’t you clearly say new entrants have to be brought in only through auctions even if the government did not ask you?
I did not need to exercise this right because it was obvious the existing policy was one of auctioning for new entrants.
But writing it clearly would have clarified matters.
That way I should write everything … the existing laws which everyone in the sector already knows. In retrospect, you can say rewrite the whole thing!
But you knew there wasn’t enough spectrum for everyone, why did you say there should be no cap on new entrants?
All that no cap means is that the government is free to auction spectrum for a 5th player, a 6th player, and so on.
But when you saw the new licences were not being auctioned, why didn’t you protest? After all, it is against the accepted policy.
That is the decision of the government.
Doesn’t the government have to get back to the Trai when it doesn’t accept its recommendations?
All that coming back to the Trai means is that I get 15 days to respond, after which the government is free to not accept anything I say. So beyond a point, there is no point in just writing letters. In one other case, we’d been writing to the government and we were told that a decision had been taken and there was no further scope for correspondence. This is perfectly okay. I don’t object to it, the government has the right to take decisions. The government decided that it didn’t want to go in for auctions — it is its decision .
Bringing in so many new players without spectrum for all creates a problem and it is your mandate to ensure there’s enough spectrum for everyone.
Spectrum management is not my mandate. It is for the government to decide on the number of new players. The position is clear: the government brings in new players subject to its understanding of the availability of spectrum.
Wasn’t putting a September 25 deadline for processing applications for new licences a sort of a cap, and against your recommendations?
Not at all, it was just an administrative decision on how to process the applications.
Did you recommend a first-come-first-served approach to giving out new licences since that is what the ministry finally did?
First-come-first-served is just an administrative way of processing demand for spectrum among those in the queue … it applies to those firms that are already licencees. There can be no policy recommendation on this. But it does not apply to giving out of new licences.
But your recommendation on inter se priority is what allowed the government to give Reliance a licence before the others.
That is not true. The inter se priority applies to those who are already licencees and are queued up for spectrum. It applies only after a firm has already got a licence. In fact, the government affidavit in the TDSAT clearly says pending applicants have first priority over spectrum allocation; after that, it is the turn of those who got licences without spectrum; then the crossover firms get spectrum, and then the new licencees get spectrum.
So how did the government give Reliance a crossover GSM licence ahead of others in the queue then?
That is a decision the government took. I am not going to discuss that.
You hiking the subscriber linkage is what freed up spectrum to give to new licencees. But you didn’t even ask industry for its comments on the subscriber-linkage criterion — this is mandatory before giving any recommendation.
We did not ask for consultation on it because we said the DoT should have a committee on it. Our recommendation on this was ad hoc in nature.
