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A recent draft report by the Comptroller and Auditor General of India (CAG) has suggested cancelling nationwide broadband spectrum allocated to Infotel Broadband Services, now a Reliance Industries company, for allegedly rigging the auction and violating rules.
The same draft report has said the recommendations of the Telecom regulatory Authority of India (Trai), on the auction of Broadband Wireless Access (BWA) spectrum lacked clarity and consistency. This, the report said, has resulted in undue advantages to certain firms.
The eligibility criterion set for the BWA auction was not well thought and the regulator did not prescribe any stringent eligibility criterion, in terms of high net-worth and significant paid-up capital for internet services providers (ISP) for participation in the auction, particularly when the licence fee of an ISP was Rs 1 only, according to the draft report. While Trai had suggested a high reserve price of Rs 142 crore for pan-India BWA spectrum, the regulator did not ensure that only those players which were capable to pay such high fees for spectrum will be able to participate in the auction, added the draft report.
The regulator also stayed silent when the blocks of BWA spectrum for auction was drastically reduced to two slots from 13 but eligibility criterion was not changed, it added.
The draft report also noted that the Department of Telecommunications (DoT) had failed to process the Trai recommendations properly. While auctions for 3G spectrum and BWA spectrum were conducted at the same time, eligibility criterion was inconsistent.
