Retrofit

On February 3, a day after the landmark Supreme Court ruling, Department of Telecom dashed off a missive to the telecom regulator TRAI asking it to give its recommendations on the auction of the spectrum that would be surrendered by the operators within 60 days. Moreover, by June 2, the operators holding the invalidated licenses need to physically hand over the spectrum held by them. It is unlikely that the government will file a review petition against the judgment relating to 123 cancelled licenses. Equally, the Government is faced with a huge embarrassment and the legacy of cancelled licenses will haunt UPA-II forever. However, there is every possibility of the Government seeking more time to roll out a fair and transparent auction. Remember that the successfully conducted 2010 3G auction took 688 days.

There are multiple issues and ramifications which the judgment has thrown into stark relief:

*Why did the Government not defend the illegality of A Raja’s action on January 10, 2008? Smartly, it may have sensed the court’s mood. The entire lot of seven steps laid out by the Supreme Court in Section 70 (i)-(vii) relating to A Raja’s unconstitutional actions which led to the cancellation remained unchallenged during the hearing. The Government has restricted itself to merely describing the history of telecom reforms, spectacular growth in telecom services, increase in tele density, and merely the fact that giving away licenses in 2008 at 2001 determined prices cannot be called unconstitutional. In fact, it was argued, and the court notes in paragraph 49 “that the policy decision taken by the DoT for migration of CDMA service providers by NDA Government in 2003 was “neither illegal nor unconstitutional”. But that is where it ended on merits. No arguments were offered for A Raja’s actions between 2007 and 2008. The Government, however, argued, and the court notes that “the power of judicial review should be exercised with great care and circumspection and the court should not ordinarily interfere with the policy decisions of the Government in financial matters”.

* The judges agreed with this contention of the Government but gave detailed reasons including “when it is clearly demonstrated before the court that policy framed by the state or its agencies/instrumentality and/or its implementation is contrary to public interest is violative of the constitutional principles, it is the duty of the court to exercise its jurisdiction in larger public interest and reject the stock plea of the state that the scope of judicial reviews should not be exceeded beyond the recognized parameters”.

* Even famed lawyers arguing for the various companies restricted arguments to issues such as “TRAI did not recommendation auctions” or that “UPA only continued the policy from before” and therefore these licenses should not be subject to questioning. Some cited the Prime Minister’s speech at FICCI’s India Telecom Summit and others hung on to national interest, foreign investment and benefit to the people at large. They even argued equities by demonstrating investments, cheaper tariffs, and unfair treatment per se against A Raja since their clients had been “pushed down” in priority due to the distortions in the first-come-first-served. In effect absolutely no defence was offered on the issue in front of the court which related to the multiple illegal acts of A Raja, loss to the exchequer, violation of Article 14 of the Constitution, illegal advancement of cut-off date, last minute manipulation of first-come-first-served coupled with insider information to benefit particular companies or violation of procedure such as avoiding a meeting of the full Telecom Commission or simply following the TRAI Act when deviating from Recommendations of the TRAI.

*TRAI put out a detailed affidavit and argued when put in a corner that DoT should have only made a decision on spectrum allocation after determining the full availability of spectrum. TRAI also argued and demonstrated that DoT violated the TRAI Act by not seeking its mandatory recommendations before introducing new service providers under section 11 (1) (a) second and fourth proviso. In fact, TRAI admitted that it had initiated action against several new entrants for cancellation of licenses since they failed to meet roll-out obligations. None of these helped either the Government’s case or that of private operators. Finally Government made several statements which the court was quick to seize upon. These included Kapil Sibal’s press release of 29-1-2011, which the court had quoted in great detail in paragraph 57. The statement already admits that spectrum will not be bundled with licenses in the future, that there will be no concept of contracted spectrum and spectrum will only be made available through a market driven process in the future. That even spectrum beyond 1.4 MHz will be given to licenses that are found valid but at prices determined under the new policy. It said “we need to seriously consider adoption of an auction process for allocating and pricing of spectrum beyond 6.2 MHz” while ensuring that there is adequate competition in the auction process.

*With the Government itself conceding that auction was the way going forward then any defence against the process of auction whether level playing field or its adverse impact on prices, had no chance of surviving since those would have had to come from the Government itself. No wonder then Supreme Court trashed the TRAI for its Recommendations, calling them “lopsided and contrary to the decisions made by the Council of Ministers, as well as one that overlooked the main objectives of National Telecom Policy 1999 regarding a transparent process for allocating spectrum”.

*The court’s observations on the issue of first-come-first-served, which it describes as open to “misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values” resonates strongly on the political landscape of this country. What the court did by cancelling licenses is truly take the fight against against corruption to its logical culmination.

*Additionally the Government has survived by the skin of its teeth on the issue of collective responsibility.

In conclusion, given the fact that the Supreme Court has in one shot done DoT’s unfinished work of pursing licence cancellations and left the PM and FM out of its ambit, it is a responsible judiciary which has acted as the instrumentality against rampant graft which thrived courtesy a confluence of politician-bureaucracy-big business nexus. As it is famously said “Be careful what you ask for. You may actually get it!” The judiciary has given the people of India a famous victory. One which tears down the edifice of corruption.

-MAIL TODAY, 14TH FEB'12