Why in news?

The Union government has moved an application for a certain class of spectrum to be allocated through administrative processes instead of competitive auctions. This development comes after the Supreme Court in 2012 had canceled 122 telecom licenses due to the 2G spectrum scam. Spectrum considered to be a scarce natural resource was ordered by the top Court to be allocated through the fair and impartial process of auction.

An administrative allocation would mean that the government will have the final say in deciding the procedure for selecting operators.

What’s in today’s article?

• Airwaves/Spectrum
• 2G spectrum scam verdict
• Centre’s plea
• 2012 Presidential reference
• The Telecommunications Act, 2023

Airwaves/Spectrum

• Airwaves are radio frequencies within the electromagnetic spectrum that can carry information wirelessly for a range of services including telecommunications.
• The government manages and allocates airwaves to companies or sectors for their use.
• The government auctions a fixed amount of spectrum within specified band/s to be utilised by operators for providing communication services to consumers.

2G spectrum scam verdict

• Case originated in 2008
  • The alleged 2G spectrum allocation scam is said to have originated in 2008 when the then government sold 122 2G licences on a first-come-first-serve (FCFS) basis to specific telecom operators.
  • In its charge sheet filed in April 2011, the CBI alleged that there was a loss of ₹ 30,984 crore to the exchequer as a result of discrepancies in the allocation process.
• Matter reaches SC
  • Petitions were filed in the top Court alleging a ₹70,000 crore scam in the grant of telecom licenses in 2008.
  • In February 2012, a division Bench of the SC cancelled the licenses while cautioning that an FCFS basis for the allocation of scarce natural resources can be prone to misuse.
• Competitive auctions for allocating natural resources
  • In its judgement, the apex court advocated for competitive auctions as the only route to allocate spectrum.
  • It further emphasised that the burden lies on the state to ensure that the non-discriminatory method of auction is adopted by giving wide publicity so that all eligible persons can participate in the process.

Centre’s plea: arguments in favour of allocating spectrum through administrative processes

• Assignment of spectrum is required for various purposes
  • The Centre has pointed out that the assignment of spectrum is required not only for commercial telecom services but also to discharge sovereign and public interest functions such as security, safety, and disaster preparedness.
  • Some spectrum categories have unique uses due to their characteristics or international norms. In these cases, auctions may not be the best choice.
    • E.g., for captive, backhaul, or sporadic use.
• Situation where demand is lower than supply
• The Centre further elaborated that administrative allocation is required when demand is lower than supply or for space communication.
• In such cases, it would be more optimal and efficient for spectrum to be shared by multiple players, rather than being broken up into smaller blocks for the sole purpose of exclusive assignment.
• The court was told that since its 2012 decision, non-commercial spectrum allocation has been temporary.
• The government now wants to establish a solid framework for assigning spectrum, including methods other than auctions, for the greater good.
• 2012 Presidential reference
  • The government refers to a previous Constitution Bench's remarks on a Presidential reference about the 2012 verdict.
  • The Bench pointed out that the auction method prescribed in the verdict was not to be considered a constitutional mandate for the alienation of natural resources excluding spectrum.
  • However, spectrum, which according to the law declared in the 2G case, is to be alienated only by auction and no other method.

The Telecommunications Act, 2023

• Empowers govt to use administrative route
  • The law passed by the Parliament empowers the government to assign spectrum for telecommunication through administrative processes other than auction for entities listed in the First Schedule.
  • These include entities engaged in national security, defence, and law enforcement as well as Global Mobile Personal Communication by Satellites such as Space X, and Bharti Airtel-backed OneWeb.
• Government can also assign part of a spectrum that has already been assigned
  • The government can also assign part of a spectrum that has already been assigned to one or more additional entities, known as secondary assignees.
  • It can even terminate assignments where a spectrum or a part of it has remained underutilised for insufficient reasons.