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Telecom: Presidential reference - a new twist in the '2G spectrum allocation'
tale?
` Union Cabinet has approved a presidential reference on 2G spectrum
allocation, per press reports
` Government's actions post SC judgment only increase the policy
uncertainty




Telecom
India
Presidential reference – a new twist in the ‘2G spectrum allocation’ tale? As per
press reports, the Union Cabinet has approved a presidential reference which would
seek the Supreme Court’s view on key questions regarding 2G spectrum allocation.
The reference would seek SC’s view on the legality of licenses and spectrum granted
under the FCFS policy (essentially without an auction) since 1994. We note that this
would be the third step taken by the Government in response to the SC’s Feb 2
judgment – a review petition and an interlocutory application being the other two.
Policy environment remains hazy and uncertain.


Union Cabinet has approved a presidential reference on 2G spectrum allocation, per press reports
Press reports suggest that the Union Cabinet has approved a presidential reference which would
seek the Supreme Court’s view on key questions regarding 2G spectrum allocation. The
presidential reference will ask seven key questions, as per press reports –
` Should the February 2 judgment affect telecom licenses given in 1994 – that is, retrospectively?
` What happens to those issued dual technology licenses (RCOM/TTSL)?
` What happens to the 3G spectrum given to those whose licenses were cancelled?
` Should all spectrum allocations of the past be reworked?
` Should telecom companies be charged more for spectrum allocated in the past, and from what
date?
` Whether the courts can interfere in policy decisions?
` Whether auctions are the best method to hand out natural resources?
Government’s actions post SC judgment only increase the policy uncertainty
We had highlighted two possibilities post the Feb 2 SC judgment
` Government using the judgment and the SC-mandated spectrum auction to accelerate decision
making and improve policy certainty.
` The judgment opening a Pandora’s box. From our note post SC’s Feb 2 judgment ‘Can this
judgment open a Pandora’s box and could we see more petitions being filed? Defending one of
the respondents, one of the counsels argued that ‘if the Court finds that the exercise
undertaken for grant of UAS licenses has resulted in violation of the institutional integrity, then
all the licenses granted 2001 onwards should be cancelled’. The court has rejected this
argument on the basis that those who received licenses between 2001 (after the 4th license
auction) and 24.9.2007 were not parties to the petitions and legality of the licenses granted to
them has not been questioned by the court. We do not rule out the possibility of petitions
being filed challenging (1) the legality of these licenses and/or (2) prices at which spectrum was
granted since 2001.’
Questions in the presidential reference, as per press reports, suggest that a larger-than-expected
Pandora’s box is likely being opened with questions asked on even pre-2001 license grants.