Supreme Court Rejects Centre’s Plea for Administrative Spectrum Allocation

Context:

The Supreme Court of India has made a significant decision by rejecting the Centre’s plea to permit administrative allocation of spectrum. This decision reaffirms the principle of open and transparent auction for allocating this scarce natural resource.

Relevance:

GS II: Polity and Governance

Dimensions of the Article:

1. Reasons for Supreme Court’s Rejection of Centre’s Application
2. What is Airwaves/Spectrum?
3. Centre’s Plea: Arguments in Favor of Allocating Spectrum Through Administrative Processes
4. The Telecommunications Act, 2023

Reasons for Supreme Court’s Rejection of Centre’s Application

Misconceived Application

• The Registrar deemed the application for clarification as misconceived, citing Order XV Rule 5 of the Supreme Court Rules, 2013, which allows refusal to accept a petition lacking reasonable cause, containing frivolous content, or scandalous matter.

Precedent from 2G Spectrum Case

• The Supreme Court emphasized that spectrum allocation to private players must adhere to open and transparent auction processes, as established by the landmark judgment in the 2G spectrum case, commonly known as the “2G spectrum scam” case, which occurred 12 years ago.

Importance of Fairness and Transparency

• Spectrum allocation is a critical procedure, and allowing “administrative allocation” would have granted the government exclusive authority to select operators for distributing airwaves. This move was deemed contradictory to principles of fairness and transparency, as highlighted by the Supreme Court.

What is Airwaves/Spectrum?

• Airwaves, also known as spectrum, are radio frequencies within the electromagnetic spectrum used for wireless communication services.
• The government manages and allocates airwaves to companies or sectors for their use.
• Spectrum is auctioned by the government to telecom operators for providing communication services to consumers.

2G Spectrum Scam Verdict

• In 2008, the government sold 122 2G licences on a first-come-first-serve (FCFS) basis to specific telecom operators.
• Allegations arose regarding a ₹30,984 crore loss to the exchequer due to discrepancies in the allocation process.
• Petitions were filed in the Supreme Court alleging a ₹70,000 crore scam in the grant of telecom licenses in 2008.
• In February 2012, the Supreme Court cancelled the licenses, advocating for competitive auctions as the only route to allocate spectrum.

Centre’s Plea: Arguments in Favor of Allocating Spectrum Through Administrative Processes

Assignment for Various Purposes:

• Spectrum assignment is required not only for commercial telecom services but also for sovereign and public interest functions such as security, safety, and disaster preparedness.
• Certain spectrum categories have unique uses where auctions may not be the best choice, such as for captive, backhaul, or sporadic use.

Situation of Lower Demand Than Supply:

• Administrative allocation is necessary when demand is lower than supply or for space communication, where sharing spectrum among multiple players is more efficient.
• Since the 2012 decision, non-commercial spectrum allocation has been temporary, and the government seeks to establish a solid framework for assigning spectrum, including methods other than auctions.

2012 Presidential Reference:

• Referring to a previous Constitution Bench’s remarks on a Presidential reference about the 2012 verdict, the government highlights that the auction method is not a constitutional mandate for the alienation of natural resources excluding spectrum.
• However, spectrum, as per the law declared in the 2G case, is to be alienated only by auction and no other method.

The Telecommunications Act, 2023

• Empowers Government to Use Administrative Route:
• The Telecommunications Act, 2023, passed by the Parliament, grants the government authority to assign spectrum for telecommunication through administrative processes other than auctions.
• This provision applies to entities listed in the First Schedule, which includes those engaged in national security, defence, and law enforcement, as well as Global Mobile Personal Communication by Satellites (GMPCS) providers like Space X and Bharti Airtel-backed OneWeb.

Assignment of Part of Assigned Spectrum:

• Additionally, the government has the discretion to assign part of a spectrum that has already been allocated to one or more additional entities, referred to as secondary assignees.
• Furthermore, the Act empowers the government to terminate assignments where a spectrum or a part of it has remained underutilized for insufficient reasons.

-Source: The Hindu