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AG questions EGoM decision on spectrum fee

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The Attorney General for India (AG), , asked the empowered group of ministers () on telecom whether financial and public policy implications should find precedence over contractual obligations in an agreement.

The question was in response to the EGoM’s request for his opinion on the ministerial panel’s decision to impose one-time spectrum charges on prospectively from 4.4 Mhz. The EGoM had earlier rejected the AG’s suggestion to impose one time spectrum charges on incumbent operators -- beyond 6.2 MHz for GSM and beyond 5 MHz for players -- retrospectively from July 2008, when the government took the decision to impose such a fee. In his second opinion, the AG said that the key point is whether the contracted spectrum given to the operators was 4.4 MHz or 6.2 MHz for GSM, and 2.5 Mhz or 5 Mhz for CDMA operators. He noted that just because no allotment was made between 4.4 MHz and 6.2 MHz to some operators doesn’t mean that 4.4 MHz becomes the contracted spectrum.

He clarified that his opinion is based on the sanctity of the legal contract, and not the financial and public policy implications, about which the EGoM had raised serious concerns. Such concerns, the AG pointed out, can’t be the subject of his opinion.

The AG’s opinion will now be included in the Cabinet note, which details the decisions taken by the EGoM for it to take a final decision.

The AG said concerns were raised in the EGoM that operators who had not been given up to 6.2 Mhz would demand the additional spectrum without charge. There were as many as 64 licencees who are waiting for additional spectrum of 1.8 MHz beyond 4.4 MHz.

Thirty-three were also making similar demands which would have led to serious significant financial and policy implications. He said that he was not fully apprised of the status of these spectrum pending allocations.

The AG also questioned the legality of the opinion of the deputy chairman of Planning Commission , who had said: “There is a need to ensure a level-playing field to the extent feasible between new entrants and existing licencees, while according due respect to the sanctity of contract.” The AG said that this opinion could be termed as self-contradictory and it might not stand the test of legal scrutiny.

On the issue of charging for excess spectrum above 6.2 MHZ, the AG noted that the decision is to charge for excess spectrum prospectively from the date of government approval. He said there is a logic behind his earlier opinion that the charge should be from July 2008. He pointed out that the decision taken in 2008 was the basis of his opinion. The AG reiterated that if a decision was taken, the fact that it was not implemented for four years doesn’t make the implementation from that date retrospective.

The Cabinet, which is expected to meet this week, will now have to decide between the AG’s and EGOM’s opinions.

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