Law Min allows DoT to invite bids for 3G

The Law Ministry is learnt to have allowed the Department of Telecom's (DoT) to invite bids for the auction of 3G spectrum, but without the crucial clause on refunding the bid amount if the radio frequency allocation does not happen by September 1.

Earlier the Finance Ministry had asked the DoT to drop a clause in the Notice Inviting Applications (NIA), which mandated the government to refund the bid amount in case the auctioned spectrum was not allocated by September 1, 2010.

"Since the views of the Ministry of Finance and of our Department are in agreement with regards to the auction of spectrum, that it may take place where it can be allotted for commercial use on September 1, we concur with the draft NIA subject to deletion of the specific clause on refund," said an internal note of the Law Ministry.

The DoT had proposed that if spectrum allocation did not take place by September 2010, the bid amount along with interest would be refunded to successful bidders. However, the Department of Legal Affairs objected to this saying this could burden the government's revenues.

The DoT has spectrum to accommodate only two players. The rest is with the defence forces, which has agreed to vacate the air waves on the condition that an optical fibre cable network is rolled out to connect key defence locations. But the Finance Ministry wants to sell spectrum to at least three or four players to generate more revenues.

The objections raised by the Law Ministry had threatened to delay the auctions beyond this fiscal. However, both the Finance Ministry and the Department of Telecom have taken cognizance of the concerns and dropped the clause from the NIA.

The Finance Ministry, which is keen to get the revenues from the proposed auction within this fiscal, could now push through with the spectrum sale over the next 40 days.