Why spectrum auction process is delayed every time

Post CAG's activism in exposing the 2G scam, DoT has become risk averse, resulting in delays on critical issues like spectrum auction

A Committee of the Department of Telecommunications (DoT) has asked the Telecom Commission to make a back reference to the Telecom regulatory Authority of India on the regulator’s recommendations on the reserve price for 2100MHz band spectrum, stating that it is on the lower side.

The reserve price for 2,100-MHz will be finalised by the Cabinet once the Telecom Commission gives its recommendations. The commission is scheduled to meet on January 7 to deliberate on the suggestions of a DoT committee that has reviewed the recommendations of the Telecom Regulatory Authority of India (Trai) on valuation and pricing of this spectrum.

Now, this is not the first time the DoT Committee has done this. In the past couple of years, it has done the same every time Trai has given its recommendations on valuation and pricing of spectrum for future auction.

Trai’s suggestions are reviewed by a Committee of the Department of Telecommunications (DoT) before it goes to the Telecom Commission for finalization.

The reason why the DoT Committee does this is simple. It takes into account the 2G scam. As valued by the Comptroller and Auditor General of India (CAG), the Government had lost about Rs 1.76 lakh crore in the 2G scam.

Now, nobody wants to take the risk of being blamed, in case something crops up later and CAG puts some number as presumptive loss. Each department now wants to pass the blame onto the other party. Trai does its job by suggesting a price based on scientific formula, and the DoT Committee says it’s not justified, it could have been much more. The Telecom Commission then send the matter back to the regulator, the regulator sticks to its points and sends the matter back to the DoT with explanations. And then, it again goes back to the DoT Committee and then again to the Telecom Commission which then gives its suggestions for fixing the base prices. The matter then reaches the Cabinet which finalizes the prices based on Telecom Commission’s suggestions and the Trai recommendations.

The whole process takes a few months due to the entire chain of events but this could have been easily avoided.

The time that the regulator has to spend on reference and back reference and giving explanations, it could have worked on several other issues that need consultations or regulations. But, just to make sure that the blame does not come on the DoT in future, in case any unfortunate scenario crops up, the DoT has been doing this.

For other issues, DoT pushes the ball to the legal system’s court. Nobody wants to take responsibility, be it the DoT, be it the regulator.

If the Government and its departments don’t want to take the responsibility, who will?