Dialling in: Admin price rings louder than satellite spectrum auction bid

While the market for satellite broadband currently is small ($10-15 million), the potential is large as an estimated 30% of the country does not have reliable terrestrial broadband services

It has been an over two-year battle, and the question to be decided was whether to auction satellite broadband spectrum or offer it at an administrative price. The raging debate is now settled in the proposed telecommunications (telecom) Bill submitted in Parliament on Monday, in favour of the latter.

There were four actors in the game.

OneWeb, led by Sunil Mittal, pushed for administrative allocation, locking horns with Reliance Jio, which aggressively demanded an auction as the fairest way to allocate spectrum.

The other difference of opinion was within the government and its institutions — between the Department of Telecommunications (DoT), which wanted an auction as the preferred way. Still, the regulator was not forthcoming and wanted a bigger consultation.

It all began in September 2021 when DoT sent a reference to the Telecom Regulatory Authority of India (Trai) for recommending appropriate frequency bands and block sizes, base price, and quantum for the auction of space-based communication services spectrum.

After many letters were exchanged asking for clarifications between the two, Trai came out with a consultation paper this year in April regarding what would be the best way — auction, administered, or some other way to allocate spectrum — opening up the debate once again.

Clearly, the DoT view that an auction is the best way out was endorsed by none other than Communications Minister Ashwini Vaishnaw when, in an interview responding to the contentious issue to Business Standard, he said: “Our preference is for an auction. If we can formulate a reasonable and fair auction process, why should we not go for it? If it is impossible to formulate it, the Bill provides for administrative allocation.”

But a strong case was made not only by OneWeb and Mittal but also the Indian Space Association (ISpA) — which represents key satellite players — as well as support from Tatas (Nelco), Project Kuiper (part of Amazon), and even Elon Musk’s Starlink, all of whom want to provide satellite broadband services in India. And this was evident in their replies to the consultation paper of Trai.

Jio was the sole player on the other side of the fence.

Sure, while the market for satellite broadband currently is small ($10-15 million), the potential is large as an estimated 30 per cent of the country does not have reliable terrestrial broadband services.

Proponents of administrative allocation say that it is a global trend, and India cannot be an outlier. They point out that in terrestrial — the game is different — operators require exclusive frequencies carved out for each player in different bands and earmarked frequencies with no interference. So frequency is given on auction.

But in satellite services, the spectrum is globally shared by satellites that work mostly within a particular band, and spectrum use is already coordinated by satellite companies through a dynamic automated system on a good faith basis. So it should be given administratively. They also argue that countries like Thailand, Mexico, and Brazil which tried auctions eventually shifted to administrative allocation.

They argue that sharing will improve the efficiency of spectrum usage and over 200 small satellite startups offering services in India, such as connectivity to fishermen at sea, will also get access to the spectrum. Under the expensive auction route, they will have no option but to close down.

But companies like Jio opposed the move because it will create an uneven play as mobile players pay for the spectrum to offer the same service — broadband services — which satellite players will also offer but without any cost on the spectrum. They also fear that early three to four entrants in satellite communications will be given the preferred orbital slots by the International Telecommunication Union on a first come, first served basis and crowd out the newer ones from the game.

Even though Trai has still not come up with its final views on the consultation process, it is clear that the government has decided to offer spectrum through the administrative route rather than DoT's preference for auction.

STRONG SIGNALS

September 2021

DoT sends a reference to Trai to recommend block size, frequency, and base price for the auction of spectrum for satellite broadband services

September 2021-December 2022

Trai seeks clarification from DoT through various letters on various issues, which are responded to by DoT. For instance, Trai asks for which kind of services, space-based communication has been envisaged to be granted spectrum through auction

April 2023

Trai comes out with a consultation paper on the assignment of spectrum for space-based communications services. Asks for responses

May 2023

Comments and counter-comments from stakeholders submitted

September 2023

Trai Chairman P D Vaghela retires. Final report on satellite spectrum pending