Parliamentary panel wants end use of spectrum clearly defined in auction

A Parliamentary panel has recommended that airwaves sold to companies should clearly identify their end use to avoid situations like the one that had led to CAG's critical remarks in the past about Reliance Jio making undue gains from BWA spectrum auction.

The Standing Committee on Communications and IT, in its report, recommended that greater clarity be built into spectrum auction documents including clearly spelling out scope of usage of airwaves with robust mechanisms built to also ensure its efficient utilisation, as it cited CAG report of 2015 on how "deficiencies" in past BWA auction had led to an undue advantage of Rs 3,367 crore for Reliance Jio Infocomm (previously Infotel).

Drawing attention to the said report, the committee further recommended that migration pricing for operators should be aligned with current market rates to prevent financial advantages that are not justifiable.

"A robust mechanism for monitoring the progress of service rollouts should also be put in place, with penalties for delays to ensure that the spectrum is utilised efficiently," the committee said suggesting that post-auction review mechanism should also be established to ensure that operators use the spectrum as per terms of the auction.

While giving its recommendations, the committee quoted extensively from the CAG Report number 20 of 2015 which, at that time, had raised significant concerns about the lack of due diligence in the auction of spectrum for Broadband Wireless Access (BWA) services, particularly highlighting deficiencies in the Notice Inviting Applications (NIA).

"The NIA allowed UAS, CMTS, and ISP operators to bid for the same BWA spectrum, despite their licenses governing the usage of the spectrum differently. This created confusion and potential misuse of the spectrum. Post-auction, M/s Infotel (now Reliance Jio Infocomm) requested network codes to offer voice services beyond the scope of their ISP license," it said.

It noted that the Department of Telecom (DoT) facilitated this request by allowing Infotel to migrate to a Unified License at prices set in 2001, granting them an undue financial advantage of Rs 3,367.29 crore.

Additionally, despite the auction occurring, the rollout of BWA services remained negligible, raising concerns about the effectiveness of the auction process.

"To address these issues in future, the Committee recommend that the NIA framework for spectrum auctions be more clearly defined, particularly regarding the scope of spectrum usage for different classes of licensees. This would prevent ambiguity and ensure that only operators with the appropriate licenses and requirements can bid for specific spectrum bands," the committee noted.

The committee highlighted that increasing transparency in the auction process, with clear communication to stakeholders, would enhance public confidence and ensure the process is fair and effective and implementing these measures would make spectrum auctions more transparent, efficient, and beneficial for all stakeholders, including consumers.