Fcc Suspects Rigged Telecom Bids In India

The unsubstantiated charge by FCC forms part of tour speeches of its chairman Reed E. Hundt in London, Hong Kong and at home at a time when the Sukh Ram controversy was at its peak.

Documents available here quote Hundt as saying that the methodology of service areas licensing through auctions is superior to any other form as it is fast, fair and efficient and can jumpstart huge investments provided the auctioneers are honest and their methods transparent.

Auctions also dramatically reduce opportunities for political favouritism or corruption in competition for licenses, says Hundt but adds, as recent events in India suggest, auctions are not a perfect deterrent because they also can be rigged.

 

Yet auctions make bid rigging at least somewhat easier to uncover, says Hundt, apparently linking the CBI action against the former communications minister who had set the ball of telecom liberalisation rolling on government direction.

The FCC has taken upon itself the task of guaranteeing that the American flag companies do not face unfair competition in the growing global market for telecommunications and satellite services.

Significantly, none of the US companies which participated along with their Indian partners in the contentious basic services tender has raised any misgivings about the bidding process except indirectly raising doubts about the capping clause or terming the introduction of reserve prices for individual service areas an afterthought.

The documents quote Hundt as saying that when the US asks Asia to open its markets, it does so in order to boost world trade and economy for all countries through stimulating hundreds of billion of dollars in new investments in the next ten years. He also promises creation of a million jobs in that time frame.

Hundt contests the view that competition is not the right model for telecommunications in the developing countries. This, he says, might have been conventional wisdom in the past. But if it was ever right, it is now clearly wrong.

He quotes FCC data in stressing that most of the world has not had the chance to share the benefits of telecommunications revolution.

Two thirds of the people in the world have never made a phone call. Half of the world lives more than two day's walk from the nearest phone. In some countries the nearest phone for many is five days walk away.

People in many other countries are not even close to being able to afford basic telephone services.

In India, for example, the annual fee for use of a telephone line is 1.5 times per capita income, 29 times more costly than in the United States, Hundt says.

The gap between the developing and the developed world is even more dramatic in advanced telecommunications. As many as 98 per cent of all internet users are in high income countries. There are 21,150 times as many internet users in Sweden as in India, according to FCC data.

The data show that only nine per cent of telecom investment goes to low income countries.