2G spectrum scam judgment: Why it’s a lie that UPA government followed the NDA in 2G licence applications

Editor’s Note: A  special court is likely to decide  the fate of  former telecom minister A Raja, DMK MP Kanimozhi and several others in the much-anticipated 2G spectrum allocation scam cases. For a quick understanding of the scam, read these explainers by Shalini Singh — the reporter who broke the story —   here  and here . While trying to defend itself, the Manmohan Singh government often used to say back then that they just followed the first-come-first-served (FCFS) policy set by the Atal Bihari Vajpaee government in 2003. Here’s why: 1. The UPA government was not bound by an NDA Cabinet decision. 2. Cabinet decisions of an Opposition party are neither statute nor have parliamentary oversight and can therefore be changed. 3. The Cabinet decision of 2003 faced no dissent — either before or after — from any ministry or chairman of the Group of Ministers (GoM). The decision of 2008 was constantly opposed by the prime minister (2 November, 2007), finance ministry (6 July, 2007, November 22, 2007) and chairman of the GoM on spectrum (12 December, 2007). [caption id=“attachment_4269085” align=“alignleft” width=“380”] File image of A Raja. News18[/caption] 4. No government policy can claim its reliance on a Cabinet decision of an Opposition party, five years earlier, and that too with written oppositions from the prime minister, finance minister and chairman of the GoM on spectrum. Policy (after discussion and differences) ultimately represents consensus across ministries. In 2008, there was no consensus even till 9 January, 2008, a day before A Raja hurriedly handed out the licences. 5. The 2003 Cabinet decision resulted in UASL guidelines of 11 November, 2003. The UPA scrapped those guidelines and announced new UASL guidelines on 14 December, 2005. These became the basis of UAS licences given by Dayanidhi Maran and Raja and not the Cabinet decision of 2003 that was killed by the UPA. 6. The Cabinet decision of 2003 mandated under Section 2.1.2(3) an agreement/concurrence between the finance ministry and the Department of Technology on the issue of spectrum pricing. This was done for 2003 (Arun Shourie), but never for 2006 (Maran) or 2008 (Raja). In effect, the Cabinet decision of 2003 was violated in letter and in spirit. So even if the 2003 Cabinet decision had not been killed by the UPA, it cannot take refuge under the same. 7. The Cabinet decision of 2003 implemented the FCFS policy announced by the government vide its notification number 10-2/2000-BS/II dated 23 March, 2001 (priority based on date of application). The 2008 decision not only manipulated the FCFS policy to change its definition from date of application to date of payment but further arbitrarily and illegally chose who would come first by leaking insider information (as per the CAG report dated 16 November, 2010). The decision of 2008 was not in line with FCFS as had been implemented by the NDA and even the UPA itself until 14 December, 2006. 8. The 2003 implementation did not treat equally placed applicants in a discriminatory manner (all 22 applicants received licences within six months). In 2006, applicants were made to wait for over a year and in 2008, 575 similarly-placed applicants were discriminated by illegally advancing the cut-off date from 1 October, 2007 to 25 September, 2007.

9. A legal challenge against the government policy of 2003 was withdrawn from the Supreme Court. Then, a legal challenge against the press release implementing the UPA decision of 2007 was quashed by the Delhi High Court on 1 July, 2008 and the by Supreme Court on 12 March, 2010. There was no successful challenge or court order against the Cabinet decision of 2003 implemented in 2004. 10. Statutory regulator TRAI had fully supported the implementation of the Cabinet decision of 2003 vide its letters dated 14 November, 2003 and 19 November, 2003. In sharp contrast, the 2008 decision was vehemently opposed by the independent regulator through its letters dated 15 and 19 November, 2007, and 14 January, 2008. [caption id=“attachment_4269083” align=“alignright” width=“380”] File image of Dayanidhi Maran. AFP[/caption] 11. The process followed to arrive at the Cabinet decision of 2003 included an approval of the TRAI recommendations by the GoM. In 2006 (Maran) and 2008 (Raja), the GoM was specifically circumvented and there is no evidence that the Cabinet approved the decision. In fact, even the full Telecom Commission was deliberately prohibited from reviewing the TRAI recommendations. 12. The 10th Five Year Plan directed that the pricing of spectrum be linked to its scarcity. In 2003-04, the NDA government received applications for only 14 new GSM (and 12 CDMA) licences when it had line-of-sight into spectrum for over 210 GSM licences. Supply far exceeded demand. In sharp contrast, in 2008, the UPA government received 575 UASL plus 35 dual technology applications which equal a total of 602 applications for spectrum in only 156 circles. Demand far exceeded supply. The Cabinet decision of 2003 implemented by the NDA complied with its 10th Five Year Plan. The decision of the UPA in 2008 violated the 10th Five Year Plan. 13. A vast majority of the licences given in 2003 were for the B and C category circles where there were no takers. Teledensity was suffering. A vast majority of the spectrum allocated in 2008 was for A and B category circles, and even C had become the most prized circles owing to fibre growth. 14. The Cabinet decision of 2003 to enhance competition brought down tariffs from Rs six per minute in 2003 to 80 paise per minute in January 2008 (without intervention from the UPA). Licences issued in 2008 only reduced tariffs from 60 paise in 2009 (new entrants launched service) to 50 paise in 2010: A huge difference in tariff reduction — Rs 5.20 per minute in the NDA versus 10 paise per minute in the UPA. And so, on every single parameter, statutory procedure, level playing field, fairness, objectivity, legality, and due process, the 2003 Cabinet decision was implemented in an open, transparent manner with a far-reaching impact on India’s telecommunications sector. By contrast, the 2008 decision (that pretends to follow the NDA Cabinet decision of 2003) violated statutes — TRAI Act, Section 11(1)(a), Second Proviso — and procedure (circumvented GoM and the Cabinet), Government of India (Transaction of Business) Rules (concurrence between the DoT and the MoF where issues of revenue are concerned) and legality (press release of 10 January, 2008 has been quashed by the Delhi High Court and remains undisputed by by the Supreme Court). Finally, the Cabinet decision of 2003 did not result in any windfall gains for private auctions either at the cost of the exchequer or by using the unsuspecting consumer as an excuse. In fact, the 2008 decision of the UPA neither needs to be nor was, in reality, based on the Cabinet decision of 2003 or its implementation in 2004. There cannot be a more stark contrast between the two. The author broke the 2G scam in a series of articles in The Times of India between 2008 and 2010 and beyond.