Centre Seeks Supreme Court’s Clarification on Administrative Allocation of Spectrum

April 23, 2024

The Union government has approached the Supreme Court seeking clarification on whether it can allocate certain classes of spectrum through administrative process, rather than competitive auctions. The government argues that administrative allocation may be necessary in certain situations to address unanticipated priorities related to national security, public interest, or when auctions are not viable due to technical or economic reasons.

Background

In 2012, the Supreme Court, in the landmark 2G spectrum case, had held that the state must adopt a method of auction when it comes to the alienation of scarce natural resources like spectrum.
Subsequently, a Presidential reference was also made on this issue, which reiterated the need for competitive auctions for distribution of natural public-owned resources.

Government’s Plea

The government, in its application, has sought clarification on the following points:

Administrative allocation of spectrum should be allowed if determined through due process and in accordance with law, if such assignment is in pursuit of governmental functions or public interest, or if auction is not preferred due to technical or economic reasons.
Assignment of spectrum may be required administratively due to economic conditions (demand being lower than supply) or technical conditions (spectrum for space communication, where sharing by multiple players is more efficient than exclusive assignment through auction).
Spectrum is required not just for commercial telecom services, but also for non-commercial use for discharge of sovereign and public interest functions like security, safety, disaster preparedness etc. In some cases, auctions may not be technically or economically optimal.

What is Spectrum?

Spectrum is a scarce natural resource, and its allocation has been a contentious issue in India.
The 2G spectrum case, which led to the cancellation of 122 telecom licenses by the Supreme Court, was one of the biggest corruption scandals in India’s history.
The government earns substantial revenue through spectrum auctions. In the recently concluded auction in March 2021, the government earned over Rs 77,800 crore.
Apart from commercial telecom services, spectrum is also used for various other purposes like defense, space communication, disaster management, broadcasting etc.

About Indian telecom sector

The Indian telecom sector is the world’s second-largest by number of telephone and internet users.

India has over approx. 1.16 billion telephone subscribers
The sector is dominated by three major players: Reliance Jio, Bharti Airtel, and Vodafone Idea
The Department of Telecommunications (DoT) is responsible for policy formulation, licensing, and coordination matters
The Telecom Regulatory Authority of India (TRAI) is the regulatory body for the sector
The government has launched various initiatives like Digital India and BharatNet to boost connectivity and digital services

The government’s plea for clarification on administrative allocation of spectrum is a significant development, as it seeks to balance the need for transparency and fair competition.

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