Wednesday, August 22, 2012

2G auction deadline hearing on Friday

New Delhi, August 22, 2012.

The Supreme Court on Tuesday decided to hear on August 24 the Union government's application seeking extension of time till November 12 to commence auction of 2G spectrum licences.

In February, while quashing 123 licences, the court gave four months time to conduct auction for grant of licences. On April 24, this time limit was extended till August 31.

A Bench of Justices G.S. Singhvi and S.J. Mukhopadhaya fixed the date of hearing after senior counsel P.P. Rao requested that the application be listed for hearing at the earliest.

In the application, the Centre said it was committed to implementing the directions contained in the 2G judgment. On the basis of recommendations of the Telecom Regulatory Authority of India, the Department of Telecommunications submitted a report to the Empowered Group of Ministers for its consideration of the following issues: matters relating to the appointment of the auctioneer; the quantum of spectrum, the number of blocks and size of blocks to be auctioned in 1800 and 800 MHz bands; rollout obligations to be imposed; terms of payment by successful bidders; reserve price and the spectrum usage charges.

Many steps

The Centre said the process involved in this decision-making entailed a number of steps. To conduct auction for licence/spectrum as done for allocation of spectrum in 3G band, the Centre had drawn up an accelerated schedule. For 3G auction in 2010, the process took 542 days; against this the present auction process for 2G "contemplates that auction will be commenced within 97 days of the commencement of work by the auctioneer."

It said: "Enough time needs to be given to bidders to enable them to take all necessary steps to participate effectively in the auction, including for raising of funds/resources and obtaining internal approvals. Only if sufficient time is provided, effective participation and proper discovery of market price of spectrum would result. In the absence of adequate time, the objective laid down in the 2G judgment for allocating spectrum through auction at market prices may not be fully achieved and the government of India may be impacted adversely."

The Centre said: "Following auction results and receipt of payments against spectrum charge, applications for licence will need to be scrutinised and fresh licences will be required to be granted to the new entrants, while existing licences will need to be amended incorporating the terms and conditions of allocation of spectrum acquired through auction by the existing licencees."

Hence the Centre sought a direction to facilitate the actual auction of spectrum on or before November 12 and to pass orders that the Centre might complete the further process of allocation of spectrum and grant of licences in 40 days thereafter.

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