Justice Patil report: How DoT flouted norms since 2001

Our Bureau New Delhi | Updated on February 16, 2011 Published on February 16, 2011


The one-man panel report on the functioning of the Department of Telecom has thrown up a number of instances where operators have either gained or lost out due to flawed decision making by top officials of the department.

The mess started in 2001 itself when Mr Shyamal Ghosh was the Secretary and Mr Ram Vilas Paswan was the Telecom Minister, according to the report. Mr Ghosh allowed some companies that had applied for basic services licences to rectify the deficiencies in their applications even though the guidelines did not permit it. Such a decision overrode the notified guidelines, observes the report submitted by Justice (retired) Shivraj Patil. Tata Teleservices benefited from this.

On September 18, 2003, the then Telecom Minister, Mr Arun Shourie, approved the recommendations of a DoT committee to allocate additional spectrum beyond 8 Mhz to existing players including Bharti Airtel and Vodafone Essar.

According to the Justice Patil report, this decision was taken without it being referred to the TRAI and the Telecom Commission. “This order was not notified to the existing operators or to the public,” the report states.

Just two months later, on November 11, DoT Secretary, Mr Vinod Vaish, approved guidelines to give 2G licences to new players through first-come-first-served basis. The guidelines were similar to the one adopted for basic operators and was contrary to TRAI recommendations and the decision of the Union Cabinet. TRAI had suggested that new players should be introduced through a multi-stage bidding process.

Multi-stage bidding process

“If the said recommendations of TRAI to follow the multi-stage bidding process were not acceptable to the DoT or it desired to formulate a procedure to the contrary, it ought to have referred the recommendations back to TRAI. This was also not done. This matter was not even considered by Telecom Commission,” the panel report said.

The panel has indicted the UPA Government, which came to power in 2004, for not reviewing the 2G policy. “Between the period 2004 and 2008, if the entry fee was not to be revised to reflect the opportunity cost and when competitive bidding for determining entry fee was not followed; since the matter had financial bearing, before finalisation of procedure for grant of licence/allotment of spectrum, concurrence of Ministry of Finance ought to have been taken as per Rule 4 of Government of India (Transaction of Business),” it stated.

Specific instances of flawed procedures

The report highlights other specific instances where DoT had adopted flawed procedures.

In 2004, DoT delayed licence to Dishnet Wireless (now Aircel) in Madhya Pradesh. The panel has stated that the then Telecom Minister (Mr Dayanidhi Maran) issued directions that did not appear to be contemplated in the notified procedures. The then DoT Secretary, Mr Nripendra Misra, issued show cause notices to Dishnet, which caused further delay. Similar delays happened when Essar Spacetel (now Vodafone Essar) applied for new licences in seven circles in December 2004. The licences were given three years later in 2007.

In 2005, Idea Cellular made an application for UASL in Mumbai but did not fulfil the eligibility criteria. The company was given time beyond permissible limit and then the proposal not to extend time was kept pending by which time Idea Cellular got enough time to fulfil the conditions for getting the licence.

In 2007, DoT decided to keep on hold all applications for new Unified Access Services Licences. Until then UASL was supposed to be given to eligible companies within 30 days of application. The then DoT Secretary, Mr D.S. Mathur, approved the deviation which resulted in accumulation of applications, the panel has noted. Idea Cellular lost out a chance to get licence for West Bengal. The panel also slammed Mr A Raja's policy to give new licences in 2008 to Swan and Allianz Infratech without checking their eligibility.


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Published on February 16, 2011
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