Centre Requests Supreme Court To Clarify 2G Verdict, Seeks Spectrum Assignment Through Means Other Than Public Auction In Certain Situations

The Union of India has moved an application before the Supreme Court seeking clarification of its judgement in the 2G Spectrum case decided 12 years ago which mandated that public resources like spectrum should be assigned through public auction.

The Union has sought a modification of the judgement to allow the assignment of spectrums through processes other than public auctions in certain situations. The Top Court in 2012 set aside the 'first-come-fisrt-served (FCFS) basis for the assignment of 2G spectrum which was done with alleged arbitrariness by the Government Officials. 

On Monday (April 23), Attorney General for India (AG) R Venkataramani mentioned the application before CJI DY Chandrachud for urgent listing.  Advocate Prashant Bhushan, representing the Centre for Public Interest Litigation (CPIL), the original petitioner in the case, raised objection to the application. The CJI asked the AG to circulate an email for an early listing of the matter, which would be considered. 

What Was The 2G Spectrum Case? 

On February 2, 2012, the Supreme Court in UOI v. CPIL examined the question of whether the grant of  Unified Access Service License (UAS Licence) with 2G spectrum at a price fixed in 2001 on the basis of FCFS was contrary to Article 14 of the Constitution. 

The Court held that the method of FCFS will always have an element of subjectivity in selection and may be at a risk of misuse, while public auctions in comparison was a more transparent and reasonable means to dispose of public property or national assets. 

"76....To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy  applicants. When it comes to alienation of scarce natural resources like spectrum etc., it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values...."  

Why Is The Union Now Seeking Permission For Assignment As Opposed To Auctions? 

The Union, as per their written submission, stated that subsequent to the judgement, the Moblie Access spectrum is being assigned to telecom service providers on the basis of regular spectrum auctions. 

However, the exemption from the auction method is sought specifically for non-commercial purposes in order to discharge sovereign and public interest functions including security, safety, disaster etc. 

"Such non-commercial use would squarely fall within the scope of subserving the common good."

It was further added that in certain situations, economics do not favour auctioning but rather assignment, especially when demand is lower than supply. In such cases sharing the resource seems feasible than giving each person their own piece - like with radio frequencies used for communication in space. It is more about efficiency and making sure resources are used in the best way possible.

"That, assignment may require to be undertaken administratively due to economic conditions such as demand being lower than supply or due to technical conditions such as spectrum for space communication, where it would be more optimal and efficient for spectrum to be shared by multiple players, rather than being broken up into smaller blocks for sole purpose of exclusive assignment by auction"  

There are also instances where the commercial use of the spectrum requires limited and sparing purposes like when airwaves are only needed once or sending signals between towers. There also, an auction doesn't seem to be a financially feasible option. 

"There are also specific sui generis categories of usage, including commercial use of spectrum where, technical and economic conditions of the use affect the feasibility of auction as a means of assignment of spectrum and thus auction as the exclusive mode may present some issues in the relevant assignment (e.g., in the case of captive use, radio backhaul or one time or sporadic use). 

The Union said that in such cases, spectrum is being allotted administratively, at administratively determined prices. However, in view of the CPIL judgment, these assignments are made on the condition that it is interim and provisional.

The Union therefore seeks the issuance of clarifications that allow the centre to carry out the assignment of spectrum with administrative fairness. 

"Issue appropriate clarifications that the Government, may consider the assignment of spectrum through administrative process if so.determined through due process in accordance with law, and if such assignment is in pursuit of governmental functions, or public interest so requires, or auction may not be preferred due to technical or economic reasons;" 

Case : Centre for Public Interest Litigation (CPIL) v. Union of India | Miscellaneous Application in WP(c) 423/2010