DoT-Trai tiff over floor pricing may delay spectrum auction again - Economic Times ~ Electronic Gadgets

NEW DELHI: The ongoing tussle between the telecom department and the sector regulator over the floor price of spectrum in the 800 Mhz band threatens to further delay the much-awaited spectrum auctions.

In the latest in this bitter saga of disagreements between the executive and regulatory arms of the government, the Telecom Regulatory Authority of India (Trai) has cited technical holes while declining the telecom department's (DoT) second request to recommend a price for the spectrum traditionally used for rendering CDMA technology services. It instead has asked DoT to make a fresh request to it.

"Unless it is clarified that this request for recommendation is fresh, then and only then can Trai initiate action in the matter," the authority has written in its response to the telecom department's request. The letter has been seen by ET.

Industry experts say that while the regulator is not technically wrong in seeking fresh recommendations, what this means is that the regulator will then initiate the entire process of floating a consultation process which involves seeking the views of public at large, the counter arguments and then holding an open house before finally arriving at a conclusion.

"This is going to be a lengthy procedure which could surely push the auctions further away, if the government wishes to hold all the three auctions of 800, 900 and 1800 Mhz together," Mahesh Uppal, a telecom analyst, said. According to the latest government-mandated timeline, the auc tions have already been pushed back to January 21, a delay of two weeks from the original schedule. Under the Trai Act, DoT may seek the regulator's clarification over its recommendations only once.

The Act allows the regulator a time span of 15 days within which it may respond, failing which the telecom department is free to make whatever decisions it deems fit.

In the present matter, the telecom department has already exercised that facility and, technically, it must make a fresh reference to the regulator now.

Following the decision of the Telecom Commission that Trai should be requested to recommend a floor price for 800 Mhz spectrum, DoT had solicited the regulator's recommendation over what the price should be, and requested that it be proposed within 15 days. The deadline seems to have further irked the regulator.

"There is no provision in the Trai Act which enables the stipulation of time limits. Hence, it is not appropriate for DoT to presume it can suggest a time limit (even as preference)," Trai wrote.

At the heart of the matter is the issue of whether to auction 800 Mhz right now or whether to develop it as an extended GSM band. At one end of the argument is Trai, which has repeatedly favoured holding on to the spectrum and developing it as an EGSM band.

"CDMA is a dying ecosystem and auctioning spectrum in this band to CDMA players will amount to giving away a precious natural resource at a throwaway price," the regulator has explained while not recommending a price for the spectrum in the 800 Mhz band.

In fact, Trai further went on to say that auctioning the spectrum for a technology which didn't have sufficient takers would, in turn, amount to defying the apex court's verdict which said natural resources shouldn't be given away at a throwaway price.

However, the telecom department has maintained that the government must auction spectrum in order to comply with the same court verdict which said that the government must auction all spectrum freed by the cancelation of licences in February 2012.

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