Over a decade after the Supreme Court’s landmark judgment in the 2G spectrum allocation scam, the Union government has moved an application seeking a relaxation of the mandatory auction process for spectrum assignment. The government’s plea, listed urgently before Chief Justice of India D.Y. Chandrachud, proposes that certain classes of spectrum be allocated through administrative processes, giving the government the final say in selecting operators. This move has come amidst the Central Bureau of Investigation’s (CBI) appeal against the acquittal of A Raja, K Kanimozhi, and others in the 2G spectrum allocation scam.
The 2G spectrum allocation scam, which allegedly took place in 2008, involved the allocation of 122 2G licenses on a first-come-first-served basis, leading to a loss of over ₹ 30,000 crores to the exchequer. The Supreme Court, in its 2012 verdict, had canceled these licenses and emphasized that spectrum, being a scarce natural resource, should be allocated through fair and impartial auctions. The Court had also cautioned against the misuse of a first-come-first-served basis for allocating natural resources, advocating for competitive auctions instead.
In its plea, the government has argued that while auctions may be the preferred method for commercial telecom services, administrative allocation may be more appropriate in certain situations. These include cases where spectrum is required for sovereign or public interest functions such as security, safety, or disaster preparedness. The government has also pointed out that administrative allocation may be more efficient when demand is lower than supply or for space communication, allowing multiple players to share spectrum rather than breaking it into smaller blocks for exclusive assignment.
The government’s plea also draws on observations made by a Constitution Bench in a 2012 Presidential reference concerning the 2G verdict. The Bench had noted that the auction method prescribed in the verdict was not to be considered a constitutional mandate for the alienation of natural resources excluding spectrum. The Court had suggested that auction may not be an absolute or blanket statement applicable to all natural resources, leaving room for situations where alternative methods may be desirable.
The Telecommunications Act, passed by Parliament in 2023, empowers the government to assign spectrum for telecommunication through administrative processes other than auction for specific entities listed in the First Schedule. These include entities engaged in national security, defense, and law enforcement, as well as Global Mobile Personal Communication by Satellites (GMPCS) such as Space X and OneWeb. The government can also assign part of a spectrum that has already been assigned to one or more additional entities, known as secondary assignees, and even terminate assignments where a spectrum or a part of it has remained underutilized for insufficient reasons.
