Can the government, while resorting to auction of telecom spectrum, impose a ceiling on acquisition with the aim of avoiding dominance in the market by any licensee/applicant, taking into consideration the Telecom Regulatory Authority of India (TRAI) recommendations, the presidential reference sought in the Supreme Court wants to know.

Article 143 (1) of the Constitution says: “If at any time it appears to the President that a question of law or fact has arisen, or is likely to arise, which is of such a nature and of such public importance that it is expedient to obtain the opinion of the Supreme Court upon it, he [she] may refer the question to that court for consideration and the court may, after such hearing as it thinks fit, report to the President its opinion thereon.”

The Supreme Court has powers not to give an opinion. The hearing of a reference is conducted before at least five judges. It will be restricted to the questions on which the reference has been made and the court has no power to either substitute the facts or formulate/supplement questions not mentioned in the reference.

Thursday's reference further wanted to know whether it would be permissible to make a provision for allotment of spectrum from time to time at the auction-discovered price and in accordance with the laid down criteria during the period of validity of the auction-determined price; whether it would be permissible to make a provision for allocation of spectrum at auction-related prices in accordance with laid down criteria for bands where there may be inadequate or no competition (e.g. there is expected to be a low level of competition for CDMA in 800 MHz band) and the TRAI has recommended an equivalence ratio of 1.5 or 1.3x1.5 for 800 MHz and 900 MHz bands depending upon the quantum of spectrum held by the licensee that can be applied to the auction price for 1800 MHz band in the absence of a specific price for these bands.

“What is the effect of the [2G] judgment on 3G spectrum acquired by entities by auction whose licences have been quashed by the said judgment?” the reference wanted to know.

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