Justifying FCFS policy, it tells apex court auction will hit promotion of teledensity

The Union government on Friday justified the first come, first served (FCFS) policy and urged the Supreme Court to review the 2G judgment, which quashed spectrum licences and directed issuance of fresh ones on the basis of auction.

The Centre said it was only questioning the conclusion of the judgment that all national resources should be auctioned. Absurd results would follow from the conclusion, as it (the government) was bound to implement auction policy in distribution of all natural resource/national wealth in all circumstances and would be precluded from following any other policy.

The government could only formulate a single policy for distribution of any natural resource/national wealth, irrespective of any reasons to the contrary. Auction of 2G licences would adversely affect and hamper the objective of promoting teledensity in semi-urban and rural areas.

As new entrants would be burdened with very high acquisition costs for licence and spectrum, it was unlikely that they would penetrate new markets and offer services at a competitive cost to consumers in terms of urban and rural areas.

The government said the judgment would adversely affect competition in telecom operations. It disagreed with the observation that the telecom policy was flawed, saying the policy decision was not open to judicial review.

Having travelled beyond the limits of judicial review and entered the realms of policy-making, the court did not apply its mind to the considerations of promoting growth, affordability, penetration of wireless services in semi-urban and rural areas and maintaining a level-playing field, it said.

The court came to the conclusion that the only method of maximisation of revenue for the state was through holding of public auction, without applying its mind in the facts of whether this was the case. Had the court applied its mind, it would have considered that in the prevailing facts and circumstances at the time the policy was adopted — the FCFS policy — was more advantageous to the state in maximising revenue in the long-term rather than short-term by promoting growth and penetration of wireless services in semi-urban and rural areas.

Contending that the FCFS policy had the twin objective of a level-playing field and providing affordability, the Centre sought a direction to review the February 2 verdict.

More In: National | News