He did not consult Telecom Commission and ignored GoM while taking crucial decisions
Apart from indicting A. Raja, the Justice Shivaraj V. Patil Committee report has faulted the functioning of Dayanidhi Maran during his tenure as Communications and IT Minister between May 2004 and May 2007.
The report accuses Mr. Maran, now Textiles Minister, of not consulting the Telecom Commission, Telecom Department's decision-making body, and ignoring the Group of Ministers (GoM) while taking crucial policy decisions.
The Committee, constituted to examine the appropriateness of the telecom policies and allocation of spectrum from 2001 to 2009, has remarked that actions during Mr. Maran's tenure fell foul of the procedures laid down in the Government of India (Transaction of Business) Rules, which stipulate that when a policy has any financial bearing, no orders shall be issued without the concurrence of the Finance Ministry. The Minister deviated from “extant policy” by not discussing the issue of determining the entry fee for telecom licence with the Finance Ministry.
The Dravida Munnettra Kazhagam (DMK) Minister also had his say when it came to the crucial issue of spectrum pricing, which has been a controversial aspect of the alleged 2G scam. Mr. Maran overruled a Group of Ministers (GoM) constituted by the Prime Minister and got spectrum pricing removed from its terms of reference, despite strong reservations from the Ministry of Finance.
In 2006, Mr. Maran superseded “all earlier orders relating to subscriber-based criteria for allotment of GSM spectrum” and for CDMA operators. The Minister took these two crucial policy decisions “without there being consideration by [the] Telecom Commission,” the report said.
TRAI, in May 2005, submitted its recommendations on effective utilisation of spectrum, spectrum pricing and spectrum allocation procedure. However, this was not placed before the Telecom Commission, which oversees important policy decisions relating to the telecom sector.
Citing various instances from 2004 to 2007, the Committee has observed that some applicants were treated favourably, while others were discriminated against. For instance, in March 2004, when Dishnet Wireless Ltd. (now Aircel) sought licenses under the Unified Access Service Licensing (UASL) regime, the application, after clarifications, was endorsed by the then Telecom Secretary. But the Minister's office put up a note demanding details that were “vague” and “irrelevant.” This saga continued late into 2006, and caused inordinate delay which “made other applicants wait” and “could [have] resulted in wastage of spectrum.”
While some applicants struggled to meet the “irrelevant” demands of the Minister, other service providers found the going easy. Idea Cellular was rendered ineligible to operate in Mumbai because Tata Industries Ltd. had higher equity in the company than was permitted. The procedure mandated that when a company became ineligible, it would lose seniority, even if it acquired eligibility later.
However, Idea retained its priority from the date of application when Tata Industries transferred the equity subsequently. This amounted, according to the Report, “a violation of the laid-down procedure.” Moreover, the time for rectifying discrepancies in Idea Cellular's Mumbai application was extended, without consulting the Finance Ministry.
The Justice Patil Report has also noted that in the application of Essar Spacetel Pvt Ltd, “information was sought for in a piecemeal manner.” The licenses were signed only three years later from the date of application and this “could [have] caused wastage of spectrum, besides making other applicants wait.”