The Prime Minister's office responded to The Hindu two reports which was carried on Monday on the 2G issue

“Two reports appeared in The Hindu today [on Monday] regarding the 2G licensing and spectrum allocation matter which is currently being looked into by the JPC, PAC and the CBI.

2. The reports allege that “New Papers show PMO analysed and agreed with Raja’s actions before 2G scam” and that “Within 2 weeks of the 2G scam, PM wanted ‘arm’s length’ from Raja”. The first report has a box item which says that “PMO was in agreement that start-up spectrum be allocated at ‘normal rates’. This implies no revision in entry fee, a crime for which the CBI charge sheet accuses Raja.”

Factual inaccuracy

3. The Hindu report is factually incorrect. The inaccuracies are:

(1) The report claims that it is based on ‘new papers’ and ‘new evidence’. This is factually incorrect as all documents have been in the public domain for a long time now. Copies of these documents have been submitted to the JPC and PAC. Therefore, this is not a case where some new material has been discovered suddenly, as the report claims.

(2) The primary material on which the report is based and the noting quoted in the report that “PM wants this informally shared with the Department. Does not want formal communication and wants the PMO to remain at arm’s length please” has been widely reported in the past and on which a detailed clarification was issued by the Prime Minister’s Office on 31st July, 2011. Therefore, there is no ‘new material’ on which the reports are based. The “new” papers and evidence which the reports rely on are mentioned in Para 3 (a)-(d) of the PMO’s Press Release. This has been widely reported in the past and is not fresh material.

Clarifications in the past

4. The PMO Press Release of 31st July, 2011 refers to the same set of papers and clarifies the situation clearly. The clarification is reproduced:

“2. The note of the Prime Minister's Office, on which the above noting was recorded, proposed consideration of an approach as follows:

a) Fix a ‘threshold’ level of spectrum that each operator must have in order to function with a minimum level of efficiency.

b) Existing operators holding spectrum above the threshold level may be allowed a certain amount of time to raise the subscriber levels to reach full utilisation of spectrum, failing which the excess spectrum may be withdrawn.

c) New operators may be allotted spectrum only up to the threshold level on payment of the normal fees.

d) The balance spectrum may then be auctioned among all those who hold spectrum up to the threshold level.

3. The proposal of the Prime Minister’s Office was to forward these suggestions to the Department of Telecom for further consideration on the basis of individual consultations with the main players and TRAI.

4. It was well known at that time that there were conflicting interests between existing operators and new entrants. The Prime Minister felt that this matter required detailed examination and deliberation by the Department of Telecom in consultation with TRAI and others. He felt that, under the circumstances, it was not appropriate for the Prime Minister’s Office to pronounce on the matter till the subject had been carefully considered by the administrative ministry in consultation with TRAI and other concerned departments. Therefore, it was sent as an informal suggestion to the Department of Telecom for consideration.

5. The above clearly brings out that the noting under question can in no way be construed to mean that the Prime Minister or his office looked the other way on matters relating to the grant of licence or spectrum charges etc. It related solely to the manner in which the approach summarised above should be conveyed to the Department of Telecom to be considered on merits without being viewed as a direction from the Prime Minister or his office.”

5. In his Statement in Parliament, the Prime Minister has clearly stated the concern about wrong doings was not about the first-come first-served policy but the manner in which it was implemented and whether it was implemented appropriately. Excerpts from the Prime Minister’s statement in Rajya Sabha are reproduced below:

“… The Government’s policy of the pricing of Spectrum was taken on the basis of a Cabinet decision of 2003 which specifically left the issue to be determined by the Ministry of Finance and the Ministry of Telecommunication… the record clearly shows that the then Minister, while he initially had a different view which he communicated to me on January 15, 2008, subsequently consulted the Minister, Telecommunication and the two Ministers worked out an agreed formula on Spectrum charges, which was reported to me in a meeting on July 4, 2008. Furthermore, this decision that was put to me by the two Ministers was in line with the recommendation of TRAI in its Report of August, 2007. In that Report, the TRAI had clearly stated that only 3G Spectrum should be auctioned and the policy for 2G Spectrum should continue on the same basis as hitherto.

This recommendation of TRAI was based on the need to ensure a level-playing field between the new entrants and the incumbents. The two Ministers had agreed on this because of legacy consideration and I accepted their recommendation. Sir, on the issue of implementation of the first-come first-served policy, the situation is more complex. I was categorically assured by the then Minister of Telecommunication that the policy was being implemented appropriately with one departure, which was cleared by the Solicitor General. Subsequent developments suggest that this was not the case. The matter was taken up for investigation by the CBI in 2009. The Government at no stage interfered with this investigation… No one should have any doubt that those found guilty of manipulating the system unfairly will be severely dealt with under the law.”

6. Excerpts from the Prime Minister’s statement in the Lok Sabha are reproduced below:

“People ask me why then all these concerns about the wrong-doings. My respectful answer to that is that when I looked at the telecom situation in 2007-2008, the proposal that came to me was that the Ministry had decided not to go in for auctions. At that time, it had the support of the technical arm of the telecom regulatory system, the TRAI; it had the support of the concerned Ministry; and I felt that for level-playing field, it was entirely appropriate that we should continue on the path which we had followed until 2007.

Then subsequently it turned out to be that while the policy was sound, the way it was implemented, I think, gave rise to problems.

Those problems will now be looked into by the JPC; they are being looked into by the PAC; and if there are any criminal aspects, they are being looked into by the CBI.”

7. The Hindu reports only selectively repeat what was already known and was clarified both by Prime Minister in Parliament and in the Press Release of 31.7.201.”

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