A tug for spectrum between satcom providers and telcos

Satcom operators say spectrum allocation complicated, cannot be auctioned; telcos bat for auctions to ensure a level-playing field. A battle is brewing in the telecom sector, this time over the issue of allocation of spectrum for satellite-based broadband services.

While one side backed by Sunil Mittal believes that there is no need for exclusive rights over the spectrum for satellite communication, the other side wants it to be sold through an auction mechanism to maintain a level-playing field with existing mobile players which have had to buy expensive spectrum through multiple rounds of auction.

SS Sirohi, former Member, Telecom Commission, DoT (now Digital Communications Commission), told BusinessLine that spectrum is a sovereign asset of a nation within its jurisdiction and thus, a public property. Its distribution and allocation cannot be arbitrary, opaque and unfair.

“Auction of the spectrum is in fact necessary for keeping level playing field in the market and ensuring its distribution in a transparent, fair and non-discriminatory manner at a market-determined price to realise optimum public good. This is all the more necessary for the spectrum being used to provide similar kinds of competing digital communication services in the same market on a commercial mass scale,” said Sirohi.

Modern satcom
TV Ramachandran, President of Broadband India Forum, however, counters saying that “For over 20 years, it has not been possible for operators to reach internet connectivity and broadband to rural India, that is, to over 60 per cent of our population. Today, by the march of technology, modern satcom can serve this need immediately.”

Ramachandran maintains that incumbent telcos using terrestrial spectrum can provide a large bouquet of services. Satellite operators don’t have such advantages and are limited in nature, thus “comparing a satcom operator to terrestrial telco is like comparing a weak young David with the powerful giant Goliath.” he said.

Supporters of the auction argue that there are no weak players, considering that entities such as Elon Musk’s SpaceX, Sunil Bharti Mittal promoted OneWeb, and Amazon’s Project Kuiper are interested in the satellite-based broadband market.

“They are big companies with strong financial status. They should pay for resources as auctioning of the spectrum is a transparent process which is necessary, given India’s mired legacy with corrupt spectrum allocation leading to the famous 2G scam,” said an expert. He cited the Supreme Court’s 2012 judgment which held that the State is duty-bound to adopt the method of auction.

On the other hand, Ramachandran said it was incorrect to state that all types of the spectrum need to be auctioned as per the 2G case. “By that same logic all microwave backhaul spectrum of operators and all Wi-Fi spectrum will also need to be withdrawn and put to auction on a level playing field basis,” he said.

Auction opponents
Opponents of the auction also argue that assignment of satellite spectrum is more complicated than its terrestrial counterpart, needing global coordination, hence auctioning is unfeasible.

However, Delhi-based NGO Telecom Watchdog in a letter to Anshu Prakash, Secretary at the Department of Telecommunications, stated that the appeal for the allocation of the satellite spectrum administratively is merely a move for a number of deep-pocketed companies that have lined up to grab 4G and 5G spectrum for free under the garb of providing cheaper satellite-based high-speed internet services to rural and remote areas.

Reliance Jio, in a consultation paper in March, argued that the Supreme Court judgment on the landmark 2G case stated that the procedure adopted for distribution of a natural resource should be just, non-arbitrary and transparent and not discriminate between similarly placed parties. According to Jio, a duly publicised auction is the best method to discharge this burden.

BK Syngal, former Chairman and Managing Director of VSNL, said: “Satellite services used to be an intergovernmental affair in which case allocation of spectrum made sense given that the State is using its own resources. Moreover regulatory regime of the west cannot be compared to India, as it is more robust over there and they can safely allocate spectrum.” The Hindu BusinessLine