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2G scam back to haunt UPA govt, documents prove PM was apprised of the issue

Principal secretary at the PMO Pulok Chatterjee, who was secretary at the PMO in 2008, had apprised Prime Minister Manmohan Singh of the 2G spectrum issue involving former telecom minister A. Raja four days before the licences were allotted.

Mail Today Bureau | March 19, 2013 | Updated 15:20 IST

The 2G controversy may well be back to haunt the United Progressive Alliance government and its Prime Minister (PM). With disgraced telecom minister A. Raja trying desperately to depose before the Joint Parliamentary Committee looking into the matter, their hands may be forced with new revelations emerging to call him. And Raja waiting for an opportunity may well recount what this hitherto unseen note (accessed by Mail Today) has now put into public domain.

Pulok Chatterjee, secretary in the Prime Minister's Office (PMO), on January 6, 2008, just four days before Raja gave away precious spectrum on a first-come-first-served basis to a handful of operators, wrote to principal secretary TKA Nair and the PM apprising them of the 'spectrum issue'.

All this happened on the back of Raja's note to the PM dated December 26, 2007, (already in public domain) which says: "Discussions with external affairs minister (Pranab Mukherjee, who also headed the GoM on spectrum) and solicitor general (Ghoolam Vahanvati, now attorney general) have further enlightened me to take pre-emptive and proactive decisions on these issues as per the guidelines and rules framed."

This note was asked for by Nair after much correspondence between various players of the time. Chatterjee summarises by saying that his extensive note gives recommendations and suggestions.

While Chatterjee details several things which are well known in the preamble of his note like the fact that "allocation of very limited spectrum to each operator leads to high levels of inefficiency in the use of spectrum, what emerges is that he opts for an auction methodology", "Ideally in a situation where spectrum is scarce, it should be AUCTIONED though uncontrolled auction can lead to inflated bids, unacceptability high prices for the customer and threaten the financial stability of the industry".

He then goes on to suggest that "there are licensed operators who have excess spectrum while at the same time there are many pending applications awaiting allocation of spectrum".

Chatterjee then unveils a new spectrum policy based on new norms:

  • Allocation must ultimately be linked to the number of subscribers to ensure optimal use
  • Solution must be found within set of contractual rights already created
  • Existing operators which were allotted spectrum must be given an opportunity to reach efficient
  • New operators must be assured of the prospect of sufficient spectrum
  • Spectrum must be assigned value, its pricing must not be inflated to make it financially unsustainable
  • Licensing and spectrum allocation policy must be fair and transparent to ensure free competition
  • Progressing, Chatterjee reveals his approach which is slightly at variance with his initial comments, as AUCTION becomes new allotments at NORMAL rates:
  • Fix a threshold level of spectrum that each operator must have for efficiency
  • Existing operators holding spectrum above threshold level may be allowed certain amount of time to raise subscriber levels to reach full utilisation failing which excess spectrum may be withdrawn
  • New operators may be allotted spectrum only up to the threshold level on payment of NORMAL fees
  • Balance spectrum may then be auctioned among all those who hold spectrum up to the threshold level
Chatterjee at the time of writing all this already discussed the matter with the newly inducted Department of Telecommunications (DoT) secretary Siddharth Behura, who was ultimately charge-sheeted and jailed along with Raja.

Interestingly, even while all this is going on, a file noting on January 11, a day after Raja has given away spectrum willfully, says, "PM says that DoT has issued licences today that may be taken into account and the issues accordingly modified and submitted to him please."

Chatterjee's next missive to the PM dated January 15, 2008, says, "It is true that a certain number of operators have already been issued letters of intent (LoI)… they could be considered for allocation of spectrum up to the threshold level once they fulfil all Loi conditions."

All this is post facto after the deed was done by Raja. It is here that a curious turn of events takes place. On January 23, 2008, in yet another damaging file noting, it is said, "PM wants this informally shared with the DoT. He does not want a formal communication and wants PMO to be at arm's length please." Two days later, another noting on the same file adds, "Informally shared with secy DoT. We may keep on file."

Chatterjee saw reason in having an auction but in a tempered manner so that operators and subscribers don't bleed to death and their financial sustainability is not hit. Raja went ahead and did what he intended and the PM, who realised that the horse had bolted, wanted to maintain arm's length knowing fully well (or, at least, his principal secretary knew all along) what was happening. Over to Raja.

Courtesy: Mail Today 

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