End spectrum hoarding: Penalise non-provision of service

After having participated in the auction for broadband wireless access ( BWA) spectrum and won the spectrum and licence in four circles, Qualcomm now wants to sell these on the condition that whoever buys the spectrum would use its technology TD-LTE, currently still under development. What is wrong with the development is the delay it entails in the rollout of wireless broadband in the circles in question. Ubiquitous, high-speed broadband is a vital input to economic growth, a key infrastructure that, once made available, has the potential to raise the rate of economic growth by at least one percentage point. Wireless broadband is a key component of this needed infrastructure, complementing high-speed fibre-optic cable networks.

After the Supreme Court ruled, in the Reliance gas dispute, that all natural resources belong to the people, with the government acting as custodian on their behalf, it would be a mistake for anyone to treat spectrum, even if allocated via auction, as private property. Squatting on spectrum, instead of putting it to optimal use, is a crime against humanity, given the potential of ubiquitous broadband to accelerate growth, reduce poverty and deliver education, healthcare and entertainment at low cost.

A major drawback of the BWA licences has been that they did not carry with them a rollout obligation or steep penalties for not launching the service. Whether failure to impose such a condition was oversight or a cleverly wangled concession might be worth investigating, along with the manner in which some additional 2G licences were issued. Even now, it is not too late for the government to lay down such a condition. Technology evolution is an ongoing process. The point is to deploy what is currently the best and to migrate to newer technologies when they become viable. What is not permissible is to hold Indians’ access to broadband hostage to commercial interests that hinge on the eventual maturing of a technology under development.

The auction process guards against heavy capital gains from sale of the licences/spectrum, but it would still be right for the government to put in place a special capital gains tax regime for sale of the right to exploit natural assets.