October 01, 2020
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Different Standards

While arguing that the 2G scam did not cause any loss to the nation, the hon'ble minister for telecom did not tell us what he had argued in the High Court in a similar case -- or, indeed, what the High Court had decided

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Different Standards
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Last week one was dumbfounded when Mr Kapil Sabil managed to successfully insult the intelligence of the entire nation while stating that the 2G scam did not cause any loss to the nation. His arguments seemed convincing, though heavily flawed. And one had to be well informed in order to call off the bluff, which sadly the journalist/ TV anchors and editors could not do.

It is the hubris of being a minister and a successful lawyer that gives Sibal the confidence that any drivel he dishes out will be accepted by the masses. And that the TV anchors and editors, including the likes of Rajdeep Sardesai and Karan Thapar, had not done their homework when they had the minister available to them for questioning, did not help matters.  

How honest was Mr Sibal in his arguments can be better appreciated if one goes back to another case where also the issue was the first come first serve (FCFS) system of allotting time slots on satellite channels. Mr Sibal was representing the Hindustan Times in that case and what he argued in the case has been recorded by the Hon’ble Judges of the Delhi High Court in Home Communication Ltd. And Anr. vs Union Of India:

Mr. Sibal said that the principle of 'first come first served' was applicable only in such situations where the recipient of the distribution of the largess was entitled to refuse to deal in the said commodity, and that it applied only to such cases involving the Government and the vendee where the vendee had the absolute right in discretion to deal with the commodity in the manner it liked and the public was entitled not to purchase the said commodity.

He said such a principle was wholly inapplicable to the concept of public broadcasting where the general public had no right not to view the programme. He said if it was an import license the question would have been different and the only affected party would be the competitor, but here it is the general public. Mr. Sibal said that the present scheme was unworkable, and. perhaps, auction could have been a better method. He said between FCFS and Random Number Generation the latter would be still better as everybody would have a chance there.

…..

FCFS could work only if the demands were less and slots were more which was not the case here, so Mr. Sibal put in. Mr. Sibal said that the FCFS method as envisaged will result in. black marketing of time slots by unscrupulous licensees which will be at the cost of the public revenue as well as sufferings of the viewers…..

The policy as it stands promotes trafficking in licenses and fails to address itself to the consequences and the policy to be adopted in the event a particular programme fails

That the FCFS policy was struck down by the Delhi High Court is a fact conveniently forgotten -- or, more correctly, omitted -- by both Mr Sibal and Mr A Raja, though perhaps for different reasons.

Everything that Mr Sibal argued in that case is applicable to the 2G scam now. The difference in the 2G scam now is that the license was indeed given on the first cum first serve principle and that black-marketing did take place at the cost of public revenue.

All that the CAG did was compute the loss in terms of the auction price of the 3G spectrum and the rate at which Swan Telecom and Unitech black-marketed the license. 

Mr Sibal, to be fair, may take the defence that in that case he was arguing for the Hindustan Times (presumably for a hefty fee, amount unknown) and was merely being loyal to his client. 

Which would then beg the question: Is his loyalty to his clients, in this case his party and the government, take precedence over that to the country?

What is the difference in amount between forfeiting the license and collecting the fine? What would five percent of that difference be? 

Mr Sibal would like us to believe that the exchequer benefited by 110 crores because he believes that spectrum is for free. However, if the lowest of the black marketing figure is used to calculate the loss then the exchequer is poorer by 50,000 crores. Even if  we take just one third of the going rate of 15% -- as the Radia tapes revealed  -- the amount at stake still works out to a tidy sum of Rs 2500 crores (5% of Rs 50,000 crores).

Is that the reason why he is allowing all the license holders to pay a miniscule fine for not complying with the roll out norms instead of forfeiting the license and re-auctioning them?

One is indeed sorry to see brilliant lawyers using their skills to further corporate interest and not public interest that they are sworn to uphold as a minister.

Other arguments of Mr Sibal -- that the spectrum came for free etcetera -- have not been addressed. It was the license that was being sold and the license fee that was being paid for. Spectrum came with the license and therefore it was the license that had to be auctioned. The CAG has dealt at length on the issue of separating the license from the spectrum. 


A.K. Agrawal is the author of Reliance the Real Natwar


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