Final Report of Ashok Chawla led Panel did not suggest allocations of Airwaves through Auctions

A government panel, headed by former finance secretary Ashok Chawla, set up to recommend rules for pricing of all natural resources submitted final report. In the final report, the panel did not suggest that all future allocations of airwaves must be through auctions.

The final report merely stated that allocation of spectrum, the airwaves on which all communication signals travel, should be done through a suitable market-related process evolved by the telecoms department and the telecoms regulator.

Analysts are of the opinion that Chawla's move to overturn the draft recommendations amounts to toeing the telecoms department's line which already rejected the auction approach for awarding second generation (2G) airwaves. The telecom department also added that the committee's recommendations will allow the government to choose the benchmark for pricing airwaves.

Telecommunication companies pointed out that the final recommendations of the panel avoided calling for spectrum trading to be permitted, an issue that was prominently emphasised in the draft report. Instead, the final report only states that spectrum trading should be looked into at an appropriate stage.

Currently neither spectrum trading nor sharing is allowed in India. The regulator as well as the government favours spectrum sharing to be permitted in the immediate future, but are against mobile phone companies trading this resource between them. 

Trading/merger/sharing of spectrum should be freely allowed and the existing commodity exchanges or a new dedicated exchange should be entrusted with the responsibility of regulating spectrum trade. In case spectrum, which was allocated at administrative prices, is sold through such mechanisms, a spectrum enhancement charge should be levied on the sale. The exact quantum to be levied would be determined by the telecoms department in consultations with regulator TRAI.

The panel’s draft had also added that if the road map for future release of spectrum through auctions were to be made available, it would temper bids in future auctions.

So far, airwaves for voice telephony (2G) had been given to mobile phone companies based on their customer numbers.