| |
COVER STORY: GOVERNMENT
The TeleScam
By Prabhu Chawla and Rohit Saran
For all the praise
showered on him for keeping his nerve and persevering with economic reforms,
Finance Minister Yashwant Sinha might as well be redesignated the minister
for fire-fighting. Even before he finished the daunting tasks of dousing
the fears of price rigging on the stock markets and fire walling his Budget
2001 from the political fallout of the Tehelka episode, he has been entrusted
with another awesome and unenviable job. The task of extricating the Government
from a decision that is legally questionable, politically explosive and
economically irrational.
|
THE CONTROVERSIAL CHANGES WERE INITIATED BY THE PMO
THE REGULATOR WAS TOLD TO REITERATE A PMO DECISION
THE PMO EVEN DISREGARDED VAJPAYEE'S OWN INSTRUCTIONS
|
|
As head of the 10-member Group on Telecom and
it Convergence (got-it)-a body that includes Cabinet colleagues like Pramod
Mahajan, Arun Jaitley and Sushma Swaraj, and notables like lawyer Fali
S. Nariman and Central Vigilance Commissioner N. Vittal-Sinha has to find
an acceptable way of repackaging the Ministry of Telecommunications' decision
to modify the 1999 National Telecom Policy (NTP). The change allowed basic
telecom operators to start limited-mobility phone services in their area
of operation using Wireless in Local Loop (WiLL). In plain words, basic-telecom
operators have been given the go-ahead to provide their customers de facto
cellular services and, consequently, poach on the turf reserved for cellular
operators. "These changes," wrote Tata Industries chief Ratan
Tata, with characteristic understatement, to the prime minister last December,
"would constitute a significant deviation from the NTP."
|
|
|
| |
Paswan (left) added his touch to the decisions
of Mishra (right) and Singh
|
| |
The Minister
THE CLAIM
"The new WiLL technology will give
the poor people
of India access to telephones."
Paswan in a TV interview,
April 13, 2001
THE TRUTH
With an entry cost of Rs 15,000, limited mobility isn't really for
the poor.
The PMO Team
THE CLAIM
"The suggestion that the Telecom Policy
has been changed at the behest of the PMO is not correct."
Press note issued by PMO, March 19, 2001
THE TRUTH
"... endorsing the consensus
on October 11 for encouragement to WiLL, TRAI may be requested to
expedite finalisation ..."
Record of meeting in PMO,
November 6, 2000
|
Despite the appointment of got-it-itself an admission
that something rotten has taken place-the telecom controversy has already
raised the hackles of political parties and legal experts and triggered
a no holds barred corporate battle involving the biggest names in Indian
industry. At stake is a honey-pot worth between Rs 9,000 crore and Rs
13,000 crore, the estimated value of the spectrum (loosely defined as
sound waves) the Government is offering to the fixed-phone companies.
Cellular companies, having paid more than Rs 7,000 crore for spectrum
and other fees, don't want anybody to walk away with the largesse. It
is another matter though that they cut their deal in July 1999 when the
Government freed them from the ridiculously high licence fees and moved
to revenue sharing. Since then the industry has only grown and so have
the stakes. Telecom is now a Rs 13,000-crore business. A series of mergers
and buy-outs have left only six private players in the fixed-phone business.
The cellular club is much larger, with some players also having fixed-phone
licences.
In indirect terms, the policy change is also
expected to reduce the net worth of public-sector telecom companies Bharat
Sanchar Nigam Limited (BSNL) and Videsh Sanchar Nigam Limited (VSNL),
both of which are candidates for privatisation. No wonder some opposition
leaders have been quick to allege a scandal of monumental proportions.
Congress MP Priya Ranjan Dasmunsi even quantified it as a Rs 13,000-crore
scam. "Limited mobility is being allowed for mobilisation of unlimited
resources for a party formed in a limited period," he says, in a
thinly veiled attack on Telecommunications Minister Ram Vilas Paswan.
The indignant opposition members have been joined
by NDA constituents like the Shiv Sena who have pointed an accusing finger
at the Prime Minister's Office (PMO). In a letter to Prime Minister Atal
Bihari Vajpayee earlier this month, Shiv Sena chief Bal Thackeray argued
that "the credibility of the NDA and its Government will be seriously
impacted by this hasty and non-transparent decision by the Department
of Telecommunication (DoT). Our Government is already under attack for
various questionable decisions taken by the PMO troika".
The WiLL controversy is fierce and, depending
on positions taken, Sinha's task is both challenging and easy. Easy because
got-it is only supposed to provide a fig-leaf of respectability to a predetermined
Government decision which isn't in conformity with the NTP and defies
the licensing agreement signed with the fixed-phone services providers
in 1995. The absurdity of involving got-it is evident from the fine print
of its terms of reference issued on April 7, 2001. The group's brief is
to find if the NTP permits "limited mobility" by fixed-phone
companies. If it does, then how best should the service be introduced;
and if it does not, then how can the policy be modified to introduce limited
mobility.
The terms are outright scandalous. If the Government
is not yet sure whether limited mobility conforms to its own telecom policy,
how has the Telecommunications Ministry allowed such services to be operational?
Why has Paswan been brazen enough to suggest that the new policy will
stay, come what may? Should a decision follow policies or policies be
tailored to suit a decision?
The public-sector BSNL and Tata Teleservices
are already offering limited-mobility services in Gurgaon and Hyderabad.
DoT has also issued letters of intent (LOIS) for limited mobility to Reliance
Telecom in 18 states, Tata Teleservices in 15 states and Himachal Futuristic
Communications Ltd (HFCL) in seven states. Says Justice S.S. Sodhi, former
chairman of the Telecom Regulatory Authority of India (TRAI): "The
Government knowingly took a decision contrary to its own policy. When
confronted with it, the Government is now seeking ways to amend its policy
to make it conform to the decision taken." (see column). Adds CPI(M)
leader Somnath Chatterjee, who is the chairman of the parliamentary Standing
Committee on Communications: "The limited mobility may be good, but
the way the Government has introduced it is not."
That's putting it mildly. An examination of
the decision-making process that led to the WiLL furore suggests that
the Government's own policy was willfully subverted in a planned manner.
The subversion was conceived and initiated in the PMO and was then taken
up and executed in the Telecom Ministry with the regulatory body TRAI
assisting the process.
In June 1999, TRAI, then headed by Sodhi, had
expressed its reservations on permitting limited mobility. In a letter
to DoT on June 9, 1999, the then TRAI secretary Narendra Sharma (now MTNL
chairman) had said: "There is no mention whatsoever of permission
to provide limited mobility in the NTP 1999... Pending the examination
of all the relevant issues in this regard, the commercial introduction
of the proposed service by the MTNL/DoT may be held in abeyance."
After months of wrangling with the Government on this and other issues,
TRAI was disbanded on January 19 last year and a new, weaker TRAI was
appointed on January 28. Stripped of its judicial powers, which were vested
in a new Telecom Dispute Settlement and Appellate Tribunal (TDSAT), the
new and more pliable TRAI was constituted with former State Bank of India
chairman M.S. Verma as its head. Verma was allowed to stay on as chairman
of IDBI Bank. In retrospect, the reconstitution of the regulatory body
was central to a much larger plan involving the redefinition of basic-telecom
services.
|
|
METRO TODAY
Web
Exclusives