The DoT is of the view that it won’t be feasible to directly allot spectrum to enterprises for private networks under the present legal framework, according to officials aware of the details.
This is in line with the attorney general R Venkataramani’s advice backing auctions, which ET had reported March 18. Telcos have also been lobbying against direct allocation of 5G spectrum to companies.
“If an enterprise wants to roll out captive network, it can be done utilising the options already notified by DoT, including leasing spectrum from telecom operators,” an official told ET. The DoT will soon inform the cabinet and the Telecom Regulatory Authority of India (Trai) about its decision, officials said.
This contradicts the initial guidelines on private networks released by the DoT last year.
Those said that enterprises wanting to set up their own captive networks can lease 5G spectrum from telecom operators or get it directly from the DoT. They could also ask telecom operators to roll out their private networks.
Faced with the opposition of telcos, the DoT sought the attorney general’s (AG’s) view. He said that auctions are the preferred mode of allotting natural resources such as spectrum. Citing the 2G scam, the government’s top law officer had urged against the administrative allocation of spectrum.
“The AG has said this keeping in mind the principle that any community resource, in all circumstances, should be allocated in a manner that may fetch the best return possible and (so) the allocation of the resource through the auction process is found desirable,” said one of the officials.
Venkataramani had also said that while the government can take a stand on the classification of spectrum and contend that a particular bandwidth does not need to be auctioned, questions could be raised at a later stage, as happened in the 2G case.
That prompted the DoT to rethink the direct allocation option. “In the case of administrative allocation, when there are more players, the first criterion which comes to mind is first-come-first-served, but the same was denounced by the Supreme Court,” said a second DoT official, referring to the 2G case.
The official added that DoT may intervene in future if the demand for private networks is not met through the available options, including leasing of spectrum.