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Hardly could anyone have imagined the disquieting effect that an Office Memorandum (OM) prepared by a deputy director-level officer in Finance Ministry would have on the UPA government. <br /><br />The 11-page document on chronology of basic facts related to pricing and allocation of 2G spectrum, dwells on how post-Union Cabinet"s nod, the guidelines for the Unified Access Service (UAS) were issued in Nov, 2003. It also describes how almost six years later, then Telecom Minister A Raja and Finance Minister P Chidambaram acted in unison after having agreed on licence fee and spectrum pricing.<br /><br />The OM, which created ripples  after being presented before the Supreme Court by 2G case petitioner Subramanian Swamy, highlights the positions taken by sectoral regulator Trai and Department of Economic Affairs (DEA) at different times. According to it, Trai in May, 2005 recommended obtaining one-time spectrum charges and annual spectrum charge but the DoT maintained that the spectrum pricing is within its range of normal work, despite the DEA recommending that the matter should be placed before a GoM set up in February, 2006.<br /><br />The document says that the DEA questioned the 2001 licence fee of Rs 1,600 crore being applied in 2007, but DoT took shelter under the Cabinet decision of October 31, 2003 of putting thrust on increasing telephone density.<br /><br />The role of Chidambaram came under the scanner as the note claims he addressed a 'secret note" to the Prime Minister on January 15, 2008 recommending auction of “future allocation of spectrum" while treating  “spectrum allocation made in the past a closed chapter".<br /><br />The note says that the then Finance Minister did not mention any need to revise the entry fee or the rate of the revenue share. It also claims had the then FM wanted, he could have cancelled the licences, avoiding loss to the exchequer. The MoF raised the issue of updating the entry fee albeit only for licences allotted after Jan, 2009, thereby “implicitly" agreeing to the same entry fee as prevailing in 2001  for licences allotted up to Dec 31, 2008.<br /><br /> It says that the DoT could have invoked the clause for modifying the terms and conditions  of UAS licence had the MoF stuck to the stand of auctioning of 4.4 MHz (2G) spectrum. UAS licences were signed between Feb 27 and Mar 07, 2008 and spectrum allocations were made only in April, 2008, four months after the letter of intent was issued. [More]

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