Respite for telecom companies as government opinions stand on SUC dues


The Telecommunications Ministry (DoT) told the Supreme Court on Tuesday that it was reconsidering its decision to appeal against a court order in April 2019 regarding the recovery of one-time spectrum usage charges (SUC) of Rs. 40,000 crore from telecommunications companies.

He asked the court to give the government three weeks to make an “informed decision” whether to continue its appeal against an order from the Telecommunications Dispute Resolution and Appeal Tribunal.

The Supreme Court adjourned the hearing to November 19.

After the Supreme Court overturned the 2G spectrum licenses, the post-2012 DoT sent notices to operators, demanding fees for allocated spectrum as part of administrative pricing. It had two components – one, the retrospective application from July 1, 2008 to December 31, 2012, for any spectrum held above 6.2 MHz; and second, the prospective request from January 1, 2013 until the expiration of spectrum above 4.4 MHz.

The TDSAT, in July 2019, canceled the DoT’s retrospective request. However, it allowed the DoT to collect one-time spectrum charges above 6.2 MHz on a prospective basis.

The DoT appealed the order and, subsequently, the Supreme Court declared the status quo on the claims in December 2020.

READ ALSO: DoT Amends Telecommunications Licensing Standards To Relax Criminal Provisions

The DoT’s decision is significant as it is the government’s first consecutive attempt to clear the backlog of the large number of cases pending before the courts between it and telecommunications companies (telcos), involving a substantial financial impact.

According to sources, the number of cases brought to the Supreme Court is over 200. A DoT assessment in 2018 indicated that the number of cases pending before the Supreme Court and higher courts exceeded 2,800.

They concerned financial demands made by the DoT, disputes over the interpretation of notifications, the law and appeals overturning lower court decisions.

The DoT, in an affidavit to the Supreme Court, said it made the decision in light of the industry’s financial crises. He told the court that the cabinet in September authorized a telecommunications package to ensure the viability of businesses and prevent a monopoly in the sector. He also pointed out that the Association of Indian Banks had signaled to the government that any unfavorable developments in the telecommunications sector could lead to a duopoly, less competition and a negative impact on the banking system, which has a huge impact. exposure to the sector.

KEY ISSUES IN DISPUTE

  • Alleged violation of electromagnetic fields by telecommunications operators
  • Improved microwave fees imposed by DoT
  • Notice of Penalty for Violation of ILD (International Long Distance) Service License Terms
  • Problems Arising from Transfer and Merge Directives
  • Floor price for the use of broadband wireless access spectrum
  • Penalties related to subscriber verification

Officials who worked in the telecommunications department said earlier that no attempt had been made to address the issues through an out-of-court settlement.

Lawyers involved in the cases believe the department’s approach was contradictory.

But former DoT officials who worked during that time said the ministry affected by scams feared any out-of-court settlement would come under scrutiny by the comptroller and auditor general or other government agencies. Departing from its previous position, the DoT is now considering a program similar to “Vivad Se Vishwas”To resolve such cases.

The move, many believe, could be a fundamental shift in addressing this growing contentious issue, said Sameer Chugh, Partner, Cyril Amarchand Mangaldas. Tony Verghese, partner of J Sagar Associates, adds: “Ultimately, the DoT will have to provide the SC with a sufficiently reasonable proposal that supports the public interest and only after satisfaction of said proposal, do I think that? ‘such a proposal will be authorized by the SC. “

The problems came to a head when the Supreme Court ordered telecommunications companies to pay adjusted gross revenues with interest as well as penalties on interest. This decision has practically paralyzed many telecommunications companies because they had to pay around 1000 billion rupees. This is one of the main reasons why the government had to come up with a telecom package aimed mainly at giving businesses more breathing space by giving them a four-year moratorium.

A senior executive at a telecommunications company said: “We do not want such a thing to happen again and we would welcome any initiative to settle the matter out of court.”

The DoT’s decision to reconsider its plan to appeal against the TDSAT order appears to be yet another step in rectifying past anomalies. The telecommunications sector, which has been extremely contentious, will see a decrease in litigation and will pave the way for greater concentration on business.


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