Voice Consumer Care Council v. The Union of India

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 04.12.2009CORAMTHE HONOURABLE MR. JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR. JUSTICE N.KIRUBAKARANW.P. NO.30880 OF 2008ANDM.P. NO. 1 OF 2008VOICE Consumer Care Councilrep. by its TrusteeNo.19, Crescent AvenueK.P.Puram, Chennai – 28... Petitioner- Vs -1. The Union of India Thro' Ministry of Communications & Information Technology Department of Telecommunications Sanchar Bhavan, Ashoka Road New Delhi 110 001.2. Telecom Regulatory Authority of India Thro' its Director General Doorsanchar Bhavan Jawahar Lal Nehru Marg New Delhi 110 002... RespondentsWrit Petition filed for the issuance of a writ of declarationdeclaring the detailed guidelines for auction and allotment ofSpectrum for Broadband Wireless Access dated 01.08.2008 and theconsequential amendment dated 11.09.2008 and the memorandum relatingto auction of BWA Spectrum dated 12th Dec., 2008, insofar as itrelates to pure internet services is concerned are opposed toBroadband Policy 2004 of the Government of India and the fundamentalright to access to information guaranteed under Article 19 (1) (a) ofthe Constitution of India.For Petitioner: Mr. K.M.Vijayan, SC for M/s.LA LawFor Respondents: Ms. V.Yamuna DeviORDERS.J.MUKHOPADHAYA, J.The writ petition has been filed by the petitioner fordeclaration that the detailed guidelines for auction and allotment ofspectrum for Broadband Wireless Access (hereinafter referred to as'BWA') dated 1st Aug., 2008, and consequential amendment dated 11th https://hcservices.ecourts.gov.in/hcservices/ Sept., 2008 and memorandum relating to auction of BWA spectrum dated12th Dec., 2008, insofar as it relates to pure Internet service areopposed to Broadband Policy, 2004 of the Government of India and thefundamental right to access to information guaranteed under Article19 (1) (a) of the Constitution of India.2. The petitioner claims to be a voluntary organisation taking upgenuine public causes for public service. It has challenged theguideline in relation to auctioning the spectrum for BWA on theground that it goes against the policy of the Government of India inrelation to pure internet service. The access to internet service,particularly for IT potential of India is in millions and, therefore,according to the petitioner, the present cause is a public cause ofgreater importance, which has a direct bearing on the growth of GDPand enhancing quality of life, including tele-education, tele-medical, e-governance, entertainment, employment generation by way ofhigh speed access to information and web based communication.Further case of the petitioner is that the internet services asprovided by the guidelines of Government of India is an exclusivepolicy under Broadband Policy 2004, and is binding on the Government.Internet services is a matter of public policy to provide cheap andcost effective internet service to general public. At presentinternet services are pre-dominantly by wire line service alone.Now, due to development in information technology, wireless broadbandaccess is also sought to be implemented. The policy relating towireless internet service was considered to be not within the purviewof licensing in order to enable cost-effective access to theconsumer. For the said reason, Government of India, in Para 4.4 ofits Broadband policy has specifically come out with a plan, wherein“the department is conscious of the fact that broadband services canreach the urban and rural consumers only if services are offered ataffordable and easy terms. Department of Telecommunications willwork out a package in consultation with Ministry of Finance andrelated departments as well as concerned service providers to achievethis”. The above object of the Government of India is alsoestablished in the subsequent guideline issued exclusively for thepurpose of internet connections on 24th Aug., 2007, wherein at para 10of the said notification, which relates to Annual Fee License, it hasbeen specifically excluded for pure internet service providers indeciding the Adjusted Gross Revenue (AGR) index. That means, thelicense fee at present charged for pure internet providers arenegligible, which is a nominal Rs.1/= license fee alone. This was inconsonance with the Broadband Policy 2004 allowing cheap access toconsumers of pure internet service. In the Common Information Memorandum issued for auction of 3G andBWA Spectrum, in para 3.1 relating to Broadband Policy states that“the Government acknowledges the coverage of broadband services inthe country has been limited so far due to infrastructure and otherconstraints and is committed to improve that. Promotion of wirelessbroadband service, a step in the direction and the Governmentbelieves that it will be able to achieve the broadband policy targetof 20 million subscribers by 2010”. Learned counsel for the petitioner referred to para 6.1 relating https://hcservices.ecourts.gov.in/hcservices/ to Government's vision, wherein the objectives are spelt out, asbelow :-i) Access to telecommunication is of utmostimportance for achievement of the country's social andeconomic goals. Availability of affordable andeffective communications for the citizens is at thecore of vision and the goal of the telecom policy.ii) Strive to provide balance between the provisionof universal service to all uncovered areas and ruralareas.iii) Encourage development of telecommunicationfacilities in remote, hilly and tribal areas of thecountry.However, in para 6.2 relating to objectives of the auction, it isstipulated that “maximising the revenue proceeds from auction”.3. Learned senior counsel for the petitioner submitted that thepolicy relating to accessibility of service in para 6.1 and auctionnorms in para 6.2 are ironically contradicting each other. To put itotherwise, the Government is not trying to keep its goal in itsadministration and taking double standard in its policy relating tointernet service and in its bid process relating to auction. Eventhe recommendation of the 2nd respondent, Telecom Regulatory Authorityof India, in para 1.12 (i) of the recommendation dated 27th Sept.,2006, has stated that the objective of maximisation of consumerinterest. This will involve supporting and encouraging thediffusion of new and advanced technologies, setting the frameworkthat ensures affordability and universal access to the newcommunication techniques. Therefore, according to the petitioner,the internet service is considered as a class separate with the ideaof providing cost effective internet service in tune with thefundamental right of freedom of expression, which includes access toinformation. Due to under classification of internet service as aseparate class, the policy relating to internet service is notconsidered as a commercial venture by the Government. Both thepolicy and the subsequent guidelines relating to internet service arenot burdened with heavy license fee or put to auction in respect ofBWA. The policy of the Government of India by bringing in auctioncoupling with internet service along with 3G service had proposed toauction internet service as pure and separate with no license feeand, therefore, reserve price, which is 50% of the 3G reserve priceis disproportionate and has no nexus with the object sought to beachieved.4. So far as the current auction is concerned, it is submittedthat the amendment made on 11th Sept., 2008, notified a minimumreserve price for the internet service under Group A, B and Ccategories @ Rs.80 Crores, Rs.40 Crores and Rs.15 Croresrespectively, if auctioned, may even go double the amount fixed asreserve price. It would obviously be impossible to increase thepenetration of BWA given the failure of the Government to achievebroadband penetration targets despite charging only nominal licensefee for pure internet service. Compared to the present cost of pure https://hcservices.ecourts.gov.in/hcservices/ internet service, which is affordable and relatively accessible tothe consumers, if internet service under BWA is auctioned, that willincrease the cost of consumers in getting such service. In thishour, instead of making arrangement to reduce the price of broadbandconnections, it is alleged that the 1st respondent is trying toauction the broadband spectrum along with 3G spectrum, whereby theprice of broadband connection will rise by manifolds as far asconsumers are concerned. In this right to information age, theguidelines have the ability of keeping the common man away frominformation.5. Learned counsel for the petitioner highlighted the Pre NewTelecom Policy, 1999 period when the Government had analysed andfound that when the initial cost were more in mobile technologyspectrum, the penetration was lesser due to more cost either by wayof fee or by way of auction. The Government had to ratify its policyin order to achieve an affordable, accessible and further penetrationof spectrum and had to come down on its cost of allotting spectrum.Therefore, according to the petitioner, the conduct of the Governmentin the past would substantiate that even in the case of BWA auction,on the present cost will not achieve the accessibility andpenetration as contemplated by the Government. Learned counsel forthe petitioner further submitted that the approximate logisticsworked out by the petitioner from the available resources, totalauction of BWA spectrum would come to Rs.2200 Crores against thereserve price of Rs.1100 Crores. Taking into account 15 years timewithin which service have to be provided on an average use, for asubscriber that would not be less than Rs.200 to Rs.250 per month inaccessing the internet service in the BWA scheme. The cost ofaccessing BWA will become 50 to 60% more than the present internetservice due to auctioning the pure internet service by the impugnedguidelines, which will have to necessarily include the cost of aroundRs.2200 Crores, as the basic cost of licence by the internetproviders in addition to their charges. Therefore, having declaredever since 1999 upto 2004 in respect of broadband internet service,the object being to provide efficient, cost effective and consumerfriendly service as the basis and having made the licence fee asalmost nil (Rs.1 only) to auction BWA for pure internet service wouldgo against the very object and purpose of internet service, which isa right to access information guaranteed under the Constitution ofIndia.6. Learned counsel for the petitioner referred to Supreme Courtdecision in Union of India – Vs – Cynamide India Ltd. 1987 (2) SCC720 wherein the Supreme Court held that the interest of consumers hasto be paramount. It was further submitted that the Supreme Court innumerous decisions has held that the freedom of expression includesaccess to information.7. Learned counsel for the respondents – Union of India, opposedthe writ petition broadly on the following grounds :-a) The writ petition cannot be held to be a petition in publicinterest; https://hcservices.ecourts.gov.in/hcservices/ b) If the prayer is allowed, it will help the private commercialproviders to charge any amount;c) If there is more competition amongst private commercialproviders, the price will come down, which is in public interest; and d) Broadband Policy, 2004 having not yet been notified, thepetitioner cannot claim the proposed auction violative of such policy.8. We have heard the learned counsel for the parties and perusedthe record.9. From the proposed Broadband Policy, 2004, which has not yetbeen given effect, it will be evident that the Government recognisedthe potential of ubiquitous broadband service in the growth of GDPand enhancement in quality of life through societal application,including tele-education, tele-medicine, e-governance, entertainmentas well as employment generation by way of high speed access toinformation and web based communication. Therefore, it is evidentthat the Broadband Policy is in public interest. From the saidproposed Broadband Policy, 2004, it will be further evident that thedemand for broadband policy is primarily conditioned and driven byInternet and PC penetration. It is recognised that the current levelof internet and broadband access in the country is low as compared tomany Asian countries. The penetration of broadband, internet andpersonal computers in the country was 0.02%, 0.4% and 0.8%respectively at the end of December, 2003. Currently, high speedinternet access is available at various speeds from 64 kilobits persecond (kbps) onwards and presently an 'always-on high speed Internetaccess' at 128 kbps is considered as 'Broadband'. Thus, it isevident that there is no uniform standards of broadband connectivityand various countries follow various standards. It is admitted thatthe proposed Broadband Policy, 2004, has not yet been given effect.10. In the existing Telecom Policy of 1999, objectives have beenshown as follows :-“New Telecom Policy, 1999The following are the objectives of the New TelecomPolicy, adopted in 1999 :-•Access to telecommunications is of utmostimportance for achievement of the country's socialand economic goals. Availability of affordable andeffective communications for the citizens is at thecore of the vision and goal of the telecom policy;•Strive to provide a balance between the provisionof universal service to all uncovered areas,including the rural areas, and the provision ofhigh-level services capable of meeting the needs ofthe country's economy;•Encourage development of telecommunicationsfacilities in remote, hilly and tribal areas of thecountry;•Create a modern and efficient telecommunicationsinfrastructure taking into account the convergenceof IT, media, telecom and consumer electronics and https://hcservices.ecourts.gov.in/hcservices/ thereby propel India into becoming an ITsuperpower;•Convert Public Calls Offices wherever justified,into Public Teleinfo centres having multimediacapability like ISDN services, remote databaseaccess, Government and community informationsystems, etc.;•Transform in a time bound manner, thetelecommunications sector to a greater competitiveenvironment in both urban and rural areas providingequal opportunities and level playing field for allplayers;•Strengthen research and development efforts in thecountry and provide an impetus to build world-classmanufacturing capabilities;•Achieve efficiency and transparency in spectrummanagement;•Protect the defence and security interests of thecountry;•Enable Indian telecom companies to become trulyglobal players.”11. From DoT's annual report for the year ended March, 2008, itappears that the Dot identified certain priorities with definiteobjective, such as --(i) To achieve rural tele-density of 25% (around 200 millionrural connections) by end of the 11th Plan period (March, 2002) as 70%of the population lives in villages and telecom development in ruralareas assumes special significance.ii) The Government is working steadily towards addressing theissue of realising additional spectrum from Government use for use ofcommercial telecom operators so that the growth of the dynamic sectoris not constrained by the shortage of spectrum. The Govenrment alsorecognise the need to take a forward looking approach based onappreciation of the changing technologies and to acceleratestructural changes in this sector in line with trends in othercountries to ensure that telecommunications services are not onlymade available on the scale needed to sustain rapid growth in theeconomy as a whole, but also the quality and cost of these servicescome upto the requirements of a modernizing economy.iii) Recognizing the potential of Broadband services in thegrowth process, as proposed in the 11th Plan targets to provideBroadband for all secondary and higher secondary schools, all PublicHealth Care centres and Gram Panchayats. It is also visualised tolink Block Headquarters and nearest exchange through State Wide AreaNetwork (SWAN) connectivity. It is also envisaged to increase thethat internet and Boradband subscribers to 40 million and 20 millionrespectively by 2010.12. In the auction of 3G and BWA spectrum, the objective ofauction has been clearly mentioned as quoted hereunder :-“6.2 Objectives of the AuctionsThe Government has set itself the following https://hcservices.ecourts.gov.in/hcservices/ objectives from the Auctions :•Maximise revenue proceeds from the Auctions;•Ensure efficient use of spectrum and avoidhoarding;•Stimulate competition in the sector, promoterollout of 3G and Broadband services and helpresolve 3G congestion issues;•Conduct the Auctions in a timely andtransparent manner.The Government reserves the right to cancel orpostpone the Auctions, in part or in full in order tosafeguard the above objectives. The Government hasthe sole discretion to determine the relative priorityof the objectives and whether the objectives areadequately safeguarded by the Auctions.”The said auction of 3G and BWA spectrum has also taken care ofmobile number potability, mobile virtual network operator, merger andacquisitions, infrastructure sharing, public safety standards, etc.13. The question of what should be the effective cost forproviding one or other service can be decided by a body of expertsand not by a Court of law, which has no such expertise. It will beevident that the price increment quality for a service area was foundto be capped at Rs.2.5 crore times the number of eligibility pointsfor one lot in the service area. Taking into consideration themaximum absolute price increments for each category, the matter wassummarised as follows :-Service Area TypeMaximum price increment perround(Rs. Crores)Delhi, Mumbai & Category A40Kolkata & Category B20Category C7.5The aforesaid price was amended on 11th Sept., 2008.14. The respondents have taken specific plea that theGovernment's National Telecom Policy, 1999 has not been given a go-by. Therefore, the persons who are deriving advantage of the samewill not be deprived if auction of 3G and BWA spectrum is held by therespondents. The Court finds no contradiction between the guidelinesof the Government of India in respect of auctioning of the spectrumfor Broadband Wireless Access (BWA) and policy of the Government ofIndia, 1999 in relation to pure internet service. Apart from the fact that the auction has already taken place, theCourt also tried to find out as to how it will affect the common man,who are already getting all information through internet as per the1999 policy. The proposed Broadband Policy, 2004, cannot be reliedupon to claim any right till it is given effect by the 1st respondent.The 1st respondent has taken specific plea that the Government is ofthe view that the market will decide the cost of BWA of the consumer, https://hcservices.ecourts.gov.in/hcservices/ if spectrum auction of BWA of four operators are made that willcreate competition amongst them in order to provide BWA service atcheaper and competitive rates. Such submission cannot be ignored asin view of past experience that whenever a competition is createdwith regard to internet service or any other service relating toinformation technology, due to creation of such competition, the costof service has always come down. Telecom Policy, particularly withregard to mobile service is a glaring example, wherein initially theservice providers used to charge high cost, but in view of subsequentcreation of competition amongst them, the cost has substantially comedown and is at such cheaper and competitive rate that even the commonman can afford the same.15. Apart from the aforesaid finding on merit, as we find that inthis case the Government Policy is not under challenge, but anauction notice issued by the respondents, we are of the view thatthis case cannot be termed to be a writ petition in public interest.In absence of any merit, the writ petition fails and it isaccordingly dismissed. Consequently, connected miscellaneouspetition is also dismissed. But there shall be no order as to costs.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarGLNTo1. The Secretary to Government Government of India Ministry of Communications & Information Technology Department of Telecommunications Sanchar Bhavan, Ashoka Road New Delhi 110 001.2. The Director General Telecom Regulatory Authority of India Doorsanchar Bhavan Jawahar Lal Nehru Marg New Delhi 110 002.1 cc To Mr.La Law, Advocate, SR.660591 cc To M/s.Yamunadevi, Advocate, SR.66388KS (CO) ORDER IN W.P. NO. SS (11.12.2009)30880 OF 2008