Decoding war over satellite spectrum

It shouldn’t come as a surprise that India is headed for non-auction of the spectrum for satellite-based communication services – instead of auction. Telecom minister Jyotiraditya Scindia made that clear on October 15, 2024, when he said, the spectrum “will be allocated administratively in line with Indian laws”, adding: “If you do decide to auction it, then you will be doing something which is different from the rest of the world”.

By “Indian law” Scindia meant the Telecommunications Act of 2023 and “the rest of the world” was a reference to the International Telecommunication Union (ITU) – an UN agency for facilitating international connectivity in communication networks (both of which are explained later).

India has been auctioning spectrum since the Supreme Court’s 2G verdict in 2012– which mandated it for all allocations of “natural resources”, having declared “administrative” allocation (non-auction) or first-come-first-served (FCFS) basis as “wholly arbitrary and unconstitutional”. The last such auction was held during June 25-26, 2024 in which both Mukesh Ambani’s Reliance Jio and Sunil Mittal’s Airtel successfully bid for the spectrum.

But those spectrum auctions were for terrestrial or tower-based communications – not satellite-based services. Both the Indian billionaires are in the race for launching satellite-based services – through the Reliance Jio Satellite and Airtel-controlled OneWeb India. Elon Musk’s Starlink is a major contender. Other firms may join the race, like Amazon’s Kuiper.

When satellite spectrum is finally assigned (non-auction), it would be a first and mark the entry of private commercial players to the area. In November 2021, AatmaNirbhar Bharat mission had announced opening the space sector to private players.So far, India assigns satellite spectrum to public sector entities for public purposes like weather forecasting and defence.

How and when non-auction became alternative?

India first brought in non-auction with the National Digital Communications Policy (NDCP) of 2018.

Para 1.3C of it says, the objective is to (a) “develop an ecosystem for satellite communications” with focus on “streamlining administrative processes for assignment and allocations, clearances and permissions related to satellite communication systems” (b) “further liberalising the spectrum sharing, leasing and trading regime” and (c) “enabling light touch licensing/de-licensing of spectrum for broadband proliferation”. But it doesn’t explain “spectrum sharing” and “light touch licensing”.

Words and phrases like “auction”, “bidding” or “competitive bidding” are missing.

Then came the Telecommunications Act of December 2023 – giving non-auction a legal leg.

This law says, “spectrum will be allocated through auction” but with a long list of “except for” in which “administrative process” or FCFS would be followed. This is for three reasons: “(i) serve public interest (ii) perform government function (iii) in cases “where auction of spectrum is not the preferred mode of assignment due to technical or economic reasons”.

The exempted list has 19 “specified entities and purposes”; number 16 of which mentions “certain satellite-based services”.

After the law was passed, the DoT, first in December 2023 and then in April 2024, moved the Supreme Court – seeking clarification whether it could assign spectrum through “administrative process”. The court’s registry refused to admit the plea on May 1, 2024, pointing out that the application was, in effect, seeking “review” of the 2012 judgement after 12 years “in the guise of…clarifications” and termed it “misconceived” since it didn’t disclose “any reasonable cause”.

It is important to note here that after the 2G verdict, then UPA government had sent a Presidential Reference to the apex court – asking if “auction” was the only “permissible method” for spectrum allocation. A constitutional bench (then CJI SH Kapadia and Justices DK Jain, JS Khehar, Dipak Misra and Rajan Gogoi) said, on September 27, 2012, auction was not the only mean/method but adoption of any “other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 of the Constitution”. The court kept the door open for “judicial scrutiny”, depending “on the facts and circumstances of each case”.

Thus, non-auction of satellite spectrum would have to pass the test of arbitrariness.

Meanwhile, a few other developments had also taken place – which are key to understand the developments.

Musk’s Starlink checks in

·    On June 22, 2023, reports revealed: “Following a meeting with Indian Prime Minister Narendra Modi in the U.S…., Musk said he was keen to launch Starlink in India which “can be incredibly helpful” in remote villages that have no internet or lack high-speed services.” At that stage also, the report said, Musk was facing “strong resistance”.

·    Six months later, on December 18, 2023, MeitY introduced the Telecommunications Bill of 2023 proposing “administrative” allocation for satellite spectrum, among others.

·    The same day, December 18, 2023, another report claimed: “India to allot satellite internet airwaves without auction in win for Musk”. It said, Musk's Starlink “has lobbied hard against any auctions” and that “the foreign firms” had been opposing auction “concerned that an auction by India unlike elsewhere will raise the likelihood of other nations following suit, increasing costs and investments”. It named two “foreign firms” in this context – Amazon's Project Kuiper and the UK-backed OneWeb (linked to Airtel’s OneWeb India).

·    On December 20, 2023 – two days later – the Bill was passed by the Lok Sabha and by the Rajya Sabha the next day. The law was notified on December 24, 2023.

·    On April 16, 2024, days before Musk was to meet the Prime Minister, his Starlink received the DoT’s ‘in-principle’ approval for satellite communication services; Musk cancelled his India trip and went to China instead.The Reliance Jio Satellite and OneWeb India had already received all-India commercial licenses (GMPCS) from the DoT in March 2022 and August 2021, respectively.

Things moved fast in September and October 2024.

·    On September 27, 2024, the TRAI circulated a fresh “consultation paper” seeking telecom industry’s views on pricing and other aspects for “administrative allocation” of satellite spectrum (more about it later).

·    A report said Reliance Jio had written to the TRAI on October 4, 2024 seeking a revision in the TRAI’s consultation paper – which talked about non-auction. It also said, the members of Broadband India Forum (BIF) – Amazon, Microsoft, OneWeb, Samsung, TCS, BSNL and Ericsson – opposed the Reliance Jio (Satellite) move. 

·    A few days later, on October 14, 2024, another report said, Reliance Jio Satellite had also written to Scindia – sparking Musk’s response on ‘X’ on the same day and Scindia’s response the next day (both mentioned earlier).

·    On October 15, 2024, Airtel-controlled OneWeb India (major investor in the UK-backed OneWebmentioned earlier) changed its position to support auctioning.

Until then, it had supported non-auction.

A day after Scindia’s response settled the matter on October 15, 2024, Musk welcomed Scindia on ‘X’ (October 16, 2024): “Much appreciated! We will do our best to serve the people of India with Starlink.”

ITU’s entry

Until Scindia said auctioning would be “different from the rest of the world” on October 15, 2024, none – the NDCP of 208, Telecommunications Bill of 2023 (“notes on clauses”), DoT’s numerous letters to the TRAI and the TRAI’s three “consultation papers” or its “recommendations” of April 2024 – had cited the ITU to justify non-auction or sharing of spectrum.

Not even Scindia mentioned the ITU. But the sequence of events suggests he meant the ITU since Musk had mentioned it a day earlier on the ‘X’ (in response to the Reliance Jio Satellite’s objections): “That would be unprecedented, as this spectrum was long designated by the ITU as shared spectrum for satellites.”

The ITU does talk about allocation and “types of allocation that exists”) of radio frequencies (satellite spectrum): (a) exclusive allocations to “a single radiocommunication service” and (b) shared frequency allocations “to two or more radiocommunication services”.

But the FAQs don’t talk about means/methods of such allocations (auction or non-auction) – which is to be expected. The ITU’s radio regulations (ITU-RR)is a restricted document, not available for public. None (of Musk, Scindia, the DoT, TRAI or any other official document) mention which rule of the ITU-RR says that satellite spectrum can’t be auctioned.

Globally, most countries prefer non-auction but auction is not unheard of, (i) Brazil auctioned satellite landing rights but no separate auction for spectrum after 2020 and (ii) Saudi Arabia recently auctioned its spectrum for mobile satellite services (MSS).

TRAI endorses non-auction

DoT had engaged the TRAI for allocation of satellite spectrum since 2021, asking for its recommendations and providing telecom industry’s views. Its initial communications (detailed in the TRAI’s documents) mentioned “auction” of satellite spectrum “on exclusive basis” and “shared basis”. “Auction” went missing after the Telecommunications Act of 2023.

In all, the TRAI released three “consultation paper” (April 6, 2023, September 27, 2023 and September 2024) – all post-Telecommunications Act of 2023 – as the DoT kept adding new elements. 

It also released its recommendation on April 24, 2024 which said, telecom service licensees should be “allowed to share” – either by “pooling of access spectrum” in different frequency bands or by “allowing the partnering access service providers to use the radio access networks of each other operating in the shared frequency band(s)”. DoT’s references related to various other aspects too – like the frequency bands and quantum to be allocated/assigned, pricing mechanisms etc.

Musk’s Starlink is a major global player in satellite communications with “thousands of operational satellites”; the protests against non-auction of the spectrum poses potential risks to Indian players.