The Supreme Court on Tuesday admitted the government’s appeal against the telecom tribunal’s order that asked it to retain parity among Unified Licence Internet Service Providers (ISPs) and old licensees on licence charge problem. A Bench led by Justice DY Chandrachud whilst posting the matter for final disposal in April stayed the refund of licence charge to some ISPs in pursuance of TDSAT order. The TDSAT on October 28, 2019, whilst setting aside the licence charge altogether had ordered that the UL-ISP shall be assessed in the very same way as the ISPs holding licences beneath the old regime.
It stated it was unfair to waive costs for old licensees for net service ie. not requiring them to spend Adjusted Gross Revenue at 8% (till the time the old licences survive), whilst requiring the very same to be accomplished for new licences. The tribunal additional held that the requirement to seek the advice of the Trai was essential and the reality that the regulator at the relevant time in 2012 did not particularly advocate inclusion of net service in the scope of AGR, the central government was restrained from which includes net services in the AGR.
The government, in its appeal just before the top rated court, claimed that, “the telecom service providers have effectively succeeded at approbating and reprobating by enjoying the benefits of the new unified regime and paying for the old regime. This is apart from being a lavish waste of the spectrum resources (when internet services have become highly lucrative), results in an unfair position and a revenue loss of over Rs 4,000 crore to the exchequer.”
Denying there getting “two regimes”, Solicitor General Tushar Mehta told the Bench, “the decision (tribunal) merely results in a change in policy. There are no ‘dual regulations’ or any sort of classification resulting in any arbitrariness. In fact, in order to maintain parity, and in order to not trample upon the vested right under the old licences wherein the entrants entered the contracts on the ground that no licence fee would be changed for internet services, the mechanism of a graded implementation was adopted.”
Mehta stated as per the impugned policy, all new contracts would be 8% AGR, which includes net services and all old licences, as and when they expired, would have to automatically shift to the new regime. “The entire debate on “new regime” and “old regime” is merely a device to not spend the requisite dues while taking the benefit of modify in policy,” the government stated.
In 2006, the licence charge was charged on income share basis. Then the income earned from “pure internet services” was to be excluded from gross income to arrive at AGR. This changed in 2013 when even pure ISPs had to spend a percentage of their income as licence charge. The DoT’s circular of June 29, 2012, for enhancing the licence charge prices from 6% to 8% was quashed by the TDSAT in October 2012 on the grounds that the division could not have taken such a selection provisionally without the need of following due process beneath the Trai Act. Later, when the UL regime was introduced in August 2013, numerous TSPs, who obtained UL ISP licence afresh or by means of renewal, approached the TDSAT alleging non-level playing field among pre-UL and UL.