India Considers Handing Out 3G Spectrum For Free -- Upsetting Everyone
By Mike Masnick, Tue May 17 01:15:00 GMT 2005

While 3G spectrum licenses in other countries have been lucrative for the government and burdensome to buyers, India is considering a different approach: giving out new licenses for free to existing license owners. So far, this seems to have upset everyone.

It can't be much fun these days being in charge of spectrum allocation policy in any nation. No matter what you decide, it is likely to create quite a bit of controversy. Perhaps that's why so many countries are choosing very different methods for allocating spectrum, and no one seems confident of the right way.

The latest is a discussion in India about the possibility of giving existing spectrum holders new licenses for free, which probably makes some government officials gasp at the potential for lost revenue -- especially when one operator has already offered to pay for the spectrum. In most places, 3G spectrum licenses are sold for incredibly high sums -- often so high that it has made it quite difficult to recoup the costs, or to justify certain aspects of building out a 3G network.

The details of the situation in India appear to be a bit more complex. The government is really trying to encourage a faster implementation of 3G services in the country -- which is why they want to just hand out the additional spectrum. In fact, part of the plan would require 3G services to be launched in two years, or the license holder would lose the spectrum. However, an earlier plan only allocated additional spectrum to the CDMA operators, which certainly didn't win much support from the GSM providers. This new plan tries to fix that situation by giving more spectrum to the GSM providers. Unfortunately, the spectrum they want to give is already being used by Indian defense services, who would be told to stop using the spectrum by the end of 2006. Of course, the CDMA providers aren't happy either, claiming that the spectrum the GSM providers will get allows them to use existing equipment, while the CDMA providers will need new equipment.

If that isn't messy enough, plenty of people are complaining that it's unfair that the government isn't getting money from this spectrum and that the Indian defense services are being forced to vacate some spectrum.

It's pretty clear that the government is just trying to work itself out of a sticky situation. However, with so many legacy issues and entrenched interests all worried that they're going to lose out, it seems like a no win situation for regulators, and shows why spectrum allocation policy is anything but easy these days.