LEADER ARTICLE
Shourie, Wrong Number: Telecom Panel Exercise in Futility

The day Arun Shourie took over the IT and communications portfolios, there was a collective sigh of relief — relief from the whimsical manner in which the sector was handled by his predecessor.
Mr Shourie''s considerable reputation, and the values he so assiduously projects, had heightened expectations. His first statement upon taking over, that he would make his moves only after he has studied the mess in detail, added to the confidence in him.But somewhere along the line, he seems to have forgotten to walk his talk.
Among his first actions was to set up a committee of WLL and cellular operators, moderated by the telecom secretary, to bring about a compromise between the warring operators. Prima facie any attempt to find a solution to the vexed issue was welcome, but why was the minister trying to rush through a compromise?
He was aware of the exact picture, which, as reams of documents available to him show, is hopelessly stacked against WLL votaries. But instead of getting to the root of the problem, the secretary made noises such as "the WLL operators having invested thousands of crores, so it cannot be allowed to go waste." A wrong is a wrong and giving such flimsy reasoning for legitimising it should be unacceptable.
Sure enough, the committee proved to be an exercise in futility. So if in one meeting the talk was of converting the WLL licence into a fifth cellular licence, at another it was suggested that there should be a single licence for all services. In between, one heard of attempts to ensure that limited mobility remained limited by restricting the multiple registrations to within a circle, knowing fully well that policing such a diktat may not be impossible, but very difficult. Little wonder, therefore, none of the parties are willing to budge.
This war is really regrettable because at the end of the day, there is actually a network whose capability is being sought to be restricted by policy. The other way of looking at it is that if someone builds something that is not permissible, creating third party interest in the process, and then demands that it be legitimised, should it be acceptable? Permitting an aberration once may open floodgates that would eventually lead to chaos in a sensitive and critical sector such as telecom. It is a situation that needs an overhaul. The minister hopes mere servicing would do the trick.
That brings us to the other major decision shepherded by Mr Shourie, that of raising the FDI cap in telecom to 74 per cent. Any number of correspondences exists between the telecom department and the home ministry on the issue, pointing out the risks involved in throwing open the sector to foreign control.
It is for the sensitivities involved that the matter has been regularly coming up for cabinet''s consideration since 2001, only to be deferred each time. Even this time, although the move has the group of ministers'' nod, the cabinet is yet to okay it. One wonders if the security issues have now been addressed, specially since not too long ago, there was a move to take the FII investment out of the FDI purview.
Several believe that security, as an issue, is a bogey, as most concerns are now addressable. But given the sector''s sensitive nature, very few countries want to take a chance, and that includes China, Korea, Taiwan, Brazil, Malaysia, Canada, Turkey, Spain and the mecca of free-enterprise, the US.
Earlier this month, a foreign investment committee in the US, made up of top national security and economic officials from the department of defence and the treasury and other agencies, raised national security concerns over a telecom deal, forcing Hutchison to back off. Should India take that chance?
The sector urgently needs funds, no doubt, but there has to be a multi-pronged strategy to address that. Raising the cap alone will only serve the immediate purpose of those whose foreign partner is pushing them for it, or where the Indian promoter wants to exit.
In desperation, some are making absurd claims. Since data shows that the real need for investment is in rural areas, they say higher FDI cap would allow funds to flow into that segment. There are several other issues concerning FDI which need a proper debate. To hasten with the cap hike without going through that exercise merely because it suits a particular lobby is not on.
It''s not all brickbats though. Mr Shourie deserves a bouquet for picking a good team for the telecom regulator. A strong regulator will go a long way in undoing a series of wrongs done in the past.
Also, it is time the operators themselves realise the harm they do to the sector by their selfish lobbying. Tinkering with the policy here, a clever insertion in the licence agreement there, or even the FDI debate, has a lot to do with the shifting stand taken by industry leaders themselves.
The government, indeed the bureaucrats, are no experts in the field, and must depend on industry experts for formulating a line. They naturally like to slip in changes in their favour which conflict with the larger interests. It is for the government to strike down such moves as soon as it realises its implications.