Spectrum as a Public Good
Context:
The Supreme Court recently ruled that Telecom Service Providers (TSPs) do not own the spectrum they use.
Consequently, spectrum cannot be included in their pool of "assets" for insolvency or liquidation proceedings under the Insolvency and Bankruptcy Code (IBC)
Key Judicial Observations:
The Court held that spectrum is a "scarce natural resource" owned by the people of India.
The legal title vests exclusively in the Union of India, which holds it in trust for the public.
Under the Unified Access Service Licences (UASL), TSPs are granted only the right to use the spectrum.
They acquire no proprietary interest or ownership.
The Court clarified that while TSPs may list spectrum as an "intangible asset" in financial statements, this merely represents "control over future economic benefits" and is not conclusive proof of ownership.
Implications for Insolvency:
Exclusion from Liquidation:
Since the corporate debtor (TSP) has no ownership rights over the spectrum, it cannot be sold or transferred to recover dues under the IBC framework.
Nature of Dues:
The Court ruled that licence fees and spectrum usage charges are "regulatory considerations" for a sovereign privilege, not payments for goods or services.
Therefore, DoT dues are not "operational debts."
Sovereign Relationship:
The relationship between the Union and the TSP is that of a "Sovereign-Licensee," not a commercial "Creditor-Debtor."