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AROI moves TDSAT challenging radio migration fee formula; TRAI clarifies after MIB letter

MUMBAI: The Association of Radio Operators for India (AROI) has moved the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) challenging the Ministry of Information and Broadcasting’s (MIB) methodology of calculation of the non-refundable one-time migration fee (NOTMF) for radio operators migrating from FM Phase II to Phase III.

Meanwhile, the Telecom Regulatory Authority of India (TRAI) has given its clarification on an earlier letter where the MIB had sought the authority’s comments on the methodology used for calculation of the NOTMF for existing cities. It was also to confirm whether the calculations of city-wise NOTMF were done as per TRAI’s recommendations dated 20 February 2014.

Accordingly, on examining the NOTMF methodology for city groups X, Y and Z, the regulator has stated that the methodology followed by the MIB is in line with TRAI’s recommendations.

However, in its reply, TRAI has said that it has neither verified the arithmetic accuracy of city-wise NOTMF calculated by the MIB, nor looked into the city-wise prices determined through the auction process.

Now the AROI has moved the TDSAT with the contention that the methodology of calculation of the migration fee is incorrect. “The AROI’s contention is that the formula for calculation depends on the recently concluded first batch of the FM phase III auctions. It involved certain target cities in each category, and depending on the increase in the percentage of the bid price, there would be an NOTMF for each category,” said a source close to the development.

In its representation, the AROI indicated the two concerns in respect of NOTMF calculation. In the first case, it gave the example of Shimla where the methodology was in line with TRAI’s recommendations.

In the second case, the AROI assumed zero per cent increase in reserve prices for 10 Group Z cities where the auction was unsuccessful as no bids were received.

However, TRAI has said that the AROI’s assumption is not tenable as the final prices for allocation of channels in such cities have not been determined. Accordingly, TRAI in its reply did not accept the request of AROI for review of NOTMF.

“The policy was silent with regard to a situation where there may not be bidding in one or more cities that fall into the target group. In that case, if one or more cities are removed from the calculation, the average increases. AROI and radio operators are taking a stand because the respective cities did not get auctioned, and it was not made clear earlier that such cities should be taken as zero and included in the calculation, thus bringing down the average. That is where the disconnect is,” the source added.

As TRAI issued the letter after the AROI had moved the TDSAT, it would be taken into consideration in the hearing scheduled tomorrow.

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