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If you were expecting to use cheap WiMax broadband in India, don’t expect it anytime soon. The Department of Telecom’s (DoT) plans to take back spectrum allotted to Internet services providers (ISP) and auction the same will make WiMax services costly for the users. Meanwhile, ISPs, which hold the spectrum currently are unwilling to part with it and are threatening to go to courts over the issue.

In a latest twist to the situation, the Internet service providers association of India (ISPAI) has sought legal opinion from a Delhi HC judge and sent a letter citing the government’s weak position on taking back basic wireless access (BWA) spectrum to telecom minister A Raja.

The government plans to auction the 2.5 Ghz BWA spectrum for a minimum bid price of Rs 1,050 crore, for a total available 80 Mhz by the first week of February 2009. About 20 Mhz is reserved for MTNL, leaving only 60 Mhz for auction. The government plans to raise a minimum Rs 4,200 crore from auctioning spectrum, which it will take back from the ISPs.

The legal opinion missive by ISPAI to minister A Raja says that the DoT stance of taking back the spectrum may fall based on the doctrine of estoppel. The legal advise states it as follows: “If a government makes a promise to some person/s, and the same acts based on the promise and changes his position, the government will then be bound by the promise. All that the claimant will have to show is that he changed his position based on the promise by the government.�

The DoT had earlier this year asked the ISPs to return the 2.5 Ghz spectrum which they were allotted in 2003. ISPs like Sify, Spectranet and Aircel are unwilling to return the spectrum and say that they will move the Delhi HC on the issue if DoT does not take cognizance of their legal position on the same. ISPAI had earlier threatened to move telecom disputes settlement and appellate tribunal (TDSAT) on the issue.

The government on the other hand had issued a circular in January 2008 to ISPs asking them to return the spectrum. The letter to the minister states that the circular impinges upon the rights of ISPs, under the broadband policy 2004. It also states that failing a change in the government stance, the ISPs may invoke the judicial review jurisdiction of any constitutional court in the country. It also states that the service providers invested crores of rupees to procure equipment and any change now will render the equipment useless, thereby incurring a loss to the providers.

The letter to DoT from ISPAI has also invoked the Doctrine of Expectation under Administrative Law to press its point. According to this, “a person can be said to have a legitimate exception of a particular treatment if any representation or promise has been made by an authority.� The WiMax spectrum was allotted to the ISPs in 2003, for which the ISPs have already paid usage charges.

However, the operators had not started offering wireless broadband services citing lack of infrastructure. Says secretary general, ISPAI and Sify president Naresh Ajwani: “It’s like asking a buyer to return the car, if he has not used it frequently, due to lack of good roads. We are investing in the infrastructure, and have started pilots. We have set up base stations in 200 cities including rural areas, at a cost of Rs 25 lakh per base station to provide the service. As ISPs, we may approach the Delhi HC if the DoT does not take cognizance of our position.�

Meanwhile, ISPAI president Rajesh Charria says: “The BWA spectrum should not be put up for auction. The government should look at achieving the broadband target rather than look at spectrum from a commercial point of view. The government should look at a bailout package for ISPs.� It’s interesting to note that BWA spectrum has already been taken back from players like Reliance, HCL and Bharti.