The Department of Telecommunications (DoT) seems to be in a state of confusion on deciding the number of slots of 3G spectrum to be auctioned. It is now in favour of auctioning only two blocks and immediately assigning the spectrum to the successful winners.

"The government should auction two blocks of 2x5 MHz in 2.1 GHz band (1969-1979 MHz) and immediately assign (the spectrum) after the completion of the process to the successful bidders and take the complete bid value within ten days of the close of auction," a senior ministry official said.

The new decision, however, would have to be approved by the empowered group of ministers (EGoM) on 3G spectrum.

The EGoM, headed by Finance Minister Pranab Mukherjee, had on December 21 decided that three blocks would be auctioned and the spectrum would be allotted to winning players for commercial use after September 1, 2010.

Further, an internal DoT note also said that BSNL and MTNL should be shifted from 1965-1970 MHz frequency to 1964-1969 MHz in four telecom circles — Uttar Pradesh (West), Uttar Pradesh (East), Northeast and Assam.

DoT said auction of four blocks of spectrum was not feasible and auction of three blocks would be subject to fulfilment of MoU (between DoT and the defence ministry) commitments by August 2010. As of now, defence has released two blocks of 3G spectrum, while another block would be released by August this year.

"Putting out spectrum not available on the date of the issue of notice-inviting application (NIA) for auction would not be appropriate. If the department is not able to assign spectrum as promised in NIA, it could lead to legal challenges and damage claims from winning bidders," it said.

Therefore, it has been decided that only the spectrum that is available at the time of the issue of NIA should be auctioned.

The government earlier wanted to auction four blocks, but due to unavailability of spectrum, it had decided to auction three.