>> As part of a tripartite licensing agreement, the government recognized the idea of the range as a guarantee that would be used by telecommunications companies to raise funds from banks. (Tripartite agreement between government, Tco and banks) TRAI made specific recommendations on performance bank guarantee (PBG) for (i) compliance with the terms of the licensing agreement and (ii) PBG for roll-out obligations. With respect to the Rs. 10 (ten) Crores PBG for compliance with the terms of the licence agreement and the instructions of the DoT, the TRAI recommends that the condition be removed from the licence agreement and that it be retained as part of the WOL. With regard to the PBG for roll-out commitments, TRAI recommends: on a similar point, with regard to the condition that the taker must obtain prior authorization from the DoT for the sale of equity within the blocking period, TRAI recommends including this condition in the WOL agreement, since the blocking period requirement is intended to prevent promoters from making rapid financial profits on the basis of the radio spectrum. While this clause may have been relevant to the licence as a whole, its inclusion in the licence is no longer relevant because the spectrum is auctioned separately and decoupled separately from the licence. Since the value of spectrum is determined by a market-based process, lockdown restrictions should not discourage research and development activities, which significantly impedes acquisitions in this sector. Earlier this year, SARvesh Singh, President of BBNL, wrote to the Universal Service Obligation Fund (USOF) stating that CSC had violated the terms of a tripartite agreement by relocating connectivity devices over the last kilometre without informing the first one. This, Singh said in his letter, would be a barrier to non-discriminatory access to all telecommunications and Internet service providers. The UL (AS) project refers to the cross-restriction that prohibits any shareholder from holding more than 10% of the equity of two licensees in the same telecommunications circle. TRAI indicated that under the new regulations, it would be possible for a group company with national licenses, such as the National Long Distance/International Distance/Internet Service Provider license, to overlap with the UASL licences of its other companies in the group. In April 2012, TRAI recommended that restrictions on cross-holding activities in more than one licensing company in the same service area should only apply if frequencies were assigned to them.
Since, under the new regime, the spectrum is disconnected from the licence, TRAI recommends that significant capital or cross holding requirements be solely related to the operation of frequencies and be specified only in the WOL agreement.