ISPAI President Rajesh Charia, voicing his concern over the matter, says: "The amount fixed as reserve price for any ISP is not reasonable and will lead to monopoly. Rs 700 crore, which has been earmarked for a pan-India licence, is unfair."

He adds that such high rate would not only disallow the ISPs to participate freely but will also result in a higher price to be paid by the customer for BWA services.

His sentiments are echoed by Naresh Ajwani, executive vice-president, Sify Broadband. "Such service cannot be commercialised in a day when the government is stressing better broadband penetration. If the raw material (the spectrum) becomes more costlier, this will translate into high prices for the consumer as well," he said.

Sify is also contemplating dragging the Department of Telecommunications (DoT) to court citing that it had been allotted 2.5 MHz frequency for its pilot projects that was recently revoked. The company is now seeking compensation for the expenses which it had accrued on the pilot project.

Under the new guidelines, the reserve price for the allocation of BWA services has been fixed as one-fourth of the reserve price for 3G spectrum auction.

The BWA licences would be granted through simultaneous e-auction of the spectrum, similar to what will be done for 3G services. The process would be conducted by a specialised agency.

The DoT has announced reserve price for a 3G spectrum block in category 'A' circles, which is pegged at Rs 160 crore, the price for BWA spectrum, therefore, should be Rs 40 crore, as against the Rs 10 crore that the Telecom Regulatory Authority of India (Trai) had recommended in September 2006. The regulator had said the reserve price for categories 'B' and 'C' should be Rs 5 crore and Rs 2 crore, respectively.

According to the guidelines, any person who holds a unified access licence or fulfils the criteria for obtaining a UAS along with prior experience will be allowed to bid. This qualifies ISPs of 'A' and 'B' categories to participate in the auction.

Further, each successful bidder will be entitled to get 20 MHz in 2.3 GHz and 2.5 GHz bands in a telecom service areas. The spectrum in 700 MHz and 3.3-3.6 GHz shall be auctioned subject to availability.