Starlink in India: Role of CAG and Regulatory Considerations
PM Narendra Modi with Billionaire Elon Musk Image credit X.com
Administrative Allocation of Spectrum for Satellite Communications May Face Legal Scrutiny
(First of three-part series)
By P. SESH KUMAR
NEW DELHI, June 5, 2025 — The method of spectrum allocation for satellite services could become a contentious issue. The Indian government, through the Telecommunications Act of 2023, has allowed for administrative allocation of spectrum for satellite communications, citing technical and economic reasons.
However, this approach could face legal challenges, with critics arguing that it contravenes the Supreme Court’s 2012 judgment, which emphasized that spectrum is a public good and should be allocated transparently, preferably through auctions.
In addition to industry pushback, there have been calls for judicial intervention. Former Union Secretary EAS Sarma has demanded a judicial probe into the administrative allocation of satellite spectrum, citing concerns over national security and the potential violation of the Supreme Court’s directives. He argues that the allocation process lacks transparency and could undermine public trust in the management of national resources.
The Department of Telecommunications (DoT) is currently in the process of finalizing the rules for satellite spectrum allocation. A draft policy is expected to be released soon for stakeholder consultation. The proposed allocation method is anticipated to follow a first-come-first-served model, which has further fuelled the debate over fairness and transparency in spectrum distribution.
The Telecom Regulatory Authority of India (TRAI) has submitted its recommendations to the DoT, proposing that satellite communication companies pay 4% of their adjusted gross revenue (AGR) as spectrum usage charges. Additionally, for non-geostationary satellite operators, an extra charge of ₹500 per urban subscriber per year has been suggested, with exemptions for rural and remote areas.
These recommendations are currently under review by the Digital Communications Commission (DCC), the apex decision-making body within the DoT. Subsequent approval from the Cabinet will be required for the pricing mechanism.
The finalization of these rules is crucial for companies like Eutelsat OneWeb and the Jio-SES joint venture, which appear to have obtained all necessary clearances and are awaiting spectrum allocation to commence commercial services.
Elon Musk’s Starlink, having received a letter of intent for a satellite communication license, is also in line to receive test spectrum upon demonstrating compliance with India’s security protocols.
In this context, the Comptroller and Auditor General (CAG) of India ought to play a pivotal role. Given its mandate to audit and ensure accountability in the use of public resources, the CAG should examine whether the administrative allocation of satellite spectrum aligns with legal and constitutional principles.
Such an audit would assess if the process upheld the public trust doctrine and whether it resulted in any undue advantage or loss to the exchequer (the bogey of presumptive losses, notwithstanding).
Starlink’s impending launch in India presents a dual narrative. On one hand, it offers the promise of enhanced connectivity for millions in underserved areas, aligning with national goals of digital inclusion.
On the other, it introduces complexities related to market competition and regulatory integrity. As the telecommunications sector navigates this new frontier, ensuring a level playing field and adherence to legal frameworks will be crucial.
The involvement of oversight bodies (TRAI has an onerous responsibility too) like the CAG will be instrumental in maintaining transparency and public confidence in the evolving digital landscape.
But even as these partnerships bloom, the underlying controversy over spectrum allocation remains unresolved. The 2023 Telecommunications Act allows administrative allocation of spectrum for satellite services, citing global best practices and the technical nature of satellite use cases.
However, this could attract judicial scrutiny and petitions challenging the legality and fairness of the process.
This is precisely where the CAG must step in, not merely as a financial auditor, but as a constitutional guardian of public resources. The 2G spectrum judgment did not just open the floodgates to judicial activism—it reinforced the legitimacy and necessity of CAG’s role in examining whether national assets are being allocated in ways that maximize public good.
In light of that precedent, a meaningful audit by the CAG into the administrative allocation of satellite spectrum should involve a series of critical checks.
First, the CAG could examine whether the Department of Telecommunications undertook any independent valuation of the satellite spectrum being allocated.
Was there a rigorous benchmarking exercise, comparing international pricing, technological utility, and revenue potential? Was there any cost-benefit analysis done comparing auction-based models with administrative allocation? If such analysis was missing or superficial, it could be documented as a lapse in governance.
Second, the CAG could scrutinize the process of selection and eligibility—were the conditions for allocation applied uniformly?
Were all capable and interested parties invited to apply under identical conditions?
Did any private players benefit from advance knowledge or preferential terms that others were denied?
In the 2G case, one of the major criticisms was that policy was tailored to suit pre-decided entities. This audit must seek to prevent a repeat of that history.
Third, CAG could evaluate the reasonableness of the spectrum usage charges (SUC) levied under the new framework.
While satellite operators are required to pay only a fraction of what terrestrial telecom players pay, CAG could audit whether this revenue foregone is justified in terms of the services being delivered to citizens, particularly in rural or border areas.
Is there a clause mandating time-bound rollout? Are penalties in place for non-performance or spectrum hoarding? Are satellite providers held to service obligations similar to Universal Service Obligations levied on telecom operators?
Fourth, the audit could probe the regulatory rationale. If administrative allocation was justified on grounds of technical infeasibility of auctions, then CAG must assess whether this justification was supported by credible, third-party technical advice.
Were other countries’ models cited in the policy actually comparable in scope, density, and spectrum management practices? Or were they selectively quoted to justify a policy pre-decided for expediency or investor favouritism?
Fifth, CAG could look into the monitoring and enforcement mechanisms post-allocation. Are there systems in place to ensure that satellite spectrum is not being underutilized or sub-leased in ways that violate the public interest?
Is the regulator equipped—technically and legally—to monitor the compliance of satellite service providers with data security, national sovereignty, and rural service benchmarks?
Finally, the audit could include an analysis of inter-departmental coordination. With foreign satellite providers in play, has the Ministry of Home Affairs, the National Security Council Secretariat, and the Ministry of External Affairs been involved in vetting the operational, cybersecurity, and sovereignty-related implications of cross-border satellite internet provision?
In all this, the CAG’s role is not to adjudicate on the legality of administrative allocation per se. That is the court’s domain. But it is very much within the CAG’s constitutional mandate to audit the policy’s impact on government revenue, its fairness in execution, and its alignment with principles of equity, transparency, and accountability.
To ignore this moment many would say, would be a dereliction of CAG’s institutional duty. As India opens its skies to private global constellations, the challenge is not whether we should welcome them, but whether we are doing so on terms that protect our citizens’ interest and the public purse.
Starlink may beam data from space, but it is up to terrestrial institutions like the CAG to ensure the light of accountability reaches every corner of policymaking—even, and especially, those above the clouds.
(This is an opinion piece; views expressed solely belong to the author)
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