New Delhi: The Supreme Court this morning cancelled 122 telecom licenses issued by A Raja in 2008,  a decision that will  trigger  powerful changes in the telecom sector, and in how much India pays for cellphone services. The court said using a first-come-first-serve policy to allocate national resources like airwaves is dangerous, and designed to benefit any one "with access to power corridors."  (Read judgement here)

In a verdict on another crucial aspect of the telecom scam, the Supreme Court refused to order the CBI to investigate the actions of P Chidambaram as  Finance Minister when Mr Raja allegedly fathered India's biggest swindle.  That decision, Justice AK Ganguly and GS Singhvi said, must be taken in two weeks by a trial court that's headed by Judge OP Saini, who is handling the telecom scam.

It's a tough week for Mr Chidambaram - on Saturday, Judge Saini is expected to rule on whether Mr Chidambaram should be made a co-accused in the swindle for allowing Mr Raja to gift mobile network licenses and scarce second-generation or 2G spectrum at prices that were staggeringly low.

The court has also said in its verdict that Mr Raja deliberately kept Mr Chidambaram out of the loop on his decisions -a stand that will help prop up Mr Chidambaram during a period of incessant attack.  He must resign, said the BJP, till his name is cleared by Judge Saini's court.

The Supreme Court delivered a third verdict too  - it refused  to make the CBI accountable  to a Special Investigating Team (SIT), as requested by lawyer-activist Prashant Bhushan who said the agency was not handling the telecom case impartially.  Mr Bhushan, like the opposition, has alleged that the government is influencing the CBI to protect Mr Chidambaram. (Supreme Court's telecom verdicts: 10 big facts)
 
The Supreme Court today said that the new 2G licenses will have to be allotted via an auction of spectrum; it has given the telecom regulator TRAI four months to frame the guidelines for this process.  Till then, its order on the cancellation of licenses will not apply.  Analysts say that the auction will force the exit of smaller, newer and less serious players from the telecom field.  The original big boys like Vodafone and Airtel will benefit, they say.  Experts also point out that the cancelled licenses apply to 5% of the total customer base, and that TRAI will use the next few months to help subscribers of affected companies to switch to other operators. (How Supreme Court 2G verdict impacts stakeholders) 

Though the nixing of all 2G licenses suggests a huge indictment of the government for failing to protecting the country's interests, the UPA says the court has not held it responsible for Mr Raja's actions.  "I repeat that the Prime Minister and then Finance Minister P Chidambaram are in no way responsible" , said Telecom Minister Kapil Sibal, a press conference this afternoon. "The Supreme Court has clearly said that the then minister (Raja) did not heed to the good advice of both Prime Minister Manmohan Singh and the Finance Ministry," he added. (Watch: Sibal defends PM, Chidambaram)

So far, the government had argued that it was not the first-come-first-serve policy that was the problem, but Mr Raja's manipulation that pushed ineligible companies to the head of the queue for license. Today, Mr Sibal agreed that the court has faulted the policy in its entirety.  For this, he said, the BJP must take responsibility and apologize to the people of India because it was the BJP-led NDA that introduced this guideline.

The BJP says that by ordering the cancellation of all 2G licenses, the Supreme Court has established that the government failed to protect the country's interests, and that the Prime Minister and Mr Chidambaram can no longer distance themselves from the actions of Mr Raja. BJP leaders like Arun Jaitley alleged that the government has to accept collective responsibility for a decision that the Supreme Court described as having a "fundamental flaw in principle". (BJP uses telecom verdict to target PM, Sonia Gandhi) 

The court holds TRAI responsible for not recommending an auction of spectrum, and  Mr Raja's policies to be deliberately nefarious and designed to "favour some companies at the cost of the pubic exchequer." But Mr Chidambaram is let off the hook.   The judges find that Mr Raja and his Department of Telecom failed to consult the Finance Ministry headed by Mr Chidambaram for the pricing of spectrum.  They say Mr Raja knew, for example, that the Finance Secretary at the time had objected to fixing prices for licenses at the rates used in 2001, and therefore he did not seek the opinions of the Finance Ministry.

The court uses strong language against the first-come-first-serve policy that was used till recently to distribute licenses, but says that because those awarded before 2008 were not challenged in court, they remain unaffected.  Telecom ministers who preceded Mr Raja like Arun Shouruie and Pramod Mahajan also followed a first-come-first-serve theory which has been described as fundamentally flawed by the Supreme Court.  Whether those could be revoked is a question that legal experts are studying carefully. (What the 2G verdict means for you)

Tags: 2G case, 2G verdicts, Chidambaram, Supreme Court, telecom licenses