ISLAMABAD: A controversy surrounding bidders’ response in the sale of next-generation telecommunication spectrum surfaced on Wednesday in the Supreme Court which expressed confidence that media sensationalism would not deter from the auction the interested telecom operators familiar with the Pakistani market.

A three-judge bench headed by Justice Jawwad S. Khawaja also ordered that the proceeds of the auction should be kept in the Federal Consolidated Fund (FCF) until it settles a dispute about the custody of the Universal Services Fund (USF).

The row cropped up when the government transferred the Rs62 billion fund meant exclusively for the telecom sector to the FCF from the ministry of information technology.

The court is hearing a petition of an IT expert, Khurram Shehzad Chughtai, who had sought a directive for the auction of 3G spectrum license.

On Wednesday, the court wondered about the anticipated proceeds from the 3G and 4G auction.

At this, Pakistan Telecommunication Authority (PTA) Chairman Syed Ismail Shah sought permission to speak and refuted media reports about dismal response from bidders. He said the sale was necessary because the demand was higher with respect to the radio frequency spectrum put on offer by the PTA.

The PTA chief said the next six days were crucial but misreporting might adversely impact the auction scheduled for April 23 by encouraging any outsider to seek a stay order from a court.

In its order, the court mentioned alleged misreporting in the media pointed out by the PTA chairman and said that it appeared that the bidders were qualified market players familiar with the Pakistan telecommunication market.

“These bidders, on account of their specialisation and sophistication in the industry, may not be influenced by the press reports,” it said, adding that it was recording the apprehension expressed by the PTA chairman and expected that no inaccurate reporting would be done which might sensationalise the scheduled auction, which should continue uninterrupted.

“This, however, does not impact the report of the auction on April 23,” the court said.

The order said it had not been disputed from any side that the spectrum being put on sale was an asset which ultimately belonged to the people but was owned and vested in the federal government.

The court has also to decide whether the proceeds of the auction should be deposited in the FCF or elsewhere under the PTA Re-organisation Act of 1996.

During the proceedings, Attorney General Salman Aslam Butt argued that the proceeds from the auction of a scarce resource should belong to the federal government.

The court ordered that the proceeds be transferred to the FCF but subject to the final adjudication as to the vires of Section 23A of the PTA Act. The hearing will resume in the third week of next month.