A panel set up by Communications Minister Kapil Sibal to ascertain the reasons for delays in providing mobile services in rural areas under the USOF scheme, has proposed blacklisting of players for five years in case of termination of agreement before the expiry date.

"The Universal Service Providers (USPs) shall be blacklisted for five years, thereby debarring them from participation in any Universal Service Obligation Fund (USOF) scheme for five years from the date of debarment in the service areas where its agreement is terminated in all clusters of that area," the inter-ministerial panel has proposed in its draft report.

Last month, Sibal had set up a panel to ascertain the reasons for delays in providing mobile services in rural areas under the Universal Service Obligation Fund (USOF) scheme.

The decision had come in the wake of a controversy over Reliance Communications switching off telecom services for some time in some areas under the USOF scheme.

The panel was set up under the Telecom Secretary to find out the reasons for the delay in rolling out mobile services under the Universal Service Obligation Fund and asked them to submit the report within eight weeks.

The private players that are included in various USOF schemes include Bharti airtel, Vodafone, Aircel, Reliance Communications and Idea Cellular. State-run PSU BSNL is also a universal service provider.

The committee also recommended that the operator shall bear all the charges or costs of inducting a new USP in place of the defaulter service provider, including any additional subsidy sought by the new player.

To scrutinise this difference between the representative rates of the new USP and defaulter USP, a bank guarantee shall have to be provided by the defaulter USP for the intervening period till a new USP is found, the note said.

"The amount of such bank guarantee shall be equivalent to the full benchmark cost of pending for commissioning loaded with 24 per cent penal interest from their due date of commissioning to the date of termination," the note added.

In case no bid is received or is successful against the new tender, a penalty equivalent to the full benchmark cost for all sites left uncommissioned shall be recovered from the USP, loaded with 24 per cent penal interest from their due date of commissioning, the draft letter said.

The USP shall keep the administrator indemnified against any claims of concerned Infrastructure Providers (IPs) either by way of obtaining 'No Objections Certificate/ No-dues Certificate' from such IPs in this regard and submitting the same to the administrator, the note said.

Finally, the letter stated that a legal opinion may be obtained as to whether the penalty for any kind of interruption of mobile services can be imposed on the defaulter USP under the licence agreement, in addition to that under the USOF agreement.

However, the committee noted that the infrastructure providers concerned have already rolled out 99.13 per cent of the infrastructure sites (7,289 out of the total 7,353 sites) under Part-A of the USOF scheme and work is in progress in the remaining sites, the note added.

As far as Part-A of the scheme is concerned, appropriate penal actions are possible in case of delays in the form of liquidated damages and forfeiture of bank guarantees.

Under Part-B of the scheme, there are two types of agreements with the concerned Universal Service Providers (USPs). One type of agreement is for those clusters where USPs are not paid any subsidy or they themselves are paying the subsidy amount to the USO Fund for using USOF-supported rent-free infrastructure sites.

Such clusters are known as zero and negative subsidy clusters.

The second type of agreement is for those clusters where USPs are getting subsidy support from the USO Fund for providing mobile services from USOF-supported infrastructure sites, apart from rent-free use of these sites. Such clusters are known as positive subsidy clusters.