Determination
I – The Facts
On 07.12.2004 NOVIS TELECOM, S.A. (NOVIS) submitted a communication to ANACOM concerning it starting to offer a new “access service to the public telephone network in a fixed locale and a telephone service in a fixed locale”.
After analysing this service, ANACOM determined as follows on 10.12.2004:
«1. To allow the use of the GSM frequencies of the terrestrial mobile network of OPTIMUS in the local access network for the providing of fixed locale voice services by NOVIS, with the typical service characteristics presented to ANACOM on 7.12.2004;
2. To recognise the right to use the numbering range “2” of the PNN (National Numbering Plan) in the context of the same service, as long as the mobility associated with the terminal is only that which is unavoidable, taking into account the technology used, to guarantee access in a fixed locale;
3. To stipulate that NOVIS should present clear and transparent information to the final users on the aforementioned service, clarifying, the following, in particular:
a) The service coverage zone, including any possible indoor accessibility limitations;
b) Impact in terms of the location of the caller on calls made to the single European emergency number (112);
4. To submit what has been decided in the preceding numbers both to a prior hearing by NOVIS and OPTIMUS, under the terms of Articles 100 and following of the Administrative Procedure Code, fixing a period of 10 days for these companies to state their cases in writing, and to the general consulting procedure, under the terms of nº 2 of Article 20 of Law nº 5/2004, of 10 February, fixing a period of 10 days for interested parties to state their cases;
5. To submit the effective provision of the aforementioned service by NOVIS to the decision that is taken at the end of the procedures alluded to in the previous number.»
After the conclusion of the prior hearing procedure and the general consultation procedure, ANACOM analysed all the contributions received and prepared a report, which also contains observations on the questions raised by the interested parties.
There were also contacts between ANACOM and the Competition Authority. The latter, following a request by ANACOM for its opinion, stated that the supply of this service should be considered as an “alternative to the traditional fixed telephony service from the point of view of the consumer”, being to the consumer’s benefit. The Competition Authority also stated that in its view the granting of “access to the public mobile telephone networks would contribute significantly to the promotion of competition in the voice services markets”.
II – Analysis
As mentioned, a detailed analysis of the questions presented is given in the attached report and is the basis for this deliberation.
The most noteworthy conclusions are:
1. General considerations
ANACOM considers that the use of local access alternatives for the provision of voice services, increasing the offer available on the market, contributes to giving consumers greater choice and to developing the supply of electronic communications networks and services and, consequently, to satisfying the specific needs of citizens.
Indeed, the principles of freedom of supply of electronic communications networks and services, of the technological neutrality of regulation and of the defence of consumers’ interests determine that the approach to the service in question should be centred on finding out whether or not this same service can be provided and in what conditions, taking into account that providing this service involves the use of frequencies and numbering resources, the use of which is subject to certain rules and principles.
2. The characteristics of the service and numbering
Technological change has meant that it has been possible to build a variety of offers with clear benefits to the market, since they generally constitute solutions with added value or with lower production costs and thus bring advantages to consumers and operators. For this reason, in the analysis two different perspectives can be used to characterise an electronic communications service:
a. From the technological perspective, what are important are the means or methods for the implementation of the service;
b. From the market perspective, the way in which the service is presented to this market takes precedence.
Without denying that it is of fundamental importance for the regulator to understand the technical context underlying the supply of an electronic communication service, the way in which such a service is perceived by the general user is equally important.
Indeed, one of the basic principles of the current regulatory framework is that of technological neutrality (Article 5, no. 8 of REGICOM) which states that ANACOM must “seek to guarantee the technological neutrality of regulation”. This provision means that, for the purposes of regulation, the market perspective may be given more weight than the technological perspective.
The service put forward presents the regulations with new solutions for users and with the need to adopt a solution in regulatory terms which favours competition and protects the interests of the users. The service, the safeguarding of consumers’ interests, the contribution to increasing sustained competition and the regulatory framework all require an appropriate response.
It will be recalled that ANACOM stated, in the draft decision of 10.12.2004, that the service presented by NOVIS “has some mobility – although this is reduced in scope – resulting from the fact that the connection to the final user is not based on a physical access point in the public telephone exchange network.”
It was, indeed, the recognition that mobility was excessive which led to ANACOM adding, as an essential condition for clearing the provision of the service in range “2”, that this should be reduced to “the mobility typically provided by the technology available in fixed network systems”. And that mobility should be “only that which is unavoidable to guarantee access in a fixed locale”.
In fact, if the service was, for example, a typical FWA solution, the use of the PNN range “2” would not be in doubt. In the same way, if the offer involved a mobile service identical to that which is generally understood as such, that is, a mobile terrestrial service, the use of the range “9” would also naturally be the appropriate one.
In this regard it is important to recognise that traditional concepts, such as those of fixed and mobile services, will have a tendency to become condensed in new ways (without prejudice, naturally, to current legal interpretations).
The resort to different types of technology, especially wireless, means that the fixed telephone service is detached from the traditional termination point of the public exchange telephone network as an immediately perceived physical reality. This change is easily perceived by the users: from the old fixed telephone service which was accessed through terminal equipment by means of wires, connected to a socket, naturally fixed, we have gone to wireless solutions which are more and more sophisticated. In this context, using mobile systems’ frequencies to provide telephone services in a fixed locale is possible and does take place.
In fact, the technology used in fixed networks has involved importing elements which add mobility (and/or nomadic) characteristics, without this becoming identified with the overall mobility typical of mobile services. This reality was thus recognised in the draft of the decision.
It will be recalled that ANACOM considered that associating the service (with the characteristics of that presented by NOVIS on 7.12.2004) to geographic numbers should not be excluded at the outset since potential users of the service would only be able to use it in a defined and restricted geographical base.
In fact, it must be kept in mind that the first and second services which NOVIS told ANACOM about, respectively on 12.11.04 and on 7.12.04, are not comparable since they present completely different mobility “dimensions”. And it is very well known that a quantitative variation may give rise to a qualitative alteration.
ANACOM thus considered, in the draft decision, the possibility of using the range “2” if the service were configured like the usual fixed network solution, and was perceived as such by the final users. That was why ANACOM determined that the mobility associated with the terminal should be only that which is unavoidable, given the technology used, to guarantee access in a fixed locale.
The numbering range “2” has been used in the context of the PNN for the provision of fixed telephone services. The first two digits have a geographic meaning and signify, in fact, a “physical location”, as mentioned in paragraph p) of Article 3 of REGICOM, but which traditionally do not correspond to the “exact locale” of the address/location of the client’s terminal equipment, but rather to the “geographic zone” in which that address is located (zone of a particular geographic telephone area code).
Mobility restriction was, therefore, the determining aspect for the possibility of using the range “2”.
It is ANACOM’s understanding that to comply with this requirement it is necessary to guarantee that the service, without any loss of quality offered, should be accessed through a terminal connected solely to a pre-determined Base Station (BTS).
However, other factors must be taken into account, particularly whether it is feasible to identify a single BTS for specific situations (e.g. zones where pico-cells/micro-cells and macro-cells coexist), and the quality of service guaranteed.
Thus it should be noted that in exceptional situations that are properly justified it may be necessary to connect to two, or a maximum of three, BTSs.
This is the only way that ANACOM considers that the condition imposed for using the number range “2” is guaranteed – or, in other words, that the mobility associated with the terminal is only that which is unavoidable, given the technology used, to guarantee access in a fixed locale.
Consequently, NOVIS should inform the end users that the access to the service is guaranteed at the address declared for this effect by the client – and it must not advertise that it guarantees service coverage within “a surrounding radius of approximately 200 metres”.
It should be added that it is recognised that there may be operational issues, which could make it difficult to limit the mobility around the BTS (or, exceptionally, the BTSs) at the moment when the service is activated.
It is thus reasonable to admit that there should be a time interval (10 days) allowed after service activation so that mobility can be reduced to the minimum required.
With regard to the control of this type of situation, OPTIMUS and NOVIS should keep a record of all the terminals and the associated BTSs so that they can provide ANACOM with information on them when requested.
This record must contain the following minimum information:
i. The address declared by the end user for service access;
ii. The telephone number of the end user;
iii. The service activation date;
iv. The identification, including the geographic coordinates1https://www.anacom.pt/render.jsp?contentId=55129, of the BTS, or, in special cases, the BTSs, associated with the terminal, after the selection process.
Whenever necessary, ANACOM can request technical justification for the need to connect to more than one BTS. This must be based on the parameters which served as the basis for identifying the BTSs.
3. The use of frequencies
The draft decision adopted on 10.12.2004 is in accordance with Directive 87/372/EEC, of the Council, of 25 June. The fulfilment of the provisions of that directive and in particular of the provisions in its Article 1 has been and is guaranteed by the Portuguese State insofar as the frequencies in question are exclusively used in the GSM systems of the three mobile operators which are active in the market.
The use which OPTIMUS now wants to make of those frequencies does not contravene that rule, given the existence of two licensing levels which, without any overlap, have always co-existed in the national legal system.
Thus at the radio communications level the frequencies continue to be used exclusively by the GSM system, respecting the harmonisation at the European level.
In parallel, this decision ensures that OPTIMUS continues to be fully bound by the obligations, which are applicable to it as a provider of a terrestrial mobile service.
In fact, the object of the licence is fixed in the following terms: providing mobile telecommunications service – Terrestrial Mobile Service – with automatic access to and from the public exchange network, in accordance with the standards of the Global System for Mobile Communications/Digital Communications System (GSM/DCS), of ETSI.
In the same licence, OPTIMUS was assigned with a defined set of channels in the GSM 900 and DCS 1800 bands,to provide this service,.
The service which OPTIMUS is qualified to provide, under the terms of its licence, is developed in the context of a retail activity – a service provided to end users – while in the service provision communicated OPTIMUS is presenting a wholesale offer – supplying network capacity to third parties, allowing its GSM access network to be used to provide a service in a well defined geographic location.
In this context, the use which OPTIMUS is now seeking to make of the frequencies which are assigned to it is, in fact, an extrapolation of the object of the licence.
Thus what is in question is the use of the GSM frequencies assigned to OPTIMUS for a purpose not covered in the respective assignment, that is, for a third party to supply a different electronic communication service.
It is thus in the context of the alteration of the right to use the OPTIMUS frequencies – and not just from the point of view of the general authorisation regime – that ANACOM must assess and decide on the intention presented, since it is the competent authority for doing this.
Indeed, as the spectrum manager entity (Article 15, no. 1), it is ANACOM’s responsibility to take care of frequency planning (Article 15, no. 2), the identification of cases in which usage rights are required (Article 16, no. 1), the assignment of those rights (Article 19, no. 3) and the specification of the applicable conditions (Article 32, no. 2) and, in certain cases, the alteration of the assigned usage rights (Article 20).
Accepting that the new allocation of frequencies sought by OPTIMUS could be presented as just a corollary of the freedom of supply underpinning the general usage regime may constitute a subversion of the usage rights assignment system. The latter’s exceptional existence is justified by the necessity to safeguard and control the scarce resource involved.
And even though in this case it may be felt that the decision of ANACOM would be inevitably committed, this Authority cannot – and should not – stop exercising its powers in this domain.
ANACOM must act in this context considering that what is in question is a new use for an assigned resource. This power is not set aside, nor is it incompatible with the legally recognised freedom, which the parties have to negotiate and agree on different technical and commercial access modalities.
ANACOM’s consideration of this matter necessarily includes new questions relating to the spectrum raised by the possibility contained in the new regulatory framework on the transmissibility of frequency usage rights, established in Article 37 of REGICOM, and which is subject to specific procedures.
4. Associated competition issues
In the current regulatory framework, the obligations concerning non-discrimination or network access negotiation can only be imposed, in principle, on operators which have been notified and which have significant market power (SMP) in a relevant market.
In terms of retail markets, the service presented by Novis on 07/12/2004 as appears to be capable of fitting into the markets for public fixed location telephone network access and for local and/or national and international telephone services publicly available at a fixed location, for residential clients (that is, markets 1, 3 and 4 of the Recommendation of the European Commission of 11 February 2003). NOVIS does not have significant market power in these markets.
With regard to wholesale markets, the service in question does not seem to fit a priori in any of the 18 relevant markets defined by the European Commission in the Recommendation mentioned above.
ANACOM, given the current “embryonic” phase of this new service, does not have the information to enable it to assess the respective impact on the relevant wholesale markets. This service will naturally be the object of consideration in the course of the process of analysing the relevant markets when conditions are in place to allow ANACOM to have the information necessary for its analysis, especially in relation to its impact on final consumers and competitors.
OPTIMUS has the right to freely negotiate the technical and commercial access modalities and inter-connection, just like other operators with no significant market power. ANACOM cannot thus decree that OPTIMUS guarantees the same access conditions to all interested companies.
5. Protection of users
The decision draft of 10.12.2004 ensures the pursual of the objectives conferred on ANACOM by paragraphs b) and d) of nº 4 of Article 5 of Law n º 5/2004.
At no time has NOVIS been exempt from complying with all the rules fixed in Law no. 5/2004. Just like any other company which offers electronic communication services, NOVIS is obliged to guarantee the information demanded by law on the service’s access and usage conditions, which ensure that users, in a well-informed and fully aware manner, can choose the electronic communication services which best satisfy their needs.
As the law guarantees the freedom of supply of electronic communications networks and services, ANACOM cannot prevent the commercialisation of an offer simply because the information available on it is insufficient, because the service is different from those which have been provided before or because no information has been provided to indicate that the service does not give the access the functions which were previously associated with the fixed telephone service, or because it does not advertise the fact that, as with any wireless telephone, the equipment is subject to battery and/or power failures.
Indeed, the decision to be given, ANACOM cannot enshrine a discriminatory solution since mobile telephone service providers are not bound by any obligation to provide information identical to that referred to above, nor are fixed telephone service providers bound to advertise that the services they provide are subject to interruptions, that networks can be crowded or that the use of wireless telephones is conditioned by their power supply.
The users’ rights recognised by the law justify that NOVIS should guarantee that before the signing of any contract users should have written information on service access and usage conditions and, naturally, on the limitations inherent to them.
III – Decision
In light of the conclusions presented, ANACOM’s Board of Directors, carrying out the functions assigned to it by paragraphs b), c), f) and h) of no. 1 of Article 6 of its Articles of Association, approved by Decree-Law no. 309/2001, of 7 December, in carrying out the regulatory objectives established in paragraphs a) and c) of no. 1, in paragraph d) of no. 2 and in paragraph d) of no. 4, all those in article 5 of Law no. 5/2004, of 10 February, and under article 15, no. 1, article 17, no. 2 paragraphs a) and b), article 20, no. 1, article 32, no. 2 and article 34, no. 2, all of the same Law, has decided as follows:
1. To allow OPTIMUS, licensed to provide a terrestrial mobile service, to use the GSM frequencies of the terrestrial mobile network in the local access network for the provision by NOVIS of the service presented to ANACOM on 7.12.2004, as long as the following conditions are strictly adhered to:
a) Service access must be secured through a terminal connected to a single pre-determined BTS when calls are made, received and maintained;
b) In exceptional cases, justified technically and recognised by ANACOM as being exceptional, it is permissible for a terminal to be associated with two, or at a maximum, three, pre-determined BTSs;
c) The restrictions given in the previous paragraphs must be in place no more than 10 days after the activation of the service.
2. To recognise the right of NOVIS to use the PNN numbering range “2” in the context of the service notified to ANACOM on 7.12.2004, as long as the conditions set forth in this deliberation are fulfilled.
3. OPTIMUS must present to ANACOM, within 15 working days of this deliberation, a description of the technical procedure used to select the BTSs, as well as a description of the typical kinds of situation which require connection to be made to more than one BTS, including the service activation definition adopted.
4. OPTIMUS and NOVIS must keep a record of all the terminals and the associated BTSs, including the following information:
a) The address declared by the end user for access;
b) The telephone number of the end user;
c) The service activation date;
d) The identification, including the geographic coordinates, of the BTS or, exceptionally, of the BTSs associated with the terminal, after the selection process.
5. NOVIS must give final users clear and transparent information on the characteristics of the service, in particular making the following quite clear:
a) The guarantee that the service access is only for the address declared by the end user for this purpose;
b) Any indoor access limitations which may exist;
c) Impact in terms of locating the caller in calls made to the single European emergency number (112).
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1 Geographic coordinates in latitude, longitude (degrees [º], minutes [‘] and seconds [“]) and the geo-referencing system.
