A. Sharing of costs of ICP-ANACOM
1. ICP-ANACOM's costing system was developed based on the Activity Based Costing (ABC) methodology and aims to identify the costs related to the development of the activities inherent to the statutory responsibilities attributed to it, as well as to respond to the provisions in Article 105(4) of Law 5/2004, of 10 February 1.
Overall, the two following major cost groups were identified: regulation and spectrum management costs, and costs not related to the regulation activity, the latter essentially including the costs related to the advisory and state representation activity. The sharing of costs is shown in Figure 1.
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1. Regulation and spectrum management costs |
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1.1 Administrative costs related to Electronic Communications 1.1.1 Administrative costs a) Declarations supporting rights b) Engagement in the activity of electronic communications networks and services provider c) Allocation of frequency usage rights d) Granting of rights of use of numbers 1.1.2 Frequency management costs 1.1.3 Number management costs 1.2 Costs of Postal regulation 1.3 Other regulation costs |
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2. Other costs |
2. Regulation and spectrum management costs represent the costs related to the activities of regulation, supervision, sectoral representation and cooperation, and they include the following costs:
a) Costs related to the electronic communications sector (scope of Law 5/2004)
i) Electronic Communications Costs.
Costs related to the issue of declarations for engaging in the activity, allocations of resources usage rights, and all its regulation, supervision, sectoral and cooperation activities.
ii) Spectrum Management Costs
Costs related to the set of activities carried out by ICP-ANACOM related to the planning, assignment, monitoring and supervision of the radio frequency spectrum.
iii) Numbering Management Costs
Costs related to the set of activities carried out by ICP-ANACOM regarding the planning, monitoring and supervision of the numbering plan.
b) Costs related to the Postal Sector.
c) Other administrative costs related to the regulator's mission.
Costs with the regulation of services that are not covered by Law 5/2004, such as audiotext services, ITED (Telecommunication Infrastructure in Buildings), Information Society services, amateur service and personal radio service - citizen band (CB).
3. The other costs incurred by ICP-ANACOM and which are not directly related to the regulation activity 2, include:
a) Contributions and levy costs related to national and international entities, such as 3:
i) National entities:
CPEC, ERC, Municipalities and National Association of Municipalities, ERSE, GNR, IGAE, ICS, INESC, Instituto de Meteorologia, ISQ, IC, INAC, INEM, INETI, INE, IPTM, PSP, Ports and Port Authorities, SNBPC, Courts, Universities, FPCM, FDTI, and others.
ii) Non-national entities:
ANRT - Morocco, ESA, CPLP, PALOP and Timor, PECO, other countries covered by cooperation agreements, Satellite Organisations and URSI.
b) Costs related to Advice and State Representation.
The costs resulting from ICP-ANACOM's participation as a technical representative for the Portuguese State for the sector (Article 6(1)(r) of the statutes, approved as an annex to Decree-Law no. 309/2001, of 7 December), which were not directly relevant to the regulation activity, were excluded. These costs are generically those related to the following events and entities:
i) Preparation of and participation in meetings and conferences, as well as all the interchange of information in this area.
ii) Replies to requests of different nature, such as information requests, licensing requests, expertise requests, and others.
iii) Replies to requests for radio easements and protection of radiocommunication services.
iv) Development of cooperation programmes.
v) Follow-up of special projects (ESA, Fundação para as Comunicações Móveis (FPCM), ...).
National entities:
Ministries, Regional Governments, Court of Auditors, CPEC, Fundação para as Comunicações Móveis and FDTI.
Non-national entities:
NATO, ITU (Council, Development Sector, Plenipotentiary Conference, World and Regional Radiocommunication Conferences, WTPF), Agência Nacional de Regulamentação de Telecomunicações (ANRT-Morocco), Satellite organizations, URSI, CPLP, PALOP and Timor, PECO and other countries covered by cooperation agreements.
4. In terms of the identification of the electronic communications costs, sharing takes place which enables the determination of the costs related to each act defined in Article 105(1)(a-f) of the Electronic Communications Law. Thus, costs are organized by the following blocs:
a) Spectrum management (Article 105(1)(f));
b) Numbering management (Article 105(1)(e));
c) Regulation activities - corresponding to the remaining administrative costs related to Article 105(1)(a-d) and to the regulation of communications services that are not covered by Law 5/2004.
B. Methodology for allocating costs to the different areas
5. The allocation of costs follows 2 phases:
a) Phase 1: Analysis and allocation of the administrative costs to the processes/activities/regulation areas/entities outside ICP-ANACOM.
b) Phase 2: Allocation of the administrative costs to the different types of activity according to the acts underlying Article 105 of Law 5/2004, and related to sectors outside the scope of the Electronic Communications Law.
Figure 2: Phases of the Methodology for allocation of costs of ICP-ANACOM
Phase 1: Analysis and allocation of administrative costs to ICP-ANACOM's processes/activities
6. First, costs are grouped by nature (pool) and by department according to the following classification:
a) Direct costs - costs directly related to the regulation services, through a cause-effect relation.
b) Indirect/common costs - costs not directly related to the regulation services.
c) Cooperation and levy costs - ICP-ANACOM's specific cooperation and representation costs.
7. Secondly, administrative costs are allocated to the processes/activities directly way or through criteria that represent a cause-effect relation between the nature of the cost and the process(es) it supports.
8. As an example, we briefly present the sequence of movements for cost classification:
a) Grouping of total accounting costs by nature and by department/office.
b) Classification of costs according to the structure of the work processes in force, regulated and non-regulated areas (services), and external entities (clients). Analysis and allocation of costs to the processes 4/services and costing objects/clients of ICP-ANACOM 5.
c) Personnel costs 6 are directly allocated to the processes/services and costing objects/clients of ICP-ANACOM, according to the report made by all employees on a computer application ''Reporte de Horas de Trabalho (RHT)'' - Working Hours Report.
d) Costs with travelling abroad, travelling within Portugal, advertising, specialized works, honoraria, training, documentation, meetings and sponsorships are directly related to the processes/services/clients, based on rational relations, without prejudice to an irrelevant part being distributed according to the Man-Hours (MH) criterion.
e) Electricity, water, air conditioning, rents of the head office facilities, installation insurance, elevators, cleaning, surveillance and security services costs are considered structure costs and are distributed according to the m2 used by each department/office. The remaining structure costs, notably those related to procurement, reprography and communications, are distributed among all departments/offices, according to their consumption 7.
f) Costs related to cooperation and contributions/levies 8 are distributed according to the nature of the activity 9.
g) Amortizations, in a relevant amount, are associated with the work processes related to equipment, computer applications and hardware 10, the remaining part being distributed by MH.
h) Provisions are treated similarly to common costs, being allocated to the several types of activity, according to the kind of provision 11.
i) Other costs, particularly financial costs, are distributed according to the relative cost.
9. It is important to stress that certain work processes, such as ''Planning and Control'', ''Financial System'', ''General Services'' and ''Human Resources'' do not have a direct relation to a specific regulation area, being transverse to all areas 12. For this reason, costs related to these work processes are redistributed to all operational processes, based on the criteria of relative costs or MH.
Phase 2 - Allocation of administrative costs by nature to the regulation sector within the Electronic Communications Law
10. In order to ensure a correct allocation of costs, by each regulation sector and within the scope of electronic communications, through the act detailed in Article 105(1) of Law 5/2004, a process was developed which enables the distribution of costs, and which is identified as ''type of activity''.
11. The type of activity is identified according to a combination of work process/regulated area (services)/external entity (client) 13. Each type of activity corresponds to a given set of combinations 14.
12. The allocation of overall costs related to each type of activity follows the following process:
a) Identification of the amount of direct costs by type of activity bloc (spectrum management activities, numbering management activities, regulation activities, and others).
b) Distribution of the amount of common costs and cooperation/levy costs by regulation blocs, considering one of the following options as a distribution criterion, bearing in mind the type of common/cooperation cost:
i) Direct allocation to the corresponding type of activity bloc through cause-effect relation.
ii) Proportion of direct costs consumed by each type of activity bloc.
iii) Proportion of MH allocated to each type of activity bloc.
c) Afterwards, after determining the administrative costs by each type of activity bloc, the costs allocated to ''all activities'' of regulation are distributed among the following regulation sectors:
i) Electronic Communications Sector;
ii) Postal Sector;
iii) Other sectors outside the scope of the Electronic Communications Law.
13. Afterwards, the costs determined at the level of the Electronic Communications Sector are distributed by the acts defined in Article 105(1)(a-d) of the Electronic Communications Law.
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Type of Activity according to the acts underlying Article 105 of Law 5/2004 |
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Declarations supporting Rights |
Regulation |
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Engagement in the activity - Regulation |
Regulation |
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Allocation of Frequency Usage Rights |
Regulation |
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Allocation of Rights of Use of Numbers and their Reservation |
Regulation - |
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Spectrum Management Activities |
Spectrum Management |
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Numbering Management Activities |
Numbering Management |
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Costs allocated to sectors outside Law 5/2004 |
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Declarations supporting Rights 15 |
Regulation |
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Engagement in the activity - Regulation 16 |
Regulation |
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Amateur and CB records and certificates 17 |
Spectrum Management |
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Allocation of Rights of Use of Numbers and their Reservation 18 |
Regulation - |
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Spectrum Management Activities 19 |
Spectrum Management |
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Numbering Management Activities 20 |
Numbering Management |
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Costs not directly related to the regulation activity |
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Common Costs |
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Common Costs - Spectrum Management Activities Common Costs - Spectrum Management Activities - Services Law 5/2004 Common Costs - Spectrum Management Activities - Services not covered by Law 5/2004 Common Costs - Regulation Activities Common Costs - Regulation Activities - Services Law 5/2004 Common Costs - Regulation Activities - Services not covered by Law 5/2004 Common Costs - Numbering Management Activities Common Costs - Allocation of Frequency Usage Rights Common Costs - Allocation of Rights of Use of Numbers and their Reservation Common Costs - Declarations supporting Rights Common Costs - All activities - To distribute based on direct cost Common Costs - All activities - To distribute based on MH Common Costs - All activities - To distribute other costing object |
Spectrum Management Spectrum Management Spectrum Management
Regulation Regulation Regulation Numbering Management Regulation Regulation - Regulation
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1 Where the amount of fees referred to in Article 1(a-e) is determined with regard to the administrative costs incurred in the management, control and enforcement of the general authorisation scheme and of rights of use and of specific obligations as referred to in Article 28, which may include costs for international cooperation, among other things.
2 These costs are not considered to be relevant for ICP-ANACOM's regulation activity, according to the interpretation of Article 105(4) of Law 5/2004.
3 The amounts referring to contributions and levy costs tend to decrease sharply, since part of them resulted from Government decisions that were already carried out, or form ICP-ANACOM decisions that were not renewed.
4 According to the Processes/Activities Dictionary that supports the report of working hours of all ANACOM employees in the ''Reporte de Horas de Trabalho (RHT)'' - Working Hours Report, and the cost classification. The RHT application enables to obtain ANACOM's overall Man-Hours (MH).
5 Combination process and/or service or costing object and/or client.
6 Except for costs related to the Christmas Party, Anniversary and similar events to employees which are treated like common costs (Common Costs nature - All activities - Distribute other costing objects).
7 Being distributed to processes/services/clients in terms of each department's/office's hours report (MH - Man Hours for each department).
8 Always linked to the ''Cooperation'' process and to a particular external body.
9 Part of these costs is not related to a regulation activity. See, too, the Type of Activity List (Figure 3).
10 For instance: amortisation of SINCRER equipment (Integrated Remote Control System for Radio Stations) is associated with the ''Spectrum monitoring'' sub-process and all radiocommunications services.
11 It may be shared on the basis of direct costs or MH. Provisions for legal actions in progress accounted for in recent years have been regarded as Common Costs - Regulation Activities - Services Law 5/2004 and Common Costs - Spectrum Management Activities - Services Law 5/2004.
12 They are regarded as common processes.
13 In some circumstances it is a function of the department/office that generated the cost.
14 According to the Dicionário de Processos/Actividades in use in ANACOM that supports the costing system.
15 For the postal activity.
16 Postal Services and ITED.
17 Records and certificates related to CB (citizen band) and amateur service.
18 Audiotext and premium services.
19 CB and amateur service.
20 Audiotext and premium services.
