B. Methodology for allocating costs to different areas

5. Costs are allocated according to 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 no. 5/2004 and to activities associated with sectors outside the scope of Lei das Comunicações Electrónicas (Electronic Communications Law).

Figure 2: Phases of the Methodology for allocating costs of ICP-ANACOM

(Click to enlarge image)

Phase 1: Analysis and allocation of administrative costs to ICP-ANACOM's processes/activities

6. Firstly, costs are grouped by nature and by department, according to the following classification:

a) Direct costs - costs directly related to regulation services, through a cause-effect relation.

b)  Indirect/common costs - costs not directly related to regulation services.

c) Expenses associated with cooperation and contributions - specific expenses incurred as a result of cooperation and representation by ICP-ANACOM.

7. Secondly, costs are allocated to the processes/activities directly or through criteria which represent a cause-effect relation between the nature of the cost and the supported process(es).

8. As an example, we present briefly the sequence of movements of expenditure classification:

a) Grouping of total accounting costs by nature and by department.

b) Classification of expenditure 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 ¹/services and costing objects/clients of ICP-ANACOM ².

c) Staff costs ³ are allocated directly 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 incurred as a result of foreign travel, travel within Portugal, advertising, specialist works, professional fees, training, documentation, meetings and sponsorships are directly associated with the processes/services/clients, based on rational relations, without prejudice to an irrelevant part thereof being distributed according to Man-Hours (MH).

e) Electricity, water, air conditioning, rents of the head office premises, property insurance, elevators, cleaning, surveillance and security services costs are considered as structural costs and are distributed according to the area in m2 used by each department. Remaining operating costs, notably those related to stationery, reprography and communications are distributed between all departments, according to their consumption ⁴.

f) Costs related to cooperation and contributions/contributions ⁵ are distributed according to the nature of the activity ⁶.

g) Amortization and depreciation costs, where of a relevant amount, are associated with the work processes related to equipment, IT applications and hardware ⁷, and the remaining part is distributed according to MH.

h) Provisions are treated similarly to common costs, insofar as they are allocated to the different types of activity, according to the type of provision ⁸.

i) Other costs, particularly financial costs, are distributed according to the relative cost of MH.

9. It is important to note 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 area of regulation; these are transverse to all areas ⁹. Therefore, costs related to these work processes are distributed among all operational processes based on the criteria of relative costs or MH.

Phase 2 - Allocation of expenditures to the sectors of regulation pursuant to Lei das Comunicações Electrónicas (Electronic Communications Law)

10. In order to ensure proper allocation of costs, among each sector of regulation and within the scope of electronic communications, by act detailed in paragraph 1 of article 105 of Law no. 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 - work process/regulated area (services)/external entity (client) ¹⁰. Each type of activity corresponds to a determined set of combinations ¹¹.

12. The allocation of costs related to each type of activity follows the process below:

a) Identification of the amount of direct costs by type of activity block (spectrum management activities, numbering management activities, regulation activities, and others).

b) Distribution of the amount of common costs (common accounting costs) of the amount of cooperation/contribution costs by regulation block, considering one of the following options as a distribution criterion, in light of the type of common/cooperation cost:

i ) Direct allocation to the corresponding block of type of activities using the cause-effect relationship. 

ii ) Proportion of direct costs associated with each type of activity block.

iii ) Proportion of MH allocated to each type of activity block.

c) Subsequently, after determining the administrative costs by each type of activity block, 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 Lei das Comunicações Electrónicas (Law of Electronic Communications).

13. Subsequently, the costs determined at the level of the Electronic Communications Sector are distributed according to the acts defined in points a) to d) of paragraph 1 of article 105 of the Lei das Comunicações Electrónicas (Electronic Communications Law).