PT Comunicações, S.A. (PTC) is the Portuguese universal service (US) provider of a: i) connection to a public communications network at a fixed location and a publicly available telephone service via that connection; ii) comprehensive directory and directory enquiry service; and iii) provision of public pay telephones.
In accordance with article 95 of the Electronic communications Law (ECL)1, where the National Regulatory Authority (NRA) considers that the provision of universal service may represent an unfair burden on the respective providers, it must calculate the net costs of the universal service (USNC) obligations in accordance with one of the following procedures:
a) Calculating the net cost of the universal service obligation, taking into account any market benefit which may accrue to providers;
b) Using USNC identified in the scope of a designation mechanism provided for in ECL.
Pursuant to article 95 of ECL, and in the light of article 96 of the same law, ICP - Autoridade Nacional das Comunicações (ICP-ANACOM) approved on 09.06.2011 a decision on the definition of unfair burden and on the methodology for calculating USNC, further to a public consultation and prior hearing of interested parties. Following this last procedure, three other determinations of the same scope were adopted: (i) on 29.08.2011, the Authority decided that the claim filed by PTC was partly admissible and amended determination of 09.06.2011, so as to use prices effectively applied to determine the "unprofitable areas" and "unprofitable customers living in profitable areas", as well as to calculate USNC of unprofitable areas/customers; (ii) on 25.11.2011, ICP-ANACOM determined the price elasticity of demand to be considered for the calculation of USNC; and (iii) on 12.10.2012, the concept of «unusually high access costs» was developed, in order to determine unprofitable customers living in profitable areas, and consequently to calculate USNC.
The above-mentioned determinations explain in detail how the methodology is to be applied for USNC calculation purposes, as from the moment in which it is deemed that its provision entails an unfair burden (that is, as from 2007, inclusive) and for as long as the US is provided by PTC and not supplied further to the ongoing tender procedure for the designation of US providers.
Under applicable legislation, the US provider is responsible for making available all appropriate accounts and information used to calculate USNC, in compliance with determinations issued by this Authority.
As such, and following ICP-ANACOM's determination of 09.06.2011 on the methodology for calculating USNC, PTC submitted to ICP-ANACOM, on 28.11.2011, USNC estimates for 2007, 2008 and 2009.
Being incumbent on ICP-ANACOM to submit such estimates to an audit, under paragraph 4 of article 96 of ECL, as well as to approve USNC values, this Authority approved on 27.04.2012 the launch of a public tender, having awarded on 06.08.2012 to SVP Advisors, S.L. (SVP)2 the audit to USNC estimates presented by PTC for the financial periods from 2007 to 2009, in order to assess the conformity of the calculation presented with the methodology defined by ICP-ANACOM.
The audit consisted in an in-depth, systematic and overall analysis of USNC estimates presented by PTC for the 2007-2009 period, namely the revision of calculations and sources of information, as well as the identification and analysis of any shortcomings, discrepancies, alternative approaches and all relevant issues related to the methodology applied.
1 Law No 5/2004, of 10 February, as amended and republished by Law No 51/2011, of 13 September.
2 After the work was awarded to SVP, the company changed its corporate name to AXON Partners Group Consulting S.L.. For the sake of simplification, the company continues to appear as SVP throughout the text.
