Under the terms set out in the Electronic Communications Law (ECL)1 (vide article 97, paragraph 1), two cumulative requirements must be met so that the universal service provider (USP) is entitled to receive compensation for costs incurred in the provision of the universal service (US): (i) universal service net costs (custos líquidos do serviço universal - CLSU) must be established and (ii) such costs must be deemed to be an unfair burden.
Article 95, paragraph 1, of ECL, provides for the following alternative mechanisms for determining the amount of CLSU: (i) a methodology to be defined by ICP-Autoridade Nacional das Comunicações (ICP-ANACOM) (point a)) or (ii) the amount indicated by the USP in a tender-like designation mechanism (point b)).
Where CLSU are found to exist, article 97, paragraph 1, of ECL, provides that compensation may be paid, either in alternative or cumulatively: (i) from public funds (cf. point a)) and/or (ii) through the sharing of costs among companies providing on national territory public communications networks and publicly available electronic communications services, in which case a compensation fund must be established, managed by ICP-ANACOM or by an independent body appointed by the Government (cf. point b)).
In compliance with article 95 of ECL and having regard to article 96 of the same Law, ICP-ANACOM approved on 09.06.2011 the decision on the concept of unfair burden, as well as the decision on the methodology to be used to calculate CLSU2.
It was established in point 4 of the decision on the concept of unfair burden that the methodology for calculation of CLSU approved by ICP-ANACOM would be applied subsequently to 01.01.2007 and until USP(s) resulting from the tender started the provision of that service.
In the determination on the methodology to be applied to calculate CLSU, PT Comunicações, S.A. (PTC)3 was imposed the obligation to convey to ICP-ANACOM preliminary CLSU values for 2007 to 2009 according to the methodology defined by this Authority, as well as all relevant information used in the calculation.
Being incumbent on ICP-ANACOM to ensure that CLSU values are audited, as well as to approve CLSU values under paragraph 4 of article 96 of ECL, the Regulatory Authority awarded to SVP Advisors, S.L.4 the audit of estimates presented by PTC on 28.11.2011 for the 2007-2009 financial periods, and later, the audit of recast CLSU estimates for the 2007-2009 period, as submitted by PTC on 28.06.20135.
Upon conclusion of the referred audits, ICP-ANACOM, by determination of 19.09.2013 and taking into account results achieved and the declaration of conformity issued by auditors as regards CLSU estimates, approved the last accounts presented by PTC, on 28.06.2013, laying down final CLSU values for the 2007-2009 financial periods, as shown in the following table6.
|
|
2007 |
2008 |
2009 |
|
CLSU |
€ 23 584 976.93 |
€ 20 168 431.93 |
€ 23 057 573.48 |
It thus follows that the overall CLSU value for the 2007-2009 financial periods, approved in 2013, amounts to 66 810 982.34 Euros (sixty six million, eight hundred and ten thousand, nine hundred and eighty two Euros and thirty four cents)7.
In this scope, and taking into account possibilities provided for in article 97 of ECL, the Government decided to opt for the sharing of costs among companies providing public communications networks and publicly available electronic communications services on national territory, having submitted for this purpose a Draft Law to the Parliament.
Law No. 35/2012, of 23 August (hereinafter Fund Law) was thus approved, establishing the Compensation Fund for the Electronic Communications Universal Service and setting out the criteria for sharing the net costs of the universal service actually calculated among companies providing public communications networks and publicly available electronic communications services.
According to article 6 of the referred law, the fund is intended for the financing of CLSU determined in the scope of the USP designation tenders, as well as for the financing of CLSU concerning the period before the tender designation of the USP.
Article 17 of the Fund Law establishes that the Fund must be called to compensate CLSU incurred until the provider or providers designated by tender start(s) the provision of the universal service, where the following requirements are met, which also result from ECL (paragraph 1 of article 97):
“a) Evidence exists of net costs, further to an audit, that are deemed to be unfair by ICP-ANACOM, according to paragraph 1 a) and paragraph 2 of article 95 and articles 96 and 97 of Law No. 5/2004, of 10 February, as amended and republished by Law No. 51/2011, of 13 September;
b) The universal service provider requests of the Government compensation of costs referred to in the preceding point.”
Under paragraph 4 of this article, the USP must request of the Government the compensation for CLSU that are approved further to the audit within at least five days from notification of the final decision of approval by ICP-ANACOM of the amount of the referred costs, paragraph 5 providing that compliance with obligations referred to in the preceding paragraphs, within the time-limits established therein, are deemed to be a requirement for the financing of CLSU incurred in the period preceding the designation by tender.
PTC was notified of the final decision on the approval of CLSU for 2007-2009 on 20.09.20138, having requested the respective compensation of the Government, by communication dated 26.09.2013, within the time-limit set out in paragraph 4 of article 97 of the Fund Law. The Government informed ICP-ANACOM of this fact by letter received at this Authority on 16.07.2014.
The same letter also conveyed the order issued by the Secretary of State of Infrastructures, Transports and Communications as regards PTC’s request and the establishment of a compensation fund for the universal service, as follows:
“I agree with the granting of the application presented by PT Comunicações, S.A. on 26.09.2013, and with the call on the compensation fund for the financing of net costs of the universal service for the 2007-2009 period, under the terms and for the reasons set out therein. The matter is now to be referred to the MEF, for all due purposes, the ME being informed thereof.”
The two requirements defined in article 17 of the Fund Law to call the compensation fund - existence of CLSU, further to the audit, which were approved and deemed by the Regulatory Authority to be unfair, and request by PTC to the Government for compensation for CLSU approved by ICP-ANACOM on 19.09.2013, within at the most 5 working days from notification of the final decision - have thus been met.
Under article 18 of the Fund Law, companies providing public communications networks and/or publicly available electronic communications services on national territory are required to make a contribution to the compensation fund, an extraordinary contribution being required for this purpose.
This decision implements the provision in the Fund Law, specifically as regards the extraordinary contribution provided for in article 18, concerning compensation for CLSU for the period preceding the tender designation of the USP, which had been approved by this Authority in 2013 and which refer to CLSU for 2007-2009.
With the approval of the respective Draft Decision (DD), the provision in paragraph 4 of article 11 of the referred Law is complied with, which is applicable by reference provided for in paragraph 3 of article 19, which requires that the list with the following information is submitted to a prior hearing, under the Administrative Procedure Code:
a) Bodies required to contribute to the compensation fund;
b) Eligible turnover for calculation of contributions due to the compensation fund;
c) Amount of contributions due by each body, plus compensatory interest due under paragraph 7 of article 11 of the mentioned law, if any;
d) Amount of compensation to be paid to the USP;
e) Any justified corrections and adjustments, namely in accordance with data collected as regards the actual eligible turnover achieved, where appropriate.
The DD was submitted to the prior hearing of bodies required to contribute to the compensation fund, under articles 100 and 101 of the Administrative Procedure Code, for 10 working days. The setting or changing of values concerning the eligible turnover, further to audit or verification undertaken by ICP-ANACOM, was also subject to a prior hearing for the same time period.
Timely comments were received from Companhia I.B.M. Portuguesa, S.A. (Companhia IBM), MEO - Serviços de Comunicações e Multimédia, S.A. (hereinafter MEO9) - this company previously submitted a request for information, having ICP - ANACOM replied that in the course of a prior hearing the Authority would not take a view on the subject -, NOS Açores Comunicações, S.A. (NOS Açores), NOS Comunicações, S.A (NOS), NOS Madeira Comunicações, S.A. (NOS Madeira), ULTRASERVE - Consultoria e Apoio Empresarial, Lda. (Ultraserve), and Vodafone Portugal - Comunicações Pessoais, S.A. (VODAFONE).
Comments from Maritime Communications Partner, AS, failed to be received in time, and as they were untimely, they could not be considered in the prior hearing report.
Remaining companies said nothing, and it is deemed that, having been notified for this purpose, they opted not to comment in the scope of the prior hearing.
1 Law No. 5/2004, of 10 February, as amended and republished by Law No. 51/2011, of 13 September, and later amended by Law No. 10/2013 of 28 January, by Law No. 42/2013 of 3 July and by Decree-Law No. 35/2014, of 7 March.
2 It must be stressed that subsequently to this decision, other decisions with an impact on the methodology employed to calculate the CLSU were taken, namely:
- Determination of 29.08.2011, which partly upheld the complaint lodged by PTC regarding the determination on the methodology employed to calculate the CLSU, so as to use prices effectively charged to determine unprofitable areas and unprofitable customers living in profitable areas, as well as to calculate CLSU concerning unprofitable areas/customers.
- Determination of 25.11.2011 on the application of the price-elasticity effect for the segment concerning retirees and pensioners (having been decided in this determination that the elasticity value to be considered for the purpose of CLSU calculation should be -0.1);
- Determination of 12.10.2012, which implemented the concept of "abnormally high access costs", so as to determine unprofitable customers living in profitable areas, and thus to calculate CLSU;
- Determination of 20.06.2013, which approved the final decision on the results of the audit of PTC’s CLSU for the 2007 to 2009 financial years.
3 On 2014.12.29 the merger by means of acquisition of MEO - Serviços de Comunicações e Multimédia, S.A. into PT Comunicações, S.A. was registered, having the company resulting from this merger been renamed as from this date MEO - Serviços de Comunicações e Multimédia, S.A..
4 After being awarded the audit contract, SVP changed its name to AXON Partners Group Consulting S.L..
5 The audit was undertaken by AXON in collaboration with Grant Thornton & Associados, SROC, Lda. It is recalled that the need for a second audit resulted from a provision established in ICP-ANACOM’s determination of 20.06.2013, according to which PTC was ordered to resubmit new CLSU estimates for 2007-2009 so as to reflect amendments made to PTC’s CAS for those years, as well as determinations in point 1 e) and 1g) of the referred decision, as regards the consideration of one-off installation costs/revenues in an annualized fashion and the correction in the area model concerning the number of access lines. The second audit was thus aimed at verifying whether recast values complied with ICP-ANACOM’s decisions included in the referred determination of 20.06.2013.
6 This final decision was preceded by the respective DD, which was submitted to the prior hearing of interested parties and to the general consultation procedure.
7 As results from the sum of values for each year. In the declaration of conformity of auditors concerning audits for the years concerned, the value set out for the three years is 66 810 982.35 Euros, the 1 Euro cent difference in the overall value compared to the sum of individual values resulting from the use of such individual values without any rounding adjustments.
8 PTC received this communication on 23.09.2013.
9 As referred earlier, this is the corporate name adopted by the company that results from the merger by means of acquisition of MEO - Serviços de Comunicações e Multimédia, S.A., into PT Comunicações, S.A..
