2. Collection of information with MEO

ANACOM requested MEO, by fax dated 28 March 2014¹, that within 15 working days it clarified and submitted information on the following issues:

(a) Price of [BCI²]      [ECI³]

• Detailed and quantitative justification for the reduction of the annual price per channel (from [BCI]     [ECI]  provided for in the Memorandum of Understanding (MoU) to [BCI]     [ECI] defined in contracts concluded in 2012 and 2013), taking into account the total capacity of MUX A, the capacity occupied by each television programme service and the price per Mbit/s provided for in the right of use for frequencies (RUF), by reference to MEO’s proposal.
• Detailed explanation of how the occupation of capacity in MUX A by the Canal Parlamento, in 2013, as well as the expiry of mandatory reservation of capacity by MEO for the shared HD channel, under the terms provided for in the RUF, affected the price charged to television operators.

(b) Revenues in 2012

Provision of elements for validation of revenues, amounting to [BCI]     [ECI], acknowledged in MEO’s CAS for 2012, concerning the DTT service, including:

• Reconciliation of total revenues, including the specific identification of all revenues that make up the overall value, by nature and value.
• Detailed supporting evidence (for example, contracts; agreements; bills) of all revenues discriminated in the preceding paragraph, with the respective reasoning and explanation.
• Information on any revenues in 2010 and 2011 concerning the DTT service.

(c) Costs in 2010, 2011 and 2012

Detailed justification of the value of each cost item included in the CAS in 2010, 2011 and 2012, so as to allow calculations underlying their determination to be replicated, on the basis of main assets, services and labour used, being clearly and specifically identified:

Investments, subsidies and co-payments

• For all equipment and elements that integrate the whole of fixed assets (tangible and intangible) allocated to the DTT service, namely active equipment, radiating systems, shelters, ASI-SDH adaptors, air-conditioning systems, electrical switchboards, towers, IVRs, costs related to the digital broadcasting centre, licenses (such as CAS, HE, encryption software adaptation and full EPG), as well as those related to DTH coverage, transmission network, among others, the following elements must be supplied:

- Gross purchase value.
- Year of purchase.
- Accumulated depreciation.
- Depreciation for the financial year.
- Useful life period.
- Cost of capital.
- Additions and write-offs for each financial year.
- Pseudo-departments and how allocation is made in the CAS (driver).

• Identification of the amount of costs associated to the referred subsidy and co-payment programmes, as well as revenues associated thereto and the way how revenues are considered in the CAS.

Operating costs

• Breakdown according to operating costs of each activity allocated to the DTT service in the CAS, namely customer- and network-oriented direct and joint activities.
• Duly substantiated details and supporting evidence of all operating costs registered for activities and sub-activities, with the mention of the respective allocation driver, taking into account, namely:

- Costs of preventive maintenance of transmitters, power supply equipment and air conditioners.
- Corrective maintenance costs.
- Costs of contracts for maintenance of the Digital Broadcasting Centre.
- Costs of transmitter HW repair contract.
- Costs of existing transmission network occupation and the basis on which such costs were determined.
- Costs of power consumption of equipment engaged to the DTT service.
- Costs of the interior space and tower occupation engaged to the DTT service and the basis on which such costs were determined.
- Costs of DTH coverage.
- Costs of radio spectrum use.
- Staff costs, being clearly identified the number of collaborators directly assigned to the DTT service, broken down by class and by activity involved in this service (for example, commercial area, technical area, customer support and information systems), labour basic cost for each class and any assumptions related to the determination of staff costs, namely other collaborators that may also be related to other services, above elements being also identified in this case.
- Other relevant operating costs.

Others

• Information on the driver for allocation of common elements to different services, such as, for example, towers or other relevant elements.
• Detail of common costs, per value and nature, allocated to the DTT service.

After having requested the extension of the deadline for replying to the information request, which was granted, MEO supplied by letter of 29 April 2014 (and later by letter of 26 May 2014⁴) the requested elements.

Further to a first analysis of date submitted by MEO, it was found that additional clarifications were required, which were requested by fax dated 30 July 2014.

Later, and given that CAS results for 2013 were already available, and the demonstration of the DTT service results failed to be duly broken down, ANACOM requested such data by fax of 21 August 2014, which were submitted by MEO on 1 September 2014.

Having received the requested elements, revenues and costs of the DTT service provided by MEO were analysed, with a special focus on those for 2012, having been examined whether the annual price per channel charged by MEO exceeds costs, that is, whether it is excessive, according to the most recent available costs at the time (2013), in view of the decision on the reassessment of the DTT service price and the need for the analysis of the DTT service market, in the scope of which an obligation for cost-orientation of prices could typically be imposed.