Under article 95 of the Electronic Communications Law (ECL)1, where the National Regulatory Authority (NRA) considers that the provision of universal service (US) may represent an unfair burden on the respective providers, it shall calculate the net costs of US obligations (CLSU - custos líquidos das obrigações do serviço universal) in accordance with one of the following procedures:
a) Calculating CLSU, taking into account any market benefit which accrues to providers;
b) Making use of CLSU identified in the scope of a designation mechanism provided for in ECL.
As such, in compliance with that article, as well as with article 96 of the same Law, Autoridade Nacional de Comunicações (ANACOM) approved on 09.06.2011 a decision on the concept of unfair burden, as well as a decision on the methodology of calculation of CLSU.
It was determined in the scope of those decisions that the US provision could entail an unfair burden as from 2007 (inclusively), having been defined the methodology of calculation of CLSU to be applied until universal service providers (USP) designated following a tendering procedure start operation2.
The USP tender designation process was concluded in 2014 with the signature of contracts between the Portuguese State and designated USP, which occurred on:
- 19.02.2014 - signature of a contract between the Portuguese State and ZON TV Cabo Portugal, S.A., for the US provision of connection to a public communications network at a fixed location and of publicly available telephone services in geographic zone 3 - South and Islands;
- 19.02.2014 - signature of a contract between the Portuguese State and Optimus Comunicações, S.A., for the US provision of connection to a public communications network at a fixed location and of publicly available telephone services in geographic zones 1 (North) and 2 (Centre);
- 20.02.2014 - signature of a contract between the Portuguese State and PT Comunicações, S.A. (PTC) , for the US provision of public pay-phones in all geographic zones;
- 20.02.2014 - signature of a contract between the Portuguese State and PTC3, for the US provision of a comprehensive directory and of comprehensive directory enquiry services throughout the national territory.
The provision of services under contracts signed in 2014 with USP started on 1 June 2014, as regards the component of provision of connection to a public communications network at a fixed location and of publicly available telephone services, on 9 April as regards the provision of public pay-phones and on 20 February as regards the provision of a comprehensive directory and of comprehensive directory enquiry services.
Bearing in mind that the CLSU calculation methodology was developed on a year-on-year basis, based on annual results of MEO’s cost accounting system, and given the dates on which the above-mentioned services started operation, which implied that MEO, in 2014, provided the US under the regulatory framework for the period preceding the USP tender designation for only a part of the year, the CLSU calculation methodology must be adapted to this reality.
In this context, ANACOM approved on 04.06.2015 a Draft Decision (DD) on the methodology for calculating the net costs of the universal service to be applied in 2014, which was submitted to a general consultation as well as to the prior hearing of interested parties for 20 working days.
Once the referred procedure was concluded, three timely contributions were received, which were summarized and analysed in the public consultation and prior hearing report, deemed to be an integral part hereof.
1 Law No 5/2004, of 10 February, as amended and republished by Law No 51/2011, of 13 September, and subsequently amended by Law No 10/2013, of 28 January, Law No 42/2013, of 3 July, Decree-Law No 35/2014, of 7 March and Law No 82-B/2014, of 31 December.
2 In this context, the following determinations are also relevant: (i) determination of 29.08.2011, which partially upheld a complaint submitted by PTC and which amended determination of 09.06.2011, so as to use prices actually charged to determine “unprofitable areas” and “unprofitable customers in profitable areas”, as well as to calculate CLSU for unprofitable areas/customers; (ii) determination of 25.11.2011, which defined the price-elasticity of demand to be considered when CLSU are calculated; (iii) determination of 12.10.2012, which implemented the concept of “abnormally high access costs”, so as to determine unprofitable customers in profitable areas and consequently to establish CLSU; and (iv) determination of 20.06.2013, which introduced amendments to the methodology for calculation of CLSU with impact on estimates for years beyond 2009.
3 It should be noted that the merger by acquisition of MEO - Serviços de Comunicações e Multimédia, S.A. into PT Comunicações, S.A. was registered on 29.12.2014, having the company resulting from this merger been renamed as from that date MEO –-Serviços de Comunicações e Multimédia, S.A. Henceforth, reference shall thus be made to MEO, instead of PTC.
