Determination in Respect of the PT/DECO Agreement
1. ANACOM became aware, through the media, of the agreement between PT Comunicações (PTC) and DECO regarding the so-called indemnity to consumers due to the collection of a call “activation fee” during 1998 and 1999.
This agreement arises as result of the sentence given to PTC in a lawsuit where the company was committed to return the amounts collected as “activation fee” during 1999 (sentence of the High Court of Justice dated 7.10.2003).
2. PTC having announced that they would voluntarily reimburse the amount of the “activation fee” and after the concerns disclosed by operators and consumers as to the reimbursement method and conditions, ANACOM, on 3.12.2003, asked for clarifications to this company on the matter in order to find out if PTC behaviour would damage the rights and interests of users and operators.
PTC informed at that time that the reimbursement would be made to residential customers that would provide the necessary data for the calculation of the respective amount, through credit in the telephone invoice and, should the customer be no longer a PTC customer, through vouchers to be used in their stores or through cheque.
3. Later, it was publicly announced the agreement established with DECO aiming to compensate the consumers.
This agreement, as disclosed, establishes, as to the indemnity for the default collection of that rate, the following benefits to consumers:
- Free calls on 15 March, the World Consumer Rights Day, between 9:00 and 24:00;
- Free calls in the fixed network for 13 Sundays, starting on 21st March and ending on 13 June, between 0:00 and 24:00 hours. The calls shall have origin and destination in the PT fixed network (national, regional and local calls);
- Free monthly subscription in September for consumers who benefit from the discount scheme for retired people;
- Allocation of a 25 euro credit to consumers who wish to adhere to the ADSL Internet Service provided by any operator during the period of time beginning on 15 March and ending on the 15 October.
Under the terms publicly disclosed, the users did not have to demonstrate that they were PTC customers on the date the “activation fee” was charged in order to benefit from this so-called compensation. Thus, this may be considered a new PTC offer, to be in force during a limited period of time.
4. PTC, under the terms of the electronic communication regulatory framework, is bound to comply with certain principles, especially, the non-discrimination principle.
Namely, prices applicable to fixed telephone networks and to the fixed telephone service will have to meet the principles of equality, transparency and non-discrimination – article 34 of the Fixed Telephone Service Operation Regulation, approved by Decree-Law no. 474/99, of 8 November, which obligations are still in force pursuant to subsection b) of paragraph no. 2 of article 122 of the Electronic Communications Law – Law no. 5/2004, of February 10.
In accordance with the Bases of the Telecom Public Service Concession, PTC cannot show any preference or exercise discrimination towards any individual or company who apply for the services included in the concession - subsection j) of article 6.
Therefore, the users of networks accessible to the public are entitled to access, under equal circumstances, networks and services offered – subsection a) of paragraph 1 of article 39 of Law no. 5/2004.
5. In 1998 and 1999 PTC had the exclusive operation of the fixed telephone service.
With the liberalization of the FTS access to the market, some PTC customers became customers of the new providers.
The announced terms and conditions, as far as the agreement between PTC and DECO is concerned, clearly violate the non-discrimination principles, since the benefits included thereto are exclusively granted to the current PTC customers, excluding all who are customers of other companies.
The customers who have decided to choose another operator are differently and discriminatorily treated which consequently, damages the development of competition namely because it may drive customers to PTC, aiming to take advantage of those benefits.
Some aspects contained in this agreement may also damage competition in the Internet broadband services market or in other electronic communications services markets.
From another point of view, it is also important to safeguard that PTC is committed to ensure network integrity and emergency calls.
Finally, the costs of this agreement, due to its nature, should not be paid through the regulatory mechanisms in force, otherwise the compensation will be made through the universal service financing mechanisms and through future prices charged by PTC.
Without questioning the legitimacy of the parties in the law suit, and now contracting parties in this agreement, to fulfil their interests, it is the responsibility of ANACOM to safeguard the application of the regulatory principles and electronic communications legal framework.
The intervention of ANACOM is urgent since the application period for the benefits agreed between PTC and DECO will begin next 21st of March.
6. ANACOM submitted to PTC an appropriate methodology to ensure the non-discriminatory treatment of the FTS end users, notwithstanding market competition.
Thus, the Board of Directors of ANACOM, within the scope of its duties foreseen in subsections b), e), f), h) and n) of paragraph no. 1 of article 6 of ICP-ANACOM Statutes, approved by Decree-Law no. 309/2001, of 7 December and competences foreseen in subsections c) and g) of article 9 of those Statutes, decides that:
1. PTC cannot exclude from the scope of the agreement concerning the reimbursement of the “activation fee” signed with DECO, or another one that they may sign in the future with another entity, the customers of the other FTS providers who are in the same circumstances as PTC users to whom said agreement applies.
2. In order to ensure that the customers of other FTS providers may benefit from an equivalent offer, notwithstanding market competition, PTC must create conditions adequate to the other FTS providers.
3. During the period of time related to ADSL service adhesion benefit (15 March to 15 October), PTC shall ensure to all Internet service providers appropriate conditions so that they can ensure equivalent benefits to the consumers who will adhere to the ADSL service through the local loop.
4. The benefits related to free calls should only apply to customers which request to access the PTC FTS was submitted by 15.03.2004.
5. Benefits granted shall not be considered for purposes of calculation of possible universal service net costs or reflected in the cost accounting system for regulatory purposes within the principle of cost orientation.
Pursuant to subsection a) of paragraph no. 1 of article 103 of the Rules of Administrative Procedure, prior hearing to the interested parties shall not take place since decision is urgent.
Complementary information (published in 19.3.2004):
Following ANACOM determination dated 18 March 2004, related to the PT/DECO agreement about the reimbursement of the 'activation fee', this Authority informs that:
1. In order to ensure the non-discriminatory treatment of the FTS end users without prejudice of market competition, all customers (whatever the provider) who wish to benefit from free calls in the fixed network for 13 Sundays, starting on 21 March and ending on 13 June, between 0:00 and 24:00 hours, including the PT Comunicações customers, will have to dial the prefix 1070 in any call;
2. Eligible calls to the prefix 1070 shall be local, regional and national calls;
3. The interested FTS providers shall have to program their stations so as to allow their customers, who are physically connected to their switches, to dial the prefix 1070;
4. PT Comunicações shall not charge the interconnection to the FTS providers for calls made through the prefix 1070, during said time period, whereby the other providers will charge the interconnection to PT Comunicações, as usual;
5. PT Comunicações shall compensate each FTS provider for the loss of net income in the traffic of the same type usually originated on Sundays, in the operator network. The calculation of this estimate shall be based on the average traffic made on February Sundays. For purposes of lost unit income the difference between the retail price and the interconnection price shall be considered, the retail price being the lowest price practised by PTC or by the operator in question, for equivalent calls. ANACOM shall follow this matter, performing audits and other diligences if deemed necessary.
6. During the time period referred to above, as far as the benefit of the adhesion to the ADSL service is concerned (15 March to 15 October), PT Comunicações shall grant all ADSL service providers a credit equivalent to 25 € per each new adhesion to the ADSL service, either made through the “Rede ADSL PT” offer or through the local loop offer. The providers shall inform every customer who will benefit from such credit about the duration of the benefit and about the respective reason.
