ICP - Autoridade Nacional de Comunicações e CTT - Correios de Portugal, S.A. (ICP - National Communications Authority and CTT - Correios de Portugal, S.A.)
Universal postal service price convention
Between the parties:
a) ICP – NATIONAL COMMUNICATIONS AUTHORITY, hereinafter referred to as ICP –ANACOM;
b) CTT - CORREIOS DE PORTUGAL, S.A., hereinafter referred to as CTT;
Pursuant to article 14 of Law no. 102/99, of 26 July, as amended by Decree-Law no. 116/2003, of 12 June, and by Clause 24 of the Universal Postal Service Concession Agreement, signed on 1 September 2000, as amended on 9 September 2003 and on 26 July 2006, the following Convention is hereby agreed, and shall be governed by the following articles:
SECTION I
Scope, principles and definitions
Article 1
Scope of the Convention
This Convention governs and defines the price-setting rules concerning services pertaining to the universal postal service provided by CTT, covering the following services:
a) Reserved postal services;
b) Non-reserved postal services pertaining to the universal service.
Article 2
Principles
1 - The pricing system of the services covered by this Convention complies with the principles of cost orientation, transparency, non-discrimination and uniformity as regards price application.
2 - Within the scope of the universal postal service provision, the application of the principle of cost orientation is carried out progressively, so as to allow for a gradual balance of tariffs and to ensure the accessibility of prices.
3 - In order to ensure compliance with the principles provided for in the paragraphs above, CTT undertake:
a) To maintain a cost accounting system that will allow for the calculation of costs associated with each service and, within a service, costs associated with the several service provision forms and costs associated with the different production process stages (clearance, sorting, transport and distribution);
b) To amend the cost accounting system, in accordance with duly substantiated recommendations provided by ICP-ANACOM, namely those arising from audits made to the cost accounting promoted by this Authority;
c) To publish in an appropriate manner, including by making available in a specific address of CTT’s website, and to regularly supply users with information on the conditions for the application of tariffs covered by this Convention as well as on the respective discounts.
Article 3
Definitions
For the purposes of this Convention, the following definitions shall apply:
a) Concession Agreement – universal postal service concession agreement entered into between the Portuguese State and CTT, on 1 September 2000, pursuant to Decree-Law no. 448/99, of 4 November, as amended on 9 September 2003 and 26 July 2006, pursuant respectively to Decree-Law no. 116/2003 of 12 June and Decree-Law no. 112/2006 of 9 June;
b) Postal Parcels – packages of a small size comprising merchandise or objects with or without commercial value, the weight of which does not exceed 20 Kg;
c) Item of Correspondence – communication in written form on any kind of physical medium to be conveyed and delivered at the address indicated on the item itself or on its wrapping, including addressed advertising;
d) Postal Item – includes items of correspondence, books, catalogues, newspapers and other periodicals, and postal parcels;
e) Postal Service – the activity comprising clearance, sorting, transport and distribution of postal items;
f) Universal Postal Service – comprises a postal service for delivery of items of correspondence, books, catalogues, newspapers and other periodicals up to 2 Kg and postal parcels up to 20 Kg, as well as a delivery service of registered items, and a delivery service of insured items, both at national and international level;
g) Reserved Services – services provided exclusively by the universal service provider, including the provision of the following services:
1) Postal service of delivery of items of correspondence, including addressed advertising whether by express delivery or not, the price of which is lower than two and a half times the public tariff for sending first weight step correspondence of the fastest standardised category, provided that the weight thereof does not exceed 50 g, both at national and international level;
2) Postal service of delivery of registered items and insured items, including services concerning legal summons and notification by post, within the same price and weight limits referred in the preceding point of this definition, both at national and international levels;
d) Non-reserved services pertaining to the Universal Postal Service – include the provision of the following services:
1) Postal service of delivery of items of correspondence, including addressed advertising, whether by express delivery or not, the weight of which is equal to, or more than, 50 g and does not exceed 2 Kg, or, where the weight is lower than 50 g, the price of which is equal to, or more than, two and a half times the public tariff for sending first weight step correspondence of the fastest standardised category, both at national and international levels;
2) Postal service of delivery of books, catalogues, newspapers and other periodicals not exceeding 2 Kg, both at national and international level;
3) Postal service of delivery of postal parcels not exceeding 20 Kg, both at national and international level;
4) Postal service of delivery of registered and insured items, including services concerning legal summons and notification by post, the weight of which is equal to, or more than, 50 g or the price of which is equal to, or more than, two and a half times the public tariff for sending first weight step correspondence of the fastest standardised category, both at national and international level.
i) Tariff – price list applicable for a specific period of time for the use of the services referred in this Convention and related to the different service provision methods.
j) Discounts and special prices – reduction of prices which result from tariffs in force, pursuant to article 7.
k) CPI (Consumer Price Index) – level of inflation officially expected for each year by the Government and referred to as such in the State Budget Report for each year. Should a break be referred to in such document, the average point of that break will be considered. Should technical difficulties arise when calculating this value, namely as far as interpretation is concerned, it is incumbent upon ANACOM to provide the necessary clarification.
l) CPI adjustment factor (CPIAF) – corresponds, in 2008, to the difference between the inflation value for 2007, published by the INE, and the level of inflation officially expected for 2007 by the Government and referred to as such in the State Budget Report for 2007. In 2009 and 2010, it corresponds to the difference between the inflation value foreseen in the State Budget Report of a given year for the previous year and the inflation value expected for the previous year pursuant to point k). In case the State Budget Report of a given year fails to mention the inflation value foreseen for the previous year, this value shall be replaced by the value, in September of the referred previous year, of the average variation of the consumer price index in the last twelve months, published by the INE.
SECTION II
General pricing rules
Article 4
Obligations of CTT
CTT undertake to comply with the rules contained in this Convention, and shall not, without prejudice to article 6, establish a higher pricing than that which results from the application of these rules.
Article 5
Price Application
1 - CTT must report to ANACOM, in writing, the price of each postal service comprised in the universal service, in accordance with the rules of this Convention, with an advance notice of at east 30 working days from the date of entry into force thereof.
2 - In addition to the report referred to in the preceding paragraph, CTT must submit to ANACOM documentary evidence of the fulfilment of maximum price variations required under this Convention and of the compliance with principles set out in paragraph 1 of article 2.
3 - Should ICP-ANACOM fail to approve the prices of reserved services, reported pursuant to paragraphs 1 and 2, this Authority shall notify CTT of its decision and grounds thereof, within a 15-working-day deadline from the date of reception of the report provided for in paragraph 1.
4 - The prices of reserved services shall take effect on the date provided for, where within the deadline referred to in the preceding paragraph, ICP-ANACOM does not issue a notice to the contrary.
5 - The prices of non-reserved services shall take effect on the date provided for, ICP-ANACOM being entitled to alter those prices at any time, stating therefor reasons based on the compliance with principles set out in article 2, and taking also into account the levels of quality of service achieved.
6 - The prices for each of the services pertaining to the universal service must be disclosed by CTT at least 10 working days in advance of the respective date of entry into force, through the appropriate means for the conveyance of information both to users in general and to the respective market segments.
7 - ICP-ANACOM is entitled to reduce the deadlines provided for in paragraphs 1 and 6, upon reasoned request submitted by CTT.
Article 6
Adaptation of Agreed Prices to the Specific Quality of Services
1 - CTT are entitled to establish prices above those resulting from this Convention where the respective services are provided with a better level of quality, specificity or functioning compared to the level usually provided by CTT.
2 - The prices referred to in the previous paragraph shall be established in accordance with the principles comprised in paragraph 1 of article 2 and pursuant to the pricing rules comprised in article 5.
Article 7
Discounts and Special Prices
1 - CTT are entitled to practice discounts and special prices on prices of services covered by this Convention, where economic reasons, namely as far as economies of scale are concerned, so justify.
2 - The application of these discounts and special prices shall comply with the principle of cost orientation, taking into account the avoided costs as regards the standardised service that provides all operations concerning clearance, sorting, transport and distribution of postal items, as well as with the principles of transparency and non-discrimination towards all customers who meet the same requirements and conditions.
3 - CTT must submit to ANACOM the discount and special price list that applies to the services of this Convention, which shall be attached to the price report referred to in paragraph 1 of article 5.
4 - The application of these discounts and special prices shall comply with article 5.
SECTION III
Reserved Postal Services
Article 8
Price Regime
1 - The weighed average price variation of reserved postal services shall not exceed in 2008 (CPI+CPIAF)-0.3%, in nominal terms.
2 - The weighed average price variation of non-reserved postal services shall not exceed in 2009 and 2010 (CPI+CPIAF)-0.4%, in nominal terms.
3 - The price of a postcard shall not exceed that of an item of correspondence of the first weight step correspondence of the standardised format.
4 - The weighed average variation is calculated using the price variation weighing factor of each reserved postal service price, in its several formats and weight steps, the proportion of the gross invoicing associated with each format and weight step, in the total amount of the gross invoicing of the reserved postal services, both related to the second calendar year prior to that for which the variation is calculated.
5- The price variation provided for herein depends on the compliance with the levels of quality of service comprised in the Universal Postal Service Quality Convention, where the compensation mechanism for non-compliance with these levels, provided for in point 2.1 of the Annex thereto, is applied.
Article 9
Types of Services
1 - For the purpose of application of the price-setting rules comprised in article 8, the following types of postal services shall be considered, under point g) of article 3, in its several formats, weight steps and provision methods:
a) Postal service for delivery of items of correspondence as Priority Mail, Non-priority Mail, Green Mail and International Economical Mail;
b) Postal service for delivery of items of correspondence of addressed advertising, as Direct Mail;
c) Postal service of delivery of registered and insured items;
d) Services concerning legal summons and notification by post.
2 - Where CTT creates or alters the types of postal services, the inclusion thereof in the price regime comprised in article 8 shall be agreed between the parties, being subject to an addendum to this Convention.
3 - For the purpose of the preceding paragraph, the creation or alteration of the types of postal services shall be reported to ANACOM in advance.
SECTION IV
Non-Reserved Postal Services pertaining to the universal service
Article 10
Price Regime
1 - It is incumbent upon the CTT to determine prices of non reserved services comprised in the universal service, being incumbent upon ICP-ANACOM to monitor such prices pursuant to paragraph 5 of article 5.
2 - The creation or alteration by CTT of the types of non reserved services comprised in the universal service shall be reported to ANACOM at the time of the communication of the respective prices pursuant to paragraph 1 of article 5.
Section V
Final provisions
Article 11
Calculation of deadlines
1 - It is incumbent upon ICP-ANACOM to assess whether the documentary evidence referred to in paragraph 2 of article 5 of this Convention is duly reasoned. Should ICP-ANACOM consider that the document submitted by CTT clearly fails to provide the required grounds, this Authority shall convey this information to CTT within five working days from date the documentary evidence is received. In such cases, the deadline referred to in paragraph 3 of article 5 shall be calculated from the date the new reasoned documentary evidence is received.
2 - Without prejudice to the preceding paragraph, the calculation of the deadline provided for in paragraph 3 of article 5 shall be suspended on the date the CTT receives from ICP-ANACOM a request for clarification or additional data, and shall only be resumed on the day following that in which the reply of CTT is received.
Article 12
Communications
1 - Communications provided for in article 11, as well as other communications between the parties provided for herein, shall be made in writing and delivered:
a) personally, provided this is evidenced by protocol, or;
b) by fax, provided this is evidenced by an “uninterrupted transmission report”, or;
c) by registered post with acknowledgement of receipt.
2 - For the purposes of this Convention, the following addresses and fax numbers shall be deemed as the domiciles of the parties:
a) ICP-ANACOM:
address - Av. José Malhoa, n.º 12, 1099 - 017 Lisbon
Fax: 21 721 10 02;
b) CTT:
address - Rua de São José, n.º 20, 1166 - 001 Lisbon
Fax: 21 322 77 34;
3 - The parties may change the domiciles referred to in the previous paragraph, provided that a prior notice is given to the other party.
4 - The communications provided for are deemed to take place:
a) On the day they are delivered personally or by fax, where this occurs between 09.00 a.m. and 5:30 p.m., or on the following working day, where the delivery takes place outside that time period;
b) On the date of receipt by the addressee, stated in the acknowledgement of receipt ;
c) Within one working day from the date contained in the acknowledgement of receipt, where the date of receipt by the addressee may not be determined, namely, on account of omission, illegibility or loss of the acknowledgement of receipt.
Article 13
Settlement of disputes
Any disputes between the Parties as regards the execution, interpretation, application or integration of this Convention and decisions taken under it shall be settled pursuant to the Concession Agreement.
Article 14
Taking effect
1 - This Convention shall take effect as from 1 January 2008, and shall be in force for a three-year period, being renewable for successive one-year periods of time, except where terminated by either party, at least 60 calendar days in advance of the date of expiry.
2 – Without prejudice to the preceding paragraph, parties are entitled to revoke the Convention by agreement at any time.
3 - Where the Convention is terminated or revoked by agreement, pursuant respectively to paragraphs 1 and 2, the prices arising therefrom and the compensation mechanism for non-compliance with levels of service mentioned in article 8, paragraph 5, remain in force, until the standards established in a new Convention come into force.
Lisbon, 10 July 2008
ICP - National Communications Authority
CTT - Correios de Portugal, S.A.
