NOVIS offer of 7.12.2004

10.12.2004 | Draft decision
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By determination of 10 December 2004, the draft decision of ANACOM on the service offer of access to the public telephone network at a fixed location and of telephone service at a fixed location, submitted by NOVIS on 7 December 2004, was approved.

This determination has been submitted to the prior hearing of NOVIS and OPTIMUS, pursuant to articles 100 et seq. of the Code of Administrative Procedure, a 10-working day time limit having been set for these companies to assess the subject in writing. The determination has also been subject to the general consultation procedure, pursuant to paragraph 2 of article 20 of Law no. 5/2004 of 10 February, the same time limit having been established for presentation of observations.

 

Determination

I – The Facts

1. On 7.12.2004; NOVIS presented to ANACOM, pursuant to article 21 of Law no. 5/2004, of 10 February, a communication regarding the beginning of the offer of service of access to the public telephone network at a fixed location and of telephone service at a fixed location.

As declared at the time, this is a fixed communications service that:

- Associates access numbers at the level 2 of the NNP;
- Ensures number portability within that range;
- Guarantees to customers a coverage within a circle of a radius of around 2000 metres, as with other wireless technologies;
- Charges retail prices which are close to the prices of the current telephone service available at a fixed location;
- The national territory is the geographical scope for the provision of the service.

2. On 26.11.2004, ANACOM decided, in the light of the so-called Optimus Home service, presented thereto on 12.11.2004 by NOVIS, the following:

1º To determine upon NOVIS the immediate prohibition of the commercial operation of the so-called «Optimus Home» service and the adoption of measures that would prevent the continuity of its publicity by any means to the general public;

2º To determine upon NOVIS that, within 5 days at the most, it would notify subscribers of the termination of the referred service, in compliance with the time limit provided for in point c) of paragraph 1 of article 39 of Law no. 5/20004, of 10 February.

3. This determination was based, naturally, on the comprehensive analysis of the features of the service, as presented by the undertaking, having ANACOM reached the conclusion that such service could not be provided in the numbering “2” range of the National Numbering Plan.

In short, the characteristic features of the «Optimus Home» service communicated to ANACOM and the conditions publicly disclosed were as follows:

- NOVIS identified the service provided as fixed-mobile convergent. In addition, it declared that it used geographical numbers of the telephone service with fixed access of the national numbering plan, within the ITU – T Recommendation E.164;

- The access component was supported in the GSM OPTIMUS network (adherent clients disposed of a mobile terminal that used that network – on the market at €69,90 (VAT included), sum which may comprise up to €25 in calls) and the interconnection access was supported in the NOVIS fixed commuted network, calls made and received being forwarded through the latter, as it is interconnected with the remaining operators;

- The adherent client was charged a retail price (VAT included) of 0,05€ per minute, for calls to the fixed network, of €0,30 per minute, to mobile networks, and a price which varied from €0,17 to €1,20 per minute, for international calls;

- There was no line rental charge connected to the service and two payment modalities were available: pre-payment, through a recharging system which must add up, at the end of every 2 months, €25,00; post-payment, with a monthly charge the consumption of which should add up to  €12,50; any unconsumed amount could be used in the following 6 months;

- Any user who made a call to a number of this service would pay the same price paid to a call to the fixed network, and a client of another fixed network could “migrate” to the «Optimus Home» service, maintaining, by means of portability, the current telephone number;

- The terminal mobility was limited to the National Numbering Plan geographical circumscription to which the respective access number corresponds (e.g. the mobility of the prefix 21 was restricted to the geographical area of Lisbon);

- NOVIS, the declarant of the service, was the entity with which clients would conclude service contracts.

II - Analysis

Having due regard to the features of the service communicated to this Authority on 7.12.2004, ANACOM decided to analyse the matter in four strands, namely: (i) the use of frequencies; (ii) the use of numbers; (iii) transparency of information provided to users; (iv) procedural matters.

The use of frequencies

4. The service is supported in the NOVIS fixed network, the GSM network of OPTIMUS being the local access component, ensuring at the same time a  wireless telephone terminal equipment.

The GSM OPTIMUS mobile network uses the frequencies allocated for the provision of the mobile terrestrial service (as prescribed in the respective allocating license, in force pursuant to paragraph 4 of article 121 of Law no.  5/2004, of 10 February).

According to the statutory instruments in force regarding radioelectric licensing of networks and stations, the MTS/GSM is defined as “2nd generation system networks constituted by base stations of a determined location and by mobile stations, operating in frequency bands allocated for that purpose” (Notice no. 168, of 23 July 2003, published under Decree-Law no. 151-A/2000, of 20 July).

At the level of usage and utility for the end user, the product presents a low mobility, and is close (yet not identical) to wireless solutions, in view of the fact that NOVIS intends to ensure to consumers a coverage within a circle of a radius of around 2000 metres.

5. As mentioned above, the use of GSM frequencies in the access network and at a fixed location is under consideration, and this may be legitimately achieved through an agreement between two undertakings (in this case, between OPTIMUS and NOVIS).

In the regulatory framework in force, the concept of “access” means “the making available of facilities and/or services, to another undertaking, under defined conditions, on either an exclusive or non-exclusive basis, for the purpose of providing electronic communications services, namely covering access to network elements and associated facilities (…); access to fixed and mobile networks (…) – as determined under point a) of article 3 of Law no. 5/2004.

Undertakings providing electronic communications networks and services are entitled “to negotiate interconnection with and obtain access to or interconnection from other providers of publicly available communications networks and services” (point a) of article 22) and may also “negotiate and agree between themselves technical and commercial arrangements for access and interconnection” (article 62).

It is under this perspective that the agreement between two undertakings must be understood, one of them supplying the other with the available capacity of its GSM network, for the provision of electronic communications services, a solution which of course should not be mistaken for the interconnection relationships between undertakings.

ANACOM takes the view that the emergence of alternatives for the local access contributes towards the development of competition and the increase of the diversity of available offers to users, and as such, if access agreements between undertakings provide the use of means which allow the end user to be reached, nothing may, or should, be invoked to hinder them, provided that the applicable rules have been safeguarded.

The use of the GSM network in the local access is, in a way and in the present case only as regards the provision of voice services, an alternative to the classical telephone networks that use twisted metallic pairs. The current alternative means are the cable television networks that provide telephone services, mobile cellular networks which were adapted to the offer of services at fixed locations and other wireless networks”, as defined in the explanatory note to the Commission Recommendation on relevant markets, quoted in the Determination of ANACOM of July 2004, on the definition of markets and SMP assessment in the narrowband markets access to the public telephone network at a fixed location.

6. It must be considered also that the possibility of OPTIMUS supplying network capacity to third parties, in this case to NOVIS, allowing its access network to provide a service with these features, implies that ANACOM authorizes the use of GSM frequencies for that purpose. In fact, the GSM frequencies of OPTIMUS were allocated thereto for the provision of the so-called mobile terrestrial service, which is an offer, to the general public, throughout the national territory, of a mobile service – diversely, OPTIMUS now wishes these frequencies to be engaged by another undertaking which shall provide services on a well defined geographical location.

It must be considered, however, that at the level of radiocommunications, frequencies are still used exclusively for GSM systems, pursuant to settled harmonization at European level (Council Directive 87/372/EEC, of 25 June).

The engaging of frequencies, shall not, in any case, unbind OPTIMUS from its obligations as provider of a mobile service, such obligations maintaining their full effect.

In effect, as the effective and efficient use of frequencies is a fundamental principle in matters of management of radioelectric spectrum (article 15, paragraph 2, point c) of Law no.  5/2004), ANACOM feels that the engaging of GSM frequencies to this additional usage shall mean a more intense use of frequencies, a resource which is scarce, and thereby that principle is fulfilled.

7. Lastly, it must be referred that the use of terminals in a scope of a service with the features presented to ANACOM is subject to a fee with the code 22107, included in Administrative Rule no. 1047/2004, of 16 August.

The use of numbers

8. As referred above, the service is presented with a defined geographic base (and considerably more restricted than the Optimus Home service presented to ANACOM in 12.11.2004), which a priori does not prevent geographic numbers from being associated thereto.

According to the description made by NOVIS, the service presents some mobility – yet low – which derives from the fact that the connection to the end user it not based on a (physical) access point of the switched public telephone network. However, it is in fact subject to a well defined geographic area.
Being the NNP an important regulatory instrument, it must also facilitate new offers which may contribute towards the regulatory objectives to be pursued by ANACOM. Under the law, it is incumbent upon the regulatory authority to define the guidelines and general principles of the National Numbering Plan, as well as to manage that plan according to the principles of transparency, effectiveness, equality and non-discrimination. The NNP management explicitly includes the establishment of the conditions for allocation and assignment of national numbering resources – article 17, paragraph 2, points a) and b) of Law no.  5/2004.

9. As the geographical basis for the service, as presented by NOVIS, is the one which “ensures coverage for consumers within a circle of a radius of around 2000 metres”, one should not exclude that the service may be comprised in the numbering “2” range of the NNP, provided that a fundamental condition is fulfilled, namely, that the mobility associated to the terminal is restricted to the inevitable limit in order to ensure the access at a fixed location, which in many circumstances shall be below that radius.

The solution presented by the undertaking, as in other fixed network solutions, provided the client with a wireless telephone terminal equipment, the access being made available by the OPTIMUS GSM network. Thus, the provided service shall present the features of the services provided within the numbering “2” range of the NPP where it is designed with similar mobility features.

In short, ANACOM takes the view that in terms of mobility, the service presented by NOVIS should be designed where possible in the light of the typical mobility provided by the available technologies in the fixed network systems, in order for the usage of the numbering “2” range not to be void.

Transparency of information provided to users

10. It is important to safeguard that it must be clear to users that the service under consideration is not identical to the voice services traditionally provided through physical means at a fixed location, as are the switched public telephone network and the cable distribution network, or even by other radioelectric means, such as the FWA.

Users shall therefore receive transparent information so that they clearly perceive in which ways this service is different from the classical services, for example in terms of indoor coverage or as to audio quality.

Procedural matters

11. Pursuant to paragraph 2 of article 20 of Law no. 5/2004, of 10 February, the amendments of conditions, rights and procedures concerning the pursue of the activity, including the rights of use, are subject to the general consultation procedure referred to in article 8, and interested parties, namely users and consumers, shall be allowed a sufficient period of time to express their views on the proposed amendments, which shall be no less than 20 days, except in exceptional circumstances duly justified.

ANACOM is of the opinion that this is an amendment to conditions applicable to the right of use, this being the aspect which must be redesigned in order for the effective service provision to be carried out, and thus this process should be a swift one, also having regard to the fact that this offer is a follow-up to the launching of the Optimus Home service, which was prohibited by this Authority on 26.11.2004.

In addition, several interested parties have submitted to ANACOM their observations on matters concerning that service, and as such matters are again approached in the scope of this consultation, ANACOM deems justified the establishment of a shorter time-limit than the one determined by law.

III – Decision

Therefore, the Board of Directors of ANACOM, in exercising the assignments conferred thereupon pursuant to points b), c) f) and h) of paragraph 1 of article 6 of its Statutes, approved pursuant to Decree-Law no. 309/2001 of 7 December, in the pursue of regulation objectives provided for in points a) and c) of paragraph 1, point d) of paragraph 2 and point d) of paragraph 4, all of article 5 of Law no.  5/2004, of 10 February, and pursuant to article 15, paragraph 1, to article 17, paragraph 2, points a) and b), to article 20, to article 32, paragraph 2 and to article 34, paragraph 2, all of that same Law, hereby determines:

1. That the use of GSM frequencies of the mobile terrestrial network of OPTIMUS over the network of local access for the provision of voice services at a fixed location by NOVIS is allowed, with the typical features of the service as presented to ANACOM on 7.12.2004;

2. That the right to use the numbering “2” range of the national numbering plan (NNP) is acknowledged within the scope of that service, provided that the mobility associated to the terminal is restricted to the inevitable limit in order to ensure the access at a fixed location, having regard to the technology used;

3. To submit NOVIS to the presentation  to end users of clear and transparent information on the referred service, namely clarifying the following items:

a) Service coverage zone, including possible limitations at indoor accessibility level;
b) Impact at the level of caller location for calls made to the single European emergency call number (112);

4. To submit the above determinations to the prior hearing of NOVIS and OPTIMUS, pursuant to articles 100 et seq. of the Code of Administrative Procedure, as well as to the general consultation procedure, pursuant to paragraph 2 of article 20 of Law no. 5/2004 of 10 February, the time limit for presentation of observations being set at 10 working days.

5. To subordinate the effective provision by NOVIS of the service under consideration to the decision taken following procedures mentioned in the preceding paragraph.

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