Admnistrative Rule no. 346-A/2001, of 6 of April

Published in D.R. number 82 (Series I-B, 1st Sup.) of 6 April 2001

Ministério do Equipamento Social (Ministry of Social Equipment)

Admnistrative Rule

The development of the Information and Knowledge Society is a primordial and transversal objective of the Government for this legislature, a key vector of which is the promotion of the development of digital platforms, in particular that of digital terrestrial television.

In order to attain this objective, the public tender to grant a license for a Digital Terrestrial Television Platform is hereby launched under the terms of Decree-Law no. 381-A/97, of December 30, which defines the access regime to the activity of public telecommunications networks operator and public-use telecommunications service provider.

The digital terrestrial television platform is first and foremost a delivery mechanism for television programmes, but is also undeniably a gateway to an extensive range of interactive services, including television, telecommunications and Information Society services, and will stimulate the production of new types of content at various levels and initiate within this field an irreversible transition towards a digital universe.

The switch-off of analogue transmission of television services is inevitable from a technological, social and economic viewpoint, and will enable radio spectrum resources to bereleased, thus enabling new services to be created that will optimise spectrum use.

In this context the Government considers 2007 to be the target date for switch-off of the present system of analogue television broadcasting, in conditions that will necessarily be evaluated from a dynamic perspective, including consideration of the development of the platform that is to be hereby licensed.
In launching this new platform, priority is placed on strategies directed towards rapid mass-market penetration of digital television services, thus minimising the impact of switch-off, especially on consumers.

Emphasis should also be drawn to the imposition of the obligation on the licensed entity to transport and transmit, simultaneously and integrally, the present four national television channels, as well as the two regional channels in the respective Autonomous Regions, and to provide these channels free-of-charge to the general public.

In relation to the Autonomous Regions, minimum and preferential coverage requirements have been established, on the assumption that the system of digital terrestrial television broadcasting will make it possible to guarantee coverage of the Regions, and ensure universal distribution of the national television channels, with maximum benefits for the respective local populations.

An obligation to reserve spectrum capacity is also established for new television channels to be assigned under the terms of the law, thus guaranteeing the corresponding right of access, under equal conditions, of new operators to this platform.

Finally, a clear and assumed objective of the present tender, is to encourage a strong alternative to existing distribution platforms, this promoting genuine competition, to the benefit of consumers and the different market players.

The Government hereby assumes the State's primordial mission, as consecrated in the Constitution, to ensure that markets operate in such a manner as to guarantee fair competition between companies.

In this context, bids shall not be permitted from entities whose shareholders are companies with a significant market position in the cable distribution platform.

Under these terms:

The Government decrees, through the Minister of Social Equipment, under the terms and for the purposes of the provisions of point 2 of article 13 of Decree-Law no. 381-A/97, of December 30, the following:

1. The Regulations are hereby approved of the Public Tender for the issue of a license for the establishment and operation of a Digital Terrestrial Television Platform, through the use of the frequency channels reserved for digital terrestrial television broadcasting as identified in the Announcement published in the III Series of the Diário da República on January 6, 2001.

2. The Regulations of the Public Tender identified in the previous point are published in annex to the present Administrative Rule and form an integral part thereof.

3. The grant of the license is governed by the terms of Decree-Law no. 381-A/97, of December 30, by the Tender Regulations and the clauses of the respective Tender Specifications.

4. The present Administrative Rule enters into force on the day following its publication.

Minister of Social Equipment, Eduardo Ferro Rodrigues, 30 March 2001.

Signed on 6 of April 2001.

ANNEX

Regulations of the public tender for the issue of a license for the establishment and operation of a digital terrestrial television platform

Article 1
Object

The object of the public tender specified in the present regulations is the grant of a license for the establishment and operation of a Digital Terrestrial Television Platform, through the use of the frequency channels reserved for digital terrestrial television broadcasting as identified in the Announcement published in the III Series of the Diário da República on January 6, 2001.

Article 2
Applicable Legislation

1. The public tender is governed by the terms of Decree-Law no. 381-A/97, of December 30, by the present Regulations and by the Tender Specifications prepared by ICP subject to approval by the member of government responsible for communications.

2. The license to be granted is governed by the terms of Decree-Law no. 381-A/97, of December 30, the present regulations and the tender specifications, as well as other legislation applicable to the communications sector.

3. The licensee is obliged to comply with prevailing national legislation where applicable, as well as mandates or injunctions imposed on it by the competent authorities, under the terms of the law.

4. The licensee is also obliged to comply with all legal requirements to be published in the future, even if such requirements include terms which establish provisions arising from needs or requirements of the public use of the service that had not been foreseen when the licence was granted.

Article 3
Invitation to tender

The public tender is launched by an order of the member of government responsible for communications, to be published as an announcement in the 2nd series of the Diário da República, specifying the following:

a) the object and duration of the tender;

b) the entity responsible for the tender;

c) the frequency bands to be used;

d) the provisions governing the grant of the license;

e) explanation of the instruments comprising the tender

Article 4
Bidders

1. Bidders may be commercial companies that are incorporated or about to be incorporated provided they comply with the requirements and conditions established in article 12 of Decree-Law no. 381-A/97, of December 30.

2. Companies to be incorporated may bid provided they possess a provisional identification card, but in the event that a licence is granted, it will only be issued on presentation of a document certifying that the company's memorandum of association has been registered at the competent Companies Registry.

3. Bids may not be submitted from any company that, directly or indirectly, has as shareholder, or is shareholder of, an entity with a national market share equal to or above 50% in the cable distribution business.

4. For the purposes of the previous point, a set of companies are considered to be the same entity, if as a result of the relations established between them, they represent allied companies, under the terms of the Companies Code.

Article 5
Preparation of bids

Tender specifications are available from the public attendance service in ICP's head office, Avenida José Malhoa, no. 12, Lisbon, on any working day between 09.00 and 16.00, until the end of the period for the submission of bids.

Article 6
Provisional bond

1. To guarantee the undertaking assumed with presentation of the bids as well as the duties inherent to the tender, bidders must provide a bond in the amount of 1,000,000 euros or PTE 200,482,000.

2. The bond is effected by depositing the amount in cash or in securities issued or guaranteed by the State in Caixa Geral de Depósitos in favour of ICP.

3. The deposit referred to in the preceding paragraph may be substituted by a bank guarantee or insurance guarantee providing a similar assurance in favour of ICP, which in either case must be duly documented.

4. When the deposit is in the form of securities these are valued at their nominal value unless in the preceding three months the average price on the Lisbon Stock Exchange is fixed below par in which case the securities shall be valued at 90% of such average price.

5. The bond may be retrieved by the bidders immediately after the close of the bid submission deadline should a bid not have been submitted, not been accepted or no licence have been attributed.

6. For purposes of the provisions of the previous point ICP must, within the 10 subsequent working days, take the necessary steps in that regard.

Article 7
Requests for Clarification

1. During the time limit for presentation of the bids and up to 15 working days before such time limit expires, bidders may request clarification of any doubts concerning interpretation of the instruments of the tender process.

2. Requests for clarification must be made to the public attendance service of ICP's head office in writing, against a receipt of delivery, or sent by registered letter with recorded delivery to the Chairman of the board of directors of ICP.

3. The information requested shall be sent by the ICP by registered letter with recorded delivery within ten working days of the date on which the request is received and shall be immediately included by the ICP in the tender reference book referred to in article 9.

4. Public network operators and public telecommunications service providers are bound by these Regulations for the purposes of this tender to provide the ICP with all the information it requests within the time period established by the latter so that it may comply with the provisions of the previous point.

Article 8
Delays

In the situations specified in the previous article, and in the event of use of postal services, the bidder bears sole responsibility for delays that occur, and may not lodge any complaint in the event that the clarification request is delivered after the close of the applicable deadline.

Article 9
Book of Reference

1. ICP must make available a Book of Reference containing all instruments that form part of the tender process, clarification requests, and replies thereto, such a Book to be freely available in the public attendance service of ICP's head office between 09.00 and 16.00 for consultation by bidders.

2. Bidders may request photocopies of the Book of Reference, such photocopies to be authenticated by ICP.

3. The Book of Reference shall be closed and archived at ICP on the date of public act of tender.

Article 10
Method and deadline for the submission of bids

1. Bids for the licence must be made in writing to the member of the Government responsible for communications and shall contain the identification of the bidder, reference to the notice on invitation to tender, and signature of the bidder and date.

2. The application shall be drawn up in Portuguese, without erasures, amendments, insertions or words crossed out, with the same font used throughout.

3. Bid applications shall be delivered to the public attendance service at ICP's head office, between 09.00 and 16.00, with a receipt received as proof of delivery.

4. The bid submission deadline is 45 working days after the date of publication of the announcement of the launch of the tender in the Diário da República., and bids may not be submitted after this deadline.

Article 11
Bid documents

1. Bidders shall submit the following documents with their respective bid application, specified in the previous article:

a) A declaration by the body that binds the company, which capacity must be recognised by a public notary, expressly containing acceptance of the conditions of the public tender, and subjection to the duties arising from the application and the respective bids, should the licence be granted;

b) Certification of registration and prevailing inscriptions issued by the competent Companies Registry;

c) Photocopy of the respective articles of association;

d) A document proving that a provisional bond has been provided under the terms of article 6;

e) A document showing the structure of share capital and direct or indirect holdings;

f) A document proving that the entity's social security and tax obligations are fully paid up;

g) Proof of an organised accounting system under the terms of the Official Chart of Accounts;

h) A document outlining the organisational structure of the bidding entity with an identification of those in the most senior positions and a summary of their curricula vitae;

i) A detailed proposal concerning the installation and operation of the system to be developed in accordance with the technical plan to be drawn up in compliance with the tender specifications, such proposal containing the description of the technological system to be constituted, system development planning, consequent coverage plan, management and operation of the system, quality levels, conditions of sharing of infrastructures, the conditional access system to be used and the development and operational plans of interactive services;

j) An economic and financial plan drawn up in accordance with the structure of the tender specifications containing market forecasts and performance strategies, emphasising the range of services, the pricing strategy, sales channels and an electronic programming guide, as well as economic and financial documents on implementation of the project and operation of the service, indicating the sources of finance;

k) Document from the bidder, in which the bidder declares that all copies of documents presented conform with the originals and accepts the prevalence of the originals for all effects;

l) Any other items of information that the bidder considers relevant for appraisal of its bid.

2. For the purposes of paragraph e) of point 1, bidders shall indicate the names of the bidder's shareholders, whether singular persons or corporate bodies, together with their respective shareholding. Should any shareholder be a corporate body, the same indication shall also be given in respect of its shareholders.

3. The entities referred to in point 2 of article 4 are exempt from providing the documents mentioned in sub-paragraphs a), b), c), f) and g) of point 1 and must instead submit the following:

a) A protocol binding the incorporating persons inter se and containing an express declaration of acceptance of the conditions of the public tender and subjection to the duties arising out of the application and respective bids, should the licence be attributed;

b) The draft articles of association to which the incorporating persons are bound;

c) Provisional identification card.

4. The entities referred to in point 2 of article 4 shall expressly indicate the address to which all correspondence related to the tender should be sent.

5. Companies whose incorporation occurred in the 90 days preceding the date of submission of the bid are exempted from the requirement referred to in paragraphs f) and g) of point 1. sub-paragraph f).

6. Documents submitted by bidders whose head office is outside Portugal must be issued and authenticated by the competent authorities of the country of origin; should no document identical to those requested be available it can be substituted by a declaration made under oath by the bidder before a legal or administrative authority, notary or other competent authority of the country of origin.

7. All documents accompanying the application must be written in Portuguese or, if not, be accompanied by a duly legalised translation regarding which the bidder states that for all purposes, the latter shall prevail over the original.

8. All documents comprising the application submitted by bidders shall not be returned but will remain in the possession of ICP.

Article 12
Distribution of bid documents

1. The bid application shall be submitted in a single, sealed, duly identified envelope.

2. Documents and information accompanying the bid application shall be submitted in separate volumes, sealed in order to ensure the inviolability of their contents, numbered in accordance with their total number and duly identified in accordance with the structure required in the tender specifications, containing the identification of the bidder, the technical plan, and economic and financial plan.

3. The original documents relating to each of the chapters of the tender specifications shall be sequentially numbered, each page identified with the initials of the legal representatives of the bidder, and with an indication that the document is an original copy.

4. A copy of all documents specified in the previous point should be presented and duly identified as such.

5. 5 copies of the information relating to the chapter of the technical plan and the chapter of the economic and financial plan should be presented in a non-rewritable CD-ROM, with the respective files in PDF format (Adobe Acrobat version 4 or higher), and respecting the sequential numbering of the chapter pages.

6. The geographic maps specifying radio-electric coverage are exempted from the terms of the previous point, and should respect the presentation requirements identified in the tender specifications, namely an original copy, initialled by one of the bidder's legal representatives, and four duly identified copies.

7. The access parameters to the files specified in point 5 should ensure that access is only possible via the use of a password, which should be indicated to the committee specified in point 3 of Article 13, via a declaration provided in a sealed envelope.

8. The content of the said files may be encrypted, in which case the bidders shall provide the necessary keys or certificates required for consultation, under the terms specified in the previous point.

9. The envelopes with the declarations specified in points 7 and 8 shall be included within the envelope containing the bid application.

10. The parameters inherent to the recording of files in the format specified in point 5 shall ensure that it is impossible to alter the contents of the files or make further recordings in any device.

11. One of the copies specified in point 5 shall be identified by the bidders as the original, for the purposes of paragraph k) of point 1 of Article 11.

Article 13
Public Act of Tender

1. The public act of tender to open bids shall take place at ICP at 10 am on the 1st working day after the date mentioned in point 4 of article 10, in conformity with an announcement to be published in the press by ICP, which will also identify the location in which the public act of tender will take place.

2. Only representatives of the bidders, up to a maximum of three persons per bidder, may be present at the public act of the tender, provided that such persons are duly empowered to represent the bidders in said act.

3. The public act of the tender is conducted by a 5-member committee (hereinafter called "the committee"), appointed by decision of the member of Government responsible for communications. The committee is responsible for:

a) Confirming reception of the envelope containing the bids as well as the packages containing their accompanying documents and instruments;

b) Opening the envelopes containing the bids as well as the packages containing the documents and information pertaining to identification of the bidder, the technical plan and the economic and financial plan;

c) Initialling all bids and the declarations specified in points 7 and 8 of article 8 above, simultaneously ensuring that the original documents and geographical maps that form part of the bids are sealed and stamped, and establishing a time limit for consultation of the bid applications by the bidders;

d) Whenever so required, checking the capacity of the persons intervening in the act;

e) Providing bidders with a maximum time limit of two working days in order to rectify any omissions or errors verified in the bid application, when such rectification is considered feasible;

f) Accepting and deciding on all claims submitted during the public act by the bidders' representatives, suspending the said act whenever necessary.

4. An appeal, which does not suspend the effects of the appeal decision, may be lodged against the decisions referred to in paragraph f) of the previous point with the member of Government responsible for communications.

Article 14
Rejection of bids

1. Bids shall be rejected at any stage of the tender proceedings in the event that any of the following situations:

a) Non-fulfilment of the provisions of articles 10, 11, 12 and 16;

b) Non-fulfilment of the requirements and conditions of the tender.

2. Bids shall be rejected, by order of the member of government responsible for communications, that do not fulfil the following minimum requirements established under the terms of the tender specifications:

a) Use of the DVB-T system (Digital Video Broadcasting for Terrestrial Television);

b) Fulfilment of the coverage requirements identified in the tender specifications associated to transport and transmission requirements for television channels as specified in points 1 and 2 of article 22 and point 3 of Article 23.

Article 15
Appraisal of bids

1. The committee is responsible for the appraisal of bids.

2. The appraisal of bids shall be based on the following selection criteria, listed in order of importance:

a) Contribution to the development of the Information Society and rapid mass-market penetration of digital terrestrial television;

b) Quality of the technical plan, including the promotion of interoperability;

c) Contribution to the development of sustained economic activity;

d) Promotion of a competitive and innovative range of services, that uphold consumer rights;

e) Quality of the economic and financial plan;

f) Coherence and overall quality of the application.

3. ICP shall carry out technical analysis of bids, together with any other activities requested of it by the committee.

Article 16
Clarifications to be provided by Bidders

1. Bidders undertake to give the committee all clarifications required for assessment of the applications, to be provided by a qualified representative of the bidder.

2. Non-compliance with the previous paragraph shall result in exclusion from the tender except in duly justified cases accepted by the committee.

Article 17º
Hearings with bidders

The Committee will organise prior hearings with all bidders under the terms of articles 100 and following articles of the Code of Administrative Procedure.

Article 18
Final Decision

1. The committee shall draw up a list classifying the bidders, based on due grounds and, within a time limit of 35 working days counted from the date of the public act of the tender, shall propose attribution of the licence to the bidder that having complied with the conditions of the tender and the selection criteria, has earned the best classification. On the proposal of the committee the time limit indicated above may be extended by order of the member of Government responsible for communications.

2. The member of the Government responsible for communications is responsible for approving proposals for the grant of the licence, to be submitted by the chairman of the committee.

3. ICP shall inform bidders of the decision concerning the grant of the license, by registered letter with recorded delivery.

4. The Government reserves the right not to approve the grant of a licence should the bid fail to satisfy the public use requirements inherent in the system put out to tender.

Article 19
Definitive Bond

1. Within 10 days of receipt of the communication referred to in point 3 of article 18, the entity to which the licence is granted shall increase the bond to the amount of 5,000,000 euros or PTE 1.002.410.000.

2. The bond specified in the previous point shall be valid for a period of five years, and may be withdrawn up to a limit of one quarter of its value provided that the minimum coverage obligations contained in the tender specifications are complied with.

Article 20
Issue of licence

1. Licences shall be issued by the ICP following compliance with the provisions of point 1 of the previous article, under the terms and with the specifications defined in Decree-Law nº 381-A/97, of December 30.

2. Should the bidder awarded the licence fail to comply with point 1 of the previous article without due grounds, the member of the Government responsible for communications shall, by proposal of the ICP, return the classification list to the committee requesting that a new proposal for the grant of a licence be submitted to the member of the Government within 10 working days, under the terms of point 1 of article 18.

3. Approval of the new bid shall result in the revocation of the previous grant of licence.

Article 21
Reserve of capacity

1. The licensed entity is obliged to reserve, under the terms of the tender specifications, capacity for the codification, multiplexing, transport and transmission:

a) Of the public television service granted by concession, including channels 1 and 2, as well as RTP-Açores and RTP-Madeira in the respective regions;

b) Of the television channels licensed on the date on which Law no. 31-A/98, of July 14 (Television Act) entered into force;

c) Of three television channels to be attributed under the terms of applicable legislation.

2. The reserve of capacity specified in paragraph c) of the previous point should be regulated by criteria of fairness and proportionality.

Article 22
Transport and transmission obligations

1. For the purposes of paragraph a) of the previous article anterior, the licensed entity is responsible for broadcasting, simultaneously and integrally, the television channels available in the analogue broadcasting network.

2. For the purposes of paragraph b) of the previous article, the licensed entity is obliged to broadcast, simultaneously and integrally, the television channels provided in the analogue network, in the event that the licensed television operators exercise the right conferred to them under the terms of points 2 and 4 of Article 1 of Decree-Law no. 237/98, of August 5, rectified by the Declaration of Rectification no. 13-B/98, of August 31.

3. The licensed entity shall codify, provide multiplexing, transport and transmit free-of-charge the television channels specified in paragraphs a) and b) of the previous article, until the moment in which analogue television transmissions are switched off, provided that the respective signals are provided free-of-charge by the television operators to the digital broadcasting centre under the terms established in the tender specifications.

4. At the end of the time period specified in the previous point, the licensed entity shall guarantee the television operators access to the network under the terms specified in Article 23.

5. The broadcast channels referred to in point 3 shall be provided in open access by the entity that is licensed via the present tender, and users may not be charged for these channels.

Article 23
Access obligations

1. For the purposes of paragraph c) of article 21, television operators have the right of access, under equal conditions, to the digital terrestrial television platform, and the licensed entity is obliged to guarantee access to the network, subject to due remuneration, under the terms of applicable legislation, namely Chapter III of the Regulations of the Operation of Public Telecommunications Networks, approved by Decree-Law no. 290-A/99, of July 30.

2. ICP is responsible for intervening in the resolution of litigation between the licensed entity and television operators, under the terms of Chapter VI of the Regulations of the Operation of Public Telecommunications Networks, as approved by Decree-Law no. 290-A/99, of July 30.

3. The licensed entity shall guarantee together with television operators the coverage requirements specified in Decree-Law no. 237/98, of August 5.

4. When the licensed entity simultaneously exercises the activity of television operator it shall maintain separate accounts for the two distinct activities.

Article 24
(Provision of conditional access)

In the event that the licensed operator provides technical services of conditional access it shall:

a) Offer all service providers that use the digital terrestrial television platform, under fair, equal and non-discriminatory conditions, technical services that enable digitally transmitted services to be received by duly authorised users through decoders managed by the licensed entity;

b) Maintain separate accounts for the provision of conditional access.

Article 25
Obligations of the licensed entity

1. The obligations arising from the terms of the tender and the selected bid, together with the preferential conditions determining the grant of licences, are for all purposes an integral part of the licences.

2. The grant of the licence does not confer on the licensed entity any rights other than those resulting from the exact terms contained in the licence, and no facts resulting from the introduction, in any form, of new services or grant of licences or a change in circumstances may be invoked.

3. The duty to be paid for the exercise of activity, under the terms of article 29 of Decree-Law no. 381-A/97, of December 30, as well as the duties resulting from use of the radio-electric spectrum, are only due to be paid from the date when trading commences.

4. The licensed entity may not alter the composition and ownership of their share capital, without approval from the member of government responsible for communications, preceded by an opinion from ICP.

Article 26
Adhesion contracts

When contracts to be signed between the licensed entity and users take the form of adhesion contracts they should be submitted for prior approval by ICP, subject to an opinion from the Instituto do Consumidor (Institute of the Consumer).

Article 27
Term of licence

The licence shall be valid for a period of 15 years, and may be renewed under the terms of Decree-Law no. 381-A/97, of December 30.

Article 28
Counting of time limits

The method for counting the time limits established in these Regulations shall be governed by the rules of article 72 of the Code of Administrative Procedure.