Under the terms of paragraph 3 of clause 24 of the Concession and paragraph 2 of Article 14 of the Basic Law of Postal Services, the rules for establishing the prices of individual services that comprise the US concession to CTT shall be determined by agreement between ICP-ANACOM and CTT.
Meanwhile, under the terms of clause 12 of the Concession and paragraph 5 of article 8 of the Basic Law for Postal Services, the parameters and minimum levels of quality of the US, which CTT is bound to provide, are established in agreement concluded between ICP-ANACOM and CTT, in a negotiation process running in parallel with the process in respect of US prices described above.
On 8 October 2007, CTT terminated the Price and Quality Conventions of the universal postal service which applied through 2006 and 2007 and at the same time presented proposals for new conventions to take effect from 2008. Consequently, ICP-ANACOM proceeded to conduct an analysis of CTT's reasoning and proposals, conducting several studies on the provision of the US and corresponding obligations in preparation for its negotiations with CTT, which negotiations took place in 2008 and concluded with the signing of new conventions on 10 July 2008, subsequent to a hearing of organizations representing consumers.
The provisions of the Price Convention of the Universal Postal Service (Price Convention) of 10 July 2008, include the following:
a) The term of the Price Convention, which took effect from 1 January 2008, was extended to 3 years, seeking greater regulatory predictability;
b) US prices shall comply with the principles of cost orientation (carried out progressively, so as to allow for a gradual balance of tariffs and to ensure the accessibility of prices), of transparency, non discrimination and uniformity of application (article 2);
c) The weighted average price variation of reserved postal services shall not exceed in 2008, in nominal terms, the rate of the inflation forecast in the State Budget minus 0.3 percentage points in 2008, which deduction rises to 0.4 percentage points in 2009 and 2010, thereby providing an incentive for increased efficiency during the continuance of the Price Convention. Where inflation deviates from the rate forecast, the resulting difference will be incorporated into the maximum variation in prices for the following year 1;
d) The prices of non-reserved services included in the US 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, and taking also into account the levels of quality of service achieved (paragraph 5 of article 5);
e) The minimum period of notice for CTT to disclose the prices of universal postal service to users, which prices should also be made available at a specific address of CTT's website, was extended from five to ten working days.
The provisions of the Universal Postal Service Quality Convention (Quality Convention) of 10 July 2008, included the key following aspects:
a) Alteration to the duration of the Quality Convention, extending it to 3 years (in line with the Price Convention), seeking greater regulatory predictability, which shall apply from 1 January 2008;
b) Maintenance of the quality of service indicators (QSI) and levels of quality defined in the Quality Convention which applied in 2006 and 2007;
c) The association made in the in the Quality Convention of the maximum variations in prices of reserved services, as defined in the Price Convention with the achievement by CTT of the levels of quality defined, is maintained, continuing the maximum deduction of 1 percentage point with respect to the prices of these services in the event of non-compliance. It is set out that in exceptional circumstances duly substantiated by CTT and in the event of operational difficulties associated with the implementation of price reductions, it is possible to replace the deduction made to the prices to customers with other compensatory measures, which measures shall be subject to approval by ICP-ANACOM and have a financial value similar to that resulting from the reduction in prices;
d) Inclusion of a provision on the obligation of CTT to publish the QSIs to which they are bound and the annually accomplished values, which obligation is set out by determination of ICP-ANACOM of 4 April 2002;
e) Inclusion of the possibility that ICP-ANACOM may accept, until full liberalization of the sector, the disregard of records affected by the occurrence of CTT labour disruptions affecting the quality of service, but always subject to review and prior approval by this Authority.
1 When calculating the maximum prices of reserved services for 2008, given that the the 2007 inflation rate was already known when the Price Convention was agreed, the difference in inflation to be incorporated corresponds to the difference between the actual inflation rate seen in 2007 (as published by INE (Statistics Portugal)) and the rate of inflation forecast for 2007 in the 2007 State Budget. In each of the years 2009 and 2010, and because the value of the applicable maximum price should be fixed prior to the beginning of each year, the value of the difference will no longer take into account the actual rate of inflation in the previous year (published by the INE), which will only known during the course of these years, but rather the difference between the projected rate of inflation for the year 2009 and 2010 in the Sate Budget for 2010 and 2011, respectively.
