ICP-ANACOM clarification: Universal Service Discount for Pensioners and Retirees
Under Decree-Law no. 20-C/86 of 13 February, as amended by Decree-Law no. 18/2003 of 3 February (DL no. 20-C/86), PT Comunicações, S.A. (PTC) was bound to provide a 50% discount on subscriber line rental to retirees and pensioners in households having a monthly income not exceeding the national minimum wage, in order to make the subscription required to possess telephones in their homes affordable.
At the end of 2004, ANACOM imposed a requirement on the companies of Grupo PT, as were active in retail markets of access to the public telephone network at a fixed location for residential and non-residential customers, to provide a Wholesale Line Rental Offer (WLRO), constituting one of the "remedies" imposed on companies with significant market power (SMP) in the retail narrowband markets1.
From the outset (determination of 29.4.2005, which approved the minimum components of the WLRO2), ICP-ANACOM ordered that the companies of Grupo PT reflect a discount in the price associated with the WLRO amounting to 50% of the monthly charge associated with the subscriber lines allocated to retirees and pensioners under Decree-Law no. 20-C/86, whereas WLRO beneficiaries are bound to ensure that this value is reflected in the amount paid by the subscribers concerned.
On 17.5.2007, following repeal of Decree-Law no. 20-C/863, ICP-ANACOM adopted the "Decision on pricing conditions applicable to retired people and pensioners who are subscribers under the scope of the universal service"4, pursuant to which, inter alia, PTC was ordered to ensure:
(a) provision to pensioners and retirees of a 50% discount on network line rental within the scope of the universal service (corresponding to section 2 of the determination of 17.5.2007);
(b) transmission of this discount to WLRO accesses which supported services offered to retirees and pensioners (corresponding to section 3 of said determination of 17.5.2007).
Under the same determination, [recital k) of paragraph 30 of the decision] ICP-ANACOM also made clear that:
(c) based on the evaluation and calculation of the CLSU - custos líquidos do serviço universal (net costs of universal service), it would consider the net costs associated with (i) the 50% discount on the network line rental provided to pensioner and retiree customers and (ii) the 50% discount on the value of the network line rental passed on with respect to WLRO accesses which support services offered to retirees and pensioners.
Accordingly the WLRO Reference offer makes provision for the conditions governing allocation of a 50% discount on the monthly charge.
2. Universal Service Tender 1
The tender for the selection of the undertaking or undertakings to be designated for the provision of the universal service of connection to a public communications network at a fixed location and provision of publicly available telephone services5 (Universal Service Tender 1) includes an offer targeting retirees and pensioners, whereby the provider of the universal service is required to provide an offer designated as "Tarifário Reformados e Pensionistas" (Retirees and pensioners tariff) consisting, in brief, of the offer of a discount of 50% on network line rental (paragraph 7 of the respective Tender Specifications). This offer is part of Component 2 of the base price of the tender procedure (paragraph 2 of clause 12 of the Tender Specifications), which was set at 5.06 euros (unit value of monthly charge financing) in any of the 3 lots.
The values and limits of financing for the provision of this offer within the scope of the universal service are established in clause 13 of the Tender Specifications of Universal Service Tender 1, especially as regards the following:
- The net cost for which the universal service provider(s) shall be compensated as regards Component 2 is the product of the unit value contained in the selected proposal, corresponding to the financing of the monthly charge, and the number of monthly charges associated with the discount in each calendar year throughout the duration of the contract, up to certain limits as set out in paragraph 2 of this same clause [clause 13, paragraph 1, point b)].
- The universal service provider shall receive annually, as compensation in respect of Component 2, the value that results from the formula Vu x Ms, where "Vu" is the unit value set out in the selected proposal, corresponding to the financing of the monthly charge, and "Ms" is the number of monthly charges actually associated with the discount in each calendar year to which the costs subject to compensation refer, up to the limits so established [clause 13, paragraph 4, point b)].
- The amount of this compensation is not cumulative with the engagement by the universal service provider, pursuant to the use of wholesale offers, of any discounts related to services for retirees and pensioners (clause 13, paragraph 8).
As regards the time limit for commencing provision of services, it is determined under clause 6 of the Tender Specifications that provision is to commence no later than 6 months following the date of the contract's conclusion (whereas the contracted party is bound to liaise with PTC with a view to ensuring continuity of services) or, in the event that PTC is contracted party, on the date of the contract's conclusion.
Noting that ICP-ANACOM's determination of 17.5.2007 established, within the scope of the universal service a framework of conditions, inseparable from each other, governing provision of a 50% discount to retiree and pensioner subscribers, which conditions are reflected, in brief, (a) in the conditions governing availability of the discount within the scope of the universal service; (b) in the impact of this discount on the WLRO in respect of SMP; and (c) in clarification as to the associated net costs that will be considered in terms of the evaluation and calculation of CLSU;
Considering the new framework applicable to the universal service, as stemming from the component documents of the ongoing tenders, including the conditions applicable to its financing, as explained in section 2; and
In pursuit of the responsibilities established under point b) and d) of paragraph 1 and in point c) of paragraph 2, both of article 6 of ICP-ANACOM's Statutes, as in annex to Decree-Law no. 307/2001 of 7 December, and also in exercise of the powers conferred by paragraphs 1 and 3 of article 93 of Law no. 5/2004 of 10 February, as amended by Law no. 51/2011 of 13 September;
It is clarified that it is the position taken by ICP-ANACOM that the new conditions established in Universal Service Tender 1 substitute, en masse, the previous obligation to provide the 50% discount to pensioners and retirees by PTC, as universal service provider, under the terms imposed by the determination of 2007.
As such, from the moment that provision of the universal service is engaged pursuant to the contract concluded in respect of Universal Service Tender (by PTC itself or by an alternative operator so designated as universal service provider) the effects produced by the determination of 2007 lapse, thereby releasing PTC from the obligation, as provided for therein, to offer the retail discount and to reflect said discount in the WLRO. Furthermore consideration of the net costs identified in the determination of 2007 is made inapplicable, as being incompatible with the compensation/financing scheme stemming from the tender components.
In this context and at this stage, the present clarification is deemed sufficient with a view to clarifying the conditions relevant to the preparation of proposals, regarding the inapplicability of ICP-ANACOM determination of 17.05.2007 from the instant at which provision of the universal service is engaged pursuant to the contract concluded in respect of Universal Service Tender 1, notwithstanding that ICP-ANACOM reserves the right to review the specific conditions laid down in the WLRO in the context of verifying compliance with the obligations stemming from the analysis of the relevant market.
1 Imposition of obligations of narrowband retail marketshttps://www.anacom.pt/render.jsp?contentId=419637.
2 SLRO Reference Proposalhttps://www.anacom.pt/render.jsp?contentId=418740.
3 Pursuant to article 158 of Law no. 53-A/2006 of 29 December.
4 Determination pursuant to the powers and responsibilities of ICP-ANACOM within the scope of the universal service (article 86, paragraph 3 and article 93, paragraphs 1 and 2, point a) of the Lei das Comunicações Eletrónicas (Electronic Communications Law)), available at: Specific conditions in the scope of the US for retired people and pensioners who are FTS subscribershttps://www.anacom.pt/render.jsp?contentId=485840.
5 Available at Portaria n.º 318/2012, de 12 de outubrohttps://www.anacom.pt/render.jsp?contentId=1140348.
- Tenders for the selection of provider(s) of universal service of electronic communications https://www.anacom.pt/render.jsp?categoryId=346959
- Specific conditions in the scope of the US for retired people and pensioners who are FTS subscribers https://www.anacom.pt/render.jsp?contentId=485840