Internet Access - ICP determines prices for flat rate tariffs

The Instituto das Comunicações de Portugal (ICP) has decided that in local access the maximum prices to generally apply to flat rate Internet connections, will be PTE 2,000 during the economy period and PTE 4,000 for unlimited access. In simple transit access - broadly corresponding to regional communications - the maximum prices to generally apply to flat rate Internet connections will be PTE 2,700 during the economy period and PTE 5,100 for unlimited access.

During the economy period, these prices shall also apply to ISDN basic access. The economy period applicable to the Internet is also to be extended, and will now start at 6.00 p.m. and end at 9.00 a.m. These amounts correspond to the prices that Portugal Telecom shall charge to Internet service providers. The price to be charged to the end consumer will be defined by the ISPs in accordance with their commercial strategy in an open and competitive market.

These prices form part of a set of decisions that will alter the regime of Internet access and thus regulate the pricing system applicable to the provision of services. As a guiding principle, this new model integrates all Internet traffic under an interconnection regime. The new model will also bring lower prices for Internet access connections, compared to prices charged for voice traffic. The new system aims to safeguard consumer interests and also guarantee economic sustainibility, thus promoting Internet penetration in Portugal, in conformity with resolutions of the Council of Ministers concerning the Information Society and the eEurope Initiative approved in the Lisbon Summit.

The transition of Internet traffic to the interconnection regime should be completed by March 31 2001 at the latest. In practise this transition will substitute the present model of sharing Internet access telephone traffic revenues to a model based upon payment at the point of call origination. As a result, ISPs will now be responsible for defining the price to be charged to the end consumer for Internet access via the fixed telephone network. The consumer will subsequently pay an origination fee to the direct access operator. Origination is the service provided by the direct access operator to the ISP in order to route a specific communication to this ISP.

As a result, maximum prices for origination of Internet traffic should be equivalent to the prices defined for voice traffic in 2001. In the economy period, this will result in a 7.1% reduction in local interconnections, a 27.7% reduction in simple transit(1) and 14,7% in dual transit (2). There will be no changes in the normal period. This will result in the following maximum prices per minute:

Local/Call Activation - PTE 1.60

Local/Economy Period - PTE 0.92

Local/Normal Period - PTE 1.54

Simple Transit/Call Activation - PTE 1.80

Simple Transit/Economy Period - PTE 1.33

Simple Transit/Normal Period - PTE 2.55

Dual Transit/Call Activation - PTE 2.00

Dual Transit/Economy Period - PTE 2.72

Dual Transit/Normal Period - PTE 4.53

(prices excluding VAT)

(1) Simply transit, in general terms, may be identified with regional connections.

(2)Dual transit may, in general terms, be identified with inter-city connections.

In the market for the provision of ISDN primary access (each primary access support 30 telephone lines) the price that Portugal Telecom will charge to ISPs is to be reduced by 20%.

As part of the new access system, the ISPs will have the right to directly bill the end consumer, while Portugal Telecom should guarantee the billing of traffic on request. Portugal Telecom, as an entity with significant market power in the interconnection markets, fixed telephone networks and leased circuits, should publish a Reference Internet Access Offer (RIAO) by March 1, 2001. This document should serve as the basis for its provision of commercial services in this area. At the same time, Portugal Telecom shall also present a restructuring plan of the entire national network, comparable to that already presented for Lisbon and Oporto.

ICP hopes that as a result of the present set of measures, conditions will be established for the development of the Internet market, based upon a regulatory model that satisfies consumer expectations and upholds the economic sustainibility of operators.

Additional information is available at: