ICP-ANACOM Advisory Council
Opinion
General Terms of 2015 Budget
In General Terms
It is incumbent upon the Advisory Council to take a view on the general terms of ICP-ANACOM's budget. However, given their impact on the majority of fee-payers and given their determinant nature as regards other revenues, there are budget items which cannot be considered in general terms.
The Advisory Council considers that the following items warrant further examination:
1. Constitution of provisions
The Plan provides for a significant increase in the financial year's Provisions versus the amounts budgeted for 2014 (although the figure recorded in 2013 was considerably higher: over 20 million euros). The increase effected by ICP-ANACOM in Provisions to be constituted for the financial year has a significant impact on the sector, since, under the current model used to calculate regulation fees, provisions are an integral part of the costs which are recuperated through fees. The inclusion of such provisions in ICP-ANACOM's administrative costs and the compensation thereof by means of activity fees entails a large increase in operators' expenses. Given that the timing of determination is unclear and the respective amount indeterminate, it is difficult to consider this, in advance, as a real regulation expense. It is important in this respect, to take into account the experience attained to date: in 2014, ICP-ANACOM, returned 12,448,610 euros to the sector, which had been overcharged between 2009 and 2012.
Although the excess Provision charged for the period has been reimbursed, this reimbursement took place long after the amounts were paid, and no compensation was paid despite the period time elapsed.
In view of the above, it is recommended that the inclusion of provisions as a Regulator expense recoverable from the sector should be reviewed and discontinued, or, at least, current practice should be adopted, as followed by the overwhelming majority of European Union regulators, in order to prevent provisions from becoming a source of pressure on the regulator or an impediment to the right of access to the courts.
2. Budgetary trends
ICP-ANACOM continues to make comparisons between the budget for the first year of the Plan and the amounts budgeted for the current year. However, these figures are the result of a provisional exercise conducted about a year ago. As previously suggested by this Advisory Council, it is considered that ICP-ANACOM should present data on the execution of the current year's budget and should explain any deviations therefrom. In addition, the budgeted figures for 2015 should be compared to the estimated values for the 2014 financial period. In that regard, albeit in general terms, it is noted that the values of the objectives quantified for the three-year period, with respect to the last two years of the period covered, are, to a meaningful and relevant extent, identical.
While ICP-ANACOM acknowledges an impending scenario characterized by a significant reduction in the sector's overall revenues, this does not appear compatible with its forecast for an increase in regulatory revenues over the same period. Furthermore, ICP-ANACOM does not demonstrate any intention of giving this fact consideration over the three-year period. In fact, as regards expenditure, ICP-ANACOM forecasts stabilisation in its budget at around 50 million euros over the three years and does not envisage any additional effort with a view to the Regulator's improved efficiency, which it could explain in line with various measures to reduce operating costs to be implemented in 2015 and announced in the Plan.
In the strategic plan, concerning personnel, ICP-ANACOM provides information about trends in a range of indicators. It would also useful if ICP-ANACOM were to disclose information about changes in the distribution of its staff among the different areas of activity, as previously recommended by this Advisory Board.
Advisory Council, 6 October 2014
