1.2. US Financing

Taking into account possibilities provided for in article 97 of ECL for the purpose of CLSU financing, it was decided, with Law No. 35/2012, of 23 August, amended and republished in the meantime by Law No. 149/2015, of 10 September (hereinafter the Fund Law or Law No. 35/2012), to share US costs among companies providing public communications networks and publicly available electronic communications services on national territory, the Compensation Fund of the Electronic Communications Universal Service (FCSU), provided for in the ECL, thus having been set up, and criteria for sharing CLSU among the referred companies been established.

Under article 6 of the Fund Law, the fund is intended to finance CLSU determined in the scope of the USP designation tenders, as well as to finance CLSU referred to in chapter V of that Law, concerning the period preceding the tender designation of the USP.

According to paragraph 2 of the referred Law, undertakings providing public communications networks and/or publicly available electronic communications services on national territory that, in the calendar year to which the net costs relate, registered an eligible turnover in the electronic communications sector which gives them a weight equal to or higher than 1% of the sector’s overall eligible turnover, shall be liable to contribute to the compensation fund, both for the purpose of the financing of CLSU incurred in the period preceding the tender designation¹, and the financing of CLSU incurred after the tender designation.

As regards the financing of CLSU incurred in the period preceding the USP tender designation, article 17 of the Fund Law establishes that the Fund must be called to compensate CLSU incurred until the tender-designated providers start the provision of the universal service, where the following requirements, which already result from ECL (paragraph 1 of article 97), are met:

“a) Evidence exists of net costs, further to an audit, that are deemed to be unfair by ANACOM, according to paragraph 1 a) and paragraph 2 of article 95 and articles 96 and 97 of Law No. 5/2004, of 10 February, as amended and republished by Law No. 51/2011, of 13 September;

b) The universal service provider requests of the Government compensation of costs referred to in the preceding point”.

It is noted that, under paragraph 4 of this article, the USP is required to request of the Government the compensation for CLSU that are approved further to the audit within at least five days from notification of the final decision of approval by ANACOM of the amount of the referred costs, paragraph 5 providing that compliance with obligations referred to in the preceding paragraphs, within the time-limits established therein, are deemed to be a requirement for the financing of CLSU incurred in the period preceding the tender designation.

MEO was notified of final decisions on the approval of CLSU for 2012 and 2013, respectively, on 18.09.2015 and 21.12.2015, having requested the respective compensation of the Government by communications dated 24.09.2015 (registered at the Ministry of Economy on 25.09.2015) and 22.12.2015 (registered at the Ministry of Finance on 23.12.2105), within the time-limit set out in paragraph 4 of article 17 of the Fund Law. The Government, by letters received at this Authority on 14.10.2016, informed ANACOM that the Secretary of State of Infrastructures had agreed with the matter and also that the Assistant Secretary of State for Treasury and Finance had approved MEO’s request and had called the FCSU to compensate CLSU for 2012 and 2013.

As such, under the conditions described above, it was found that requirements defined in article 17 of the Fund Law - (a) existence of CLSU, further to the audit, which were approved and deemed by ANACOM to be unfair, and (b) request by MEO to the Government for compensation of CLSU approved by ANACOM within at the most 5 working days from notification of the respective final decisions - to ensure via the FCSU the financing of CLSU approved in 2015, concerning CLSU for 2012 and 2013, have thus been met.

As regards the financing of CLSU incurred in subsequently to the USP tender designation, the Fund Law lays down in article 6 that the compensation fund is intended to finance CLSU determined in the scope of tenders referred to in paragraph 3 of article 99 of ECL and deemed by ANACOM to be unfair, articles 10 and 11 respectively ruling criteria for sharing net costs and the entry of contributions. It is recalled in this scope that, by determination of 07.02.2012, ANACOM established that the values that resulted from tenders (which at the time only covered the provision of connection to a public communications network at a fixed location and of publicly available telephone services and the provision of public pay-telephones) would be deemed to be an unfair burden. With the subsequent change of paradigm associated to the provision of a comprehensive telephone directory and of a comprehensive telephone directory enquiry service, this US provision was also deemed likely to represent an unfair burden and, consequently, in the scope of the tender that led to the respective award, the remuneration of the USP to be designated was provided for, so that this provision was ensured.

In line with the above, and in compliance with article 97, paragraph 1 of ECL, net costs resulting from all US provisions were and are deemed to be unfair and, as such, they are required to be financed, under the terms and conditions set out in the respective tender statutory instruments, as well as in the law that lays down the compensation fund.

In this context, it is emphasized that contracts concluded between tender-designated USPs and the Portuguese State specify the amount of CLSU to be compensated as well as rules to be applied on the financing of costs concerned resulting from the US provision, vide clause 13 of contracts on (i) the provision of connection to a public communications network at a fixed location and of publicly available telephone services and the provision of public pay-phones, both concluded in 2014, and (ii) the provision of a comprehensive telephone directory and of a comprehensive telephone directory enquiry service, concluded in 2015.

Tables below present compensation values for CLSU incurred by USPs in the scope of the provision of the US, under contracts concluded with the Portuguese State.

Source: Contracts concluded between the Portuguese State and ex-ZON and between the Portuguese State and ex-Optimus, and ANACOM calculations

Source: Contract concluded between the Portuguese State and ex-PTC, and ANACOM calculations

Source: Contract concluded between the Portuguese State and MEO on 10.07.2015, and ANACOM calculations.

It thus follows that the overall amount to be compensated for CLSU incurred by USPs, under concluded contracts, for 2015, is 4,575,732.42 Euros (4 million, five hundred and seventy five thousand, seven hundred and thirty two Euros and forty two cents)².

On 15.12.2016, the Draft Decision (DD) was approved, and submitted to the prior hearing of stakeholders required to contribute to the compensation fund, under articles 121 and 122 of the APC, for 10 working days. The establishment or modification of values concerning the eligible turnover, further to audit or verification undertaken by ANACOM, was also subject to a prior hearing for the same time period.

Timely comments were received from AT&T - Serviços de Telecomunicações, Sociedade Unipessoal, Lda, Indra Sistemas de Portugal, S.A., MEO - Serviços de Comunicações e Multimédia, S.A, NOS Comunicações, S.A, NOS Madeira Comunicações, S.A., NOS Açores Comunicações, S.A. and Vodafone Portugal - Comunicações Pessoais, S.A.

With the prior hearing of stakeholders, the requirement in paragraph 4 of article 11 of the referred Law was thus met, which applies directly and also by reference provided for in paragraph 3 of article 19, which determines that the list with the following information is submitted to a prior hearing, under the Administrative Procedure Code:

• Bodies required to contribute to the compensation fund.
• Eligible turnover (ET) for calculation of contributions due to the compensation fund.
• Amount of contributions due by each body, plus compensatory interest due under paragraph 7 of article 11 of the mentioned law, if any.
• Amount of compensation to be paid to the USP.
• Any justified corrections and adjustments, namely in accordance with data collected as regards the actual ET achieved, where appropriate.

This decision implements the ruling laid down in the Fund Law, specifically as regards:

a) The contribution provided for in article 11 of the Fund Law concerning compensation of CLSU determined in the scope of tenders for designation of USP(s) and incurred in by these USP(s) in 2015;

b) The extraordinary contribution provided for in article 18 of the same Law, concerning compensation for CLSU for the period preceding the tender designation of the USP, approved by ANACOM in 2015 and which refer to CLSU for 2012 and 2013.