ANACOM makes recommendations to the Government in relation to the universal service of electronic communications

In May 2018, ANACOM recommended to the Government that it should not designate providers for the various components of the universal service of electronic communications. ANACOM's recommendation was based on the very low level of use of each of the universal service components (fixed telephone service, public pay-telephones and comprehensive telephone directory and 118 directory enquiries service) and that, therefore, the cost of financing new designations, both for the market as a whole and indirectly for end-consumers, is disproportionate and entirely unwarranted, because it brings no relevant benefit.

In fact, the needs of consumers are met by the set of operators active in the market in all these services: the available fixed networks cover the majority of the population and several operators provide this service, even offering fixed telephone services at lower prices than the universal service. Likewise, in the case of public pay-telephones, the universal service makes up the minority of total stock available in the market, representing 45% - i.e., the majority of public pay-telephones (55%) are operated by different operators and are outside the universal service. Although continuity of public pay-telephones is not in question, as operated by operators, as already occurs in most cases, ANACOM recommends monitoring the market to assess the need for the adoption of alternative solutions. As regards telephone directories and the directory enquiries service, information can also be accessed through electronic directories, search engines and social networks, as well as by using the services provided in the '18XY' numbering range. Only 5% of telephone numbers are included in directories and 118 and represent a cost of 1.9 million euros.

It should be recalled that the universal service has cost 22 million euros over a five-year period of provisions in relation to the fixed telephone service and the public pay-telephone service. This sum could be applied in a way that brings greater benefit to consumers, in particular through reductions in the prices of communications, or in the development of telecommunications, for example by strengthening national coverage of next-generation networks and so expanding the population access to broadband Internet.

In this framework, the proposal presented by ANACOM to the Government and to Assembleia da República (Assembly of the Republic) to amend Lei das Comunicações Eletrónicas (Electronic Communications Law) contains several amendments setting out that designation of providers for the various services which make up the scope of the universal service should be promoted only where it is considered that citizens have needs which should be satisfied by these services and which are not ensured by the normal functioning of the market.

Considering that the current contracts for the universal service of public pay-telephones and fixed telephony are due to expire within a short time, and envisaging that no change to the law would be made in time, Government asked ANACOM to commence the designation process by launching a public consultation.

This consultation, which concluded on 7 March, saw contributions from 15 undertakings. These included several Parish Councils which called for priority to be given to the improvement of mobile network coverage and broadband internet access. ANACOM then decided to recommend to the Government that, unless the law is amended in the meantime, public tenders may be held to designate a provider at a national level for the fixed telephone service and another for the public pay-telephone service.

According to the recommendation, the designation of providers should be for a transitional period. As such, it is proposed that the contracts should be valid for a period of one year, extendable for a further year.

ANACOM recommends that the base price in the case of the tender for the provision of fixed telephone service be 50 thousand euros for the first year of the contract (compared with the current cost of 1.9 million euros per year). If the contract is extended, and if the number of calls during the first year of the contract has not exceeded 20, the financing amount will be reduced to half the amount of the first year's financing.

In the offer of public pay-telephones, the recommended base price is 52,500 euros for the one-year duration of the contract (compared with a current cost of 2.5 million euros for a stock of 8,222 public pay-telephones) to ensure availability of a total stock of 175 public pay-telephones from a set of 175 predominantly rural parishes and on all the islands of the autonomous regions of the Azores and Madeira.

According to ANACOM's recommendation, an entity should be selected for each of the services, which, fulfilling the defined quality of service levels and ensuring affordability for consumers, presents the proposal with the lowest cost for the total period of designation.

On this occasion, ANACOM also approved a decision on the conditions and specifications governing universal service provision of (i) connection to a public communications network at a fixed location and provision of publicly available telephones through that connection and (ii) public pay-telephones.

If there is a legislative change, such as that recommended by ANACOM, there will be no need to launch the tender procedures to select the entities that will be charged with ensuring provision of the services in question.