Opinion of the Advisory Council


The Regulation Report and the Activities Report of ICP-ANACOM regarding the year 2005 were presented and delivered to the Advisory Council on 30 May 2006, at a meeting that was called for that purpose. The Council then decided, as with the previous proceeding, to set up a Specialized Committee to prepare the corresponding draft Opinions.

These are the terms according to which the Advisory Council approved the following opinion:


1. The Regulation and the Activities Reports were presented to the Advisory Council at a time when it was possible to use all the data therein, for they were updated and relevant. However, the Advisory Council understands that the ideal moment for their presentation should not be after the end of the first third of the year following that of their account.

2. The mentioned Reports fulfil the legal requirements and try to meet the interest of the several targeted readers, regarding both the organization of the subjects dealt with and the information made available by the sector. It should be stressed that the Report, in its whole ? regulation, activities and state of the sector ? respects in many ways ? organization, description and grounds of the regulatory action, focus on the analytical handling of matters instead of their mere description ? the recommendations made by the Regulatory Council regarding the year 2004. Its new organization and method make it easier to look it up and to understand the Regulator?s underlying motives, its priorities and its goals, which means that these Reports are simultaneously a reference document for the sector and a tool to evaluate ICP-ANACOM?s performance.


3. Although we hereby underline and appreciate the somewhat achieved Regulation Report?s intent to define strategic objectives and to identify priorities, there still lacks a clear and measurable relation between the actions that took place on one hand and, on the other hand, the set objectives or the defined and quantified targets, regarding namely deadline adherence and achieved results, which, if part of the Regulation Report, would greatly improve its value and could support or not the sometimes optimistic vision printed on it. It should be noted that:  

(i) No reference is made to restricting factors or difficulties within the scope of the regulatory activity;

(ii)The Report contains no reasons explaining the substantial delays in the implementation process of the announced regulatory measures, or even their complete lack of implementation, which certainly exist.

Considering the negative effects of regulatory uncertainty on the accurate and timely generation of business plans and budgeting, the operators name some examples of situations or measures justifying the previous remarks, such as the case with the distribution of contents over the cable network, universal service, which are fields with apparent regulatory difficulties, or measures known by the acronyms SLRO, LLRO and RCAO, interconnection flat rate, Win Back, price readjustments of the wholesale offers for 2006 (interconnection, preselection/portability, local loops).

4. Natural transparency and accountability needs of a Regulatory Authority make it suitable to put forward the reasons justifying situations of long delay or of lack of implementation of the announced measures and with a closed audit procedure. Also for the sake of the certainty, predictability and stability of the regulatory policy, it is absolutely necessary to thoroughly and timely update the market on all situations.

5. For a complete understanding of the regulatory policy, it is also important that ICP-ANACOM explains in the Regulatory Report which specific contribution each of the several regulatory measures gave to each strategic objective. Standing out within this scope are the objectives identified by the Regulator for the period 2006/8 ?to foster innovation and investment in infrastructures?, due to their importance to the market in general, and ?to foster consumer benefits?, the main recipients of the regulatory action.

This Regulation Report, as the previous ones, takes as its single reference the European averages, not weighting them, which can lead to some reservations, for as the mentioned averages are already beginning to take into account the enlargement of the E.U. and it is becoming an increasingly common understanding that the objective of nearing such averages (e.g. wholesale offers) will not give the sector the chance to become the driver of the economy in general. The joint use of other measurement tools, e.g., the best European practices benchmarks, is thus recommended.


6. Regarding Part II of the Report, dealing with the current state of the sector, the focus on the evolution of the competition levels within the several services is hereby duly appreciated, although it is also noted that there is still a long way to go before overall and systematic satisfactory levels can be reached. The presentation of a deeper analysis of the factors limiting the development of the sector, focusing on both international comparisons and the percent evolution of growth, is thus considered suitable.

7. Also within this framework, it must be noted that international MTS price comparisons made by ICP-ANACOM and part of the Report come from the OCDE/Teligen database, which, as mentioned in the methodology note, is considered to have out-of-date tariff schemes (not in force for several years).

Also, as ICP-ANACOM mentions in the Report, in the methodology note, OCDE/Teligen?s baskets may not accurately translate the service?s usage profile of Portuguese users.

It is thus verified that the assumptions used for the making of these surveys lack greater rigour.

Therefore, ICP-ANACOM needs to deeply revaluate the data it uses in international MTS price plans comparisons, given the flaws and the limitation of the data it refers to.

Such analysis will forcibly lead to different conclusions, namely on the assessment of how competitive MTS?s tariff plans available on the national market are.


8. Part III of the document, on ANACOM?s activities, would be improved if completed with general activity and performance indicators (e.g., average response time to demands from operators, average time between the response date to a public consultation and the publication of a determination or final decision, number of demanded and executed interventions in each area of regulation) and some available performance efficiency indicators (e.g. proportion of spectrum inspections that solved the situations demanding them), preferably with reference to benchmarks.

9. More specifically, and regarding inspection, there is a lack of references to actions aimed at the "in loco" monitoring of the fulfilment of ANACOM?s determinations.

10. Concerning the international representation activity, and once again in a framework of true accountability, the Report should contain a detailed reference to the strategies, initiatives, consultation to national interested parties and positions of the Portuguese delegations (and how they coordinated on a national level) at the several bodies. This activity is normally described in very broad terms.

11. It is also hereby suggested that the Activities Report should contain a reference to the regulation costs, making it possible to compare Portugal with the remaining European countries, regarding namely the radio spectrum billing.

12. Taking into account the length of the documents, it is hereby recommended that a condensed document should be prepared, for a faster reference.

Observations and comments herein do not set aside the presentation of the Regulation Report and of the Activities Report to the Government, in compliance with the terms of article 51, no. 1, of ICP-ANACOM?s statutes.

Lisbon, 10 July 2006