Explanations on the Implementation of Universal Service in the Electronic Communications Sector

Following the requests received from mass media representatives with a view to making clear certain legal aspects regarding the implementation of universal service in the electronic communications sector, ANRC releases the following explanations:

According to the ANRC Action Plan, published on January 15, 2004, the objective of promoting the end users’ interests by the implementation of universal service in the electronic communications sector was projected to have two phases. The first phase, i.e. elaborating the procedure for the designation of universal service providers, was completed in the second quarter of the current year, while the second phase, i.e. the actual performance of the designation procedure was scheduled for the third quarter of the current year.

By ANRC President’s Decision no.1074/2004, ANRC designated, ex officio, as universal service providers that will have the obligation to grant the end users subsidies for the services of access to the publicly available telephone network, at a fixed location, and facilities allowed in case of non-payment of the telephone bill, all the providers of services of access to the publicly available telephone network, at a fixed location, disregarding the network type and the technology used (services of access, in the meaning of ANRC President’s Decision no.1074/2004, was defined as “making available to the end users, based on a written contract and in exchange for a periodical tariff, usually on a monthly basis, the equipments and services necessary for them to benefit from publicly available telephone services”). This category was considered to include all the companies that submitted, according to the above mentioned decision, a notification certifying they render such services. The decision provided 15 days for the envisaged providers to submit the respective notification to ANRC. The notification does not take into account the turnover, the notoriety, or the existence of an own website of any of the companies; it only requires that the respective company be present on the electronic communications market. The unique criterion based on which the 10 companies referred to in the ANRC Press Release of September 13, 2004 were designated as universal service providers with a view to granting the subsidies and facilities for the low income families was the notification submitted to ANRC regarding their capacity as providers of services of access to the publicly available telephone network, at a fixed location.

According to ANRC President’s Decisions, there are two types of universal service providers: universal service providers who grant subsidies and facilities and universal service providers who install telecentres or public telephones. Thus, one should distinguish between the first category of universal service providers, who are designated ex officio, and the second category, that are granted the right of universal service providers upon tender or, only under exceptional circumstances, ex officio, should the legal conditions for the designation of a tender winner not be met. The designation of the providers belonging to the first category is aimed at ensuring access to a minimum of communications services for the persons with low income. Access to the means of communications is considered one of the fundamental rights of a citizen, according to the European legislation with which Romania is harmonised, and which guides also countries having a rich experience in regulating the communications sector and high standards of life, such as France, England or Germany, and where such universal service providers granting facilities and subsidies are designated in order to provide access to telephone service for the users with low income.

As well, one should distinguish between the notification to be submitted by the service providers regarding the provision of services of access to the publicly available telephone network, at a fixed location, and the obligatory statements on one’s own responsibility on the incomes obtained from interconnection and roaming services to be transmitted by the companies providing public networks of electronic communications or publicly available telephone services, with a turnover for the year 2003 exceeding or equal to EUR3 million. ANRC required such report in order to deduct the respective amounts from calculating the contribution to the universal service fund. The 0,8% percent shall be applied to the difference between the turnover and the incomes obtained from interconnection and roaming reported by each provider and corresponds to the annual contribution to the universal service fund. It should be once again mentioned that this percent shall apply only to the companies with a turnover exceeding or equal to EUR3 million. In countries such as France, Norway or Switzerland, the percent of the turnover to be paid for the universal service fund ranges between 2% and 3%, reaching 5% in the USA, despite these countries’ lower requirements for the financing of universal service.

Upon preliminary calculations, the value of the universal service fund estimated for 2004 will reach approximately EUR16 million, given the fact that the value of the electronic communications market in Romania amounts to EUR2.645 billion for 2003, according to the European Information Technology Observatory. Out of this fund, 35% is destined to cover the subsidies, i.e. an estimated amount of EUR5.6 million. This amount shall be divided by the number of standard requests received from the families with net monthly incomes lower than ROL2,460,000 per family member, while the amount of an individual subsidy shall not exceed the cost of providing the services of access to the public telephone network (the monthly subscription). The universal service provider shall have the right to be disimbursed the net cost for the provision of services within the scope of universal service, i.e. an amount equal to the subsidies granted to the end users.

The facilities granted in case of non-payment of the telephone bill are aimed especially to people with low incomes, who are likely to be unable to pay the cost of the provision of the telephone service on time, within 90 days (a period equal to that currently provided by Romtelecom S.A.). In case of non-payment of the telephone bill, the telephone services shall be suspended, but over the respective period the people shall be ensured access to emergency services (such as ambulance, police, fire brigade) or to green numbers, which are cost-free for all the telephone services users, in order to prevent additional costs for the company providing such services. Should the user – willingly or due to the impossibility to pay the telephone bill – persist in this situation, the ANRC Decision provides the disconnection from the telephone services and the obligation to pay the unpaid bills, thus preventing the bad payers from benefiting from the respective services any longer.