ANCOM launches for public consultation the draft decision on the approval of the Regulation on the cost calculation model to be developed by the National Radiocommunications Company (SNR), based on the fully allocated cost method. In early 2009, SNR was designated operator with significant power (SMP) on the market of analogue terrestrial broadcasting transmission of public radio and television programme services. Thus, obligations of cost recovery and tariff control, based on a cost accounting system drawn up pursuant to a regulation approved by the regulatory authority, were imposed on it.
The regulation submitted for public consultation follows the ANC President’s Decision no.169/2009 and entails a set of rules, principles and procedures that will enable SNR to develop a cost calculation system so as to observe the obligation of tariff cost-orientation. Therefore, by enforcing the Regulation, SNR – which holds a monopoly position on the market of analogue broadcasting transmission services of public television and radio programmes – will be able to offer the Authority the information required for establishing certain tariffs based on the real costs incurred by the service provision.
In elaborating the draft regulation submitted for consultation, ANCOM considered, on the one hand, the company’s specific activity and, on the other hand, the necessity to apply certain principles and methodologies in line with the Community practice and legislation in the cost calculation field. The fully allocated cost method implies the full distribution of the operator’s costs among all the services it provides, proportionally to the contribution of the activities. By adopting this regulation, ANCOM aims at elaborating a framework that would allow for determining the real costs of the regulated services, by ensuring the implementation of objective and transparent criteria as regards the allocation of SNR costs among the services it provides.
In elaborating the Regulation, ANCOM also took into consideration the objectives enlisted in Article 13(2) of the Government Ordinance no.34/2002 on the access to the public electronic communications networks and to the associated infrastructure, as well as their interconnection, approved, with amendments and completions, by Law no.527/2002, with the subsequent amendments and completions. Thus, the regulation aims at implementing a costing model that would promote both the SNR economic efficiency and the maximization of its end-users’ benefits.
“I do believe that, in addition to the regulatory goals, the implementation of a cost calculation system as the one under this regulation will help the SNR management evaluate the efficiency of providing the existing services and to launch new, competitive services, especially in the context of the digitization of the audiovisual programme transmission services,” Catalin Marinescu, the President of ANCOM, has shown.
The Regulation sets the terms for the return on investment so as to incentivize the effective investment of the society, the criteria regarding the treatment of the cost information, the principles and rules for allocating the costs etc. In Short, all the essential elements that must be considered when developing a transparent costing model and that could ensure accurate results. Furthermore, the necessity of reconciling the cost calculation model with the SNR statutory financial statements, as well as the conditions for auditing and publishing the cost calculation model are also provided.
SNR has the obligation to develop and implement the costing model in accordance with the ANCOM regulation, within 1 year from its adoption date.
The draft decision is available for consultation on the ANCOM website. The interested entities may submit their comments and suggestions, by 16 October 2009, at the ANCOM headquarters in 2 Delea Noua Street, Bucharest 3, directly to the Registry or by means of the Authority’s regional divisions. Comments may also be sent by fax to +40 372 845 402 or by e-mail to consultare@ancom.org.ro.