Portuguese telecommunications and Internet regulatory market - a brief overview

The Portuguese telecommunications market has been fully liberalised since January 2000, with 20 network operators and 13 service operators currently offering fixed telephony services to customers.
Portugal applied for the postponement of European Community Directives, which in some cases where granted. As a result, the liberalisation schedule for Portugal was slightly different from the schedule applicable to the majority of member states, and full liberalisation only occurred two years after the 1st of January 1998, the date imposed by Directive 96/19/EC.

Telecommunications networks

The establishment and supply of public telecommunications networks is subject to a licence. The licensing procedure can be found in Decree-Law no. 381-A/97, of December 30, that implements rules from the EU's Directives 97/13/EC, 96/2/EC and 96/19/EC.

The implementation and provision of cable-television distribution networks is subject to a different authorisation procedure, and here the rules may be found in a separate act, Decree-Law no. 241/97, September 18. The Decree-Law no. 241/97, that implements Directive 95/51/EC, permits cable-television distribution networks to be used to transmit telecommunications signals. If a cable-distribution network is used to transmit telecommunications signals, the network operator requires both licences. Article 2 of Decree-Law no. 290-A/99, of July 30, approves the exploitation rules applicable to public telecommunications networks and expressly stipulates the need to obtain two separate licences.

ANACOM (the national regulation authority) is the entity entitled to issue the public telecommunications network operator licences (Article 3 of Decree-Law No. 381-A/97). A public network operator licence is subject to a fee of €9976. The annual fee for operating a public telecommunication network is also €9976. (Administrative Order No. 1230/99). The minister in charge of telecommunications grants the licence for the development and supply of a cable television distribution network, in accordance to the Decree-Law no. 241/97, of September 18, after a proposal by the ANACOM.

Authorisations are granted by geographical area, or municípios (administrative divisions of the territory). There is no set limit to the number of licences an operator can apply for. The operator of a cable distribution network must distribute the public service channels (currently two channels) as stated in Article 12 of Decree-Law no. 241/97. The operator - by virtue of this authorisation - may install its own satellite communications system to transport television signals to its distribution centres (Article 13 of Decree-Law no. 241/97) without recourse to a separate licence procedure. In areas of very low population density, the cable operator may apply for the use of frequencies for the radio transmission of the television signal. In this case a separate authorisation is necessary (Article 22 of Decree-Law no. 241/97). Authorisations are valid for 15 years, and are renewable. The authorisation for the exploitation of a cable distribution network is subject to a fee of Esc 2,000,000 (Administrative Order No. 110/99, of January 14). There is no annual fee applicable to cable distribution network operators.

A licence to operate a public telecommunications network or an authorisation to exploit a cable distribution network does not exempt operators from securing authorisations from local administrative authorities when these are required (Article 17 (4) of Decree-Law no. 381-A/97) for the deployment of network infrastructure. The level for obtaining authorisations for construction permits, licences to place cable underground, etc, is at the town level (municípios) and there is no higher level or mechanism to obtain authorisations for a larger area. If, due to environmental or cultural reasons, it is not possible to build new infrastructure operators may access existing infrastructure.

Apart from a public telecommunications network operator licence, a different licence is required for the operation of a network of radio base stations. If the network is radio-based, Decree-Law No. 151-A/2000, of July 20, establishes the procedures involved in obtaining such a licence. The licence and the actual use of the radio spectrum are subject to fees, which vary according to the number of radio stations used and the amount of radio spectrum used.

Licensing
Law 91/97, of August 1, the Basic Law of Telecommunications, sets out the main principles applicable to the sector. Broadcast services are excluded from scope of this law. This means that television services are governed by special rules, but a cable network over which television signals are transmitted are covered by this law.

The Autoridade Nacional de Comunicações (ANACOM), the Portuguese regulatory authority, is responsible for overseeing the sector, for managing the radio spectrum, for defining interconnection rules for services and networks exploited by operators with significant market power, and for the normalisation and approval of telecommunications equipment. There is a clear distinction in law 91/97 between networks and services, and this distinction is present throughout the regulation of the sector.

Telecommunication services
The provision of telecommunication services is normally subject to a registration procedure by ANACOM (Article 4 of Decree-Law No. 381-A/97). Internet service providers are also subject to this registration procedure. Registration is subject to a fee of Esc 40,000 ($181.85). There is also an annual fee for the provision of services that are subject to registration of Esc 1,500,000 ($6,821.09) (Administrative Order No. 1230/99).

The exceptions to the rule that the provision of telecommunications services is subject to a mere registration procedure, are the provision of fixed-voice telephony and the provision of services that require radio frequencies. In these cases a licence is required. The licence for the provision of fixed-voice telephony follows the same rules as the licence for public telecommunications network operations. As of July 2001, 30 licences for fixed voice telephony have been awarded. The issue of a license is subject to a fee of Esc 200, 000. There is also an annual fee of Esc 2,000,000 (Administrative Order No. 1230/99). The licences for services that require radio frequencies are awarded after a public tender procedure. In this case, the public tender is organised by ANACOM, but the licence is awarded by the respective minister.

The second and third mobile telephony (GSM) licences were awarded after a public tender (Administrative Rules No. 241/91, of March 23, and No. 447-A/97, of July 7), as were the 11 Fixed Wireless Access licences (Administrative Rule No. 465-B/99, of June 25). Some wireless local loop and 3G operators have difficulties in fulfilling their licence conditions as far as network roll-out is concerned, and would like to see licence terms relaxed. ANACOM has announced a deferment of 3G roll-out as a result to the 31st December 2002. The four UMTS licences were awarded after a public tender (Administrative Rules No. 532-A/2000, of March 31, and No. 532-B/2000, of July 31).

Television

At the moment there are three public television channels. Two of them use Portugal Telecom's (the incumbent operator) broadcasting infrastructure; another has its own transmission network. The incumbent's tariffs are supervised by the NRA (ANACOM) and the competition authority (DGCC) and are required to be cost oriented. The public tender for the granting of a licence for the Digital Terrestrial Television (DTT) network operator, was launched on 6 April 2001 (Administrative Rule No. 346/2001), with a single licence awarded to the consortium PTDP - Plataforma de Televisão Digital Portuguesa, S.A. The cable distribution network licence allows the operator to transmit third-party television programmes.

Digital cable services in some areas of the country are only now being launched. The largest cable-operator (TV-Cabo) is a subsidiary of the incumbent telecommunications operator (PT). In the 3rd quarter of 2001 there were 1 054 000 subscribers for analogue cable TV services. If the cable operator wishes to offer telecommunications services and/or lease transmission capacity to telecommunications operators it must obtain a public telecommunications network operator licence. The actual provision of any services implies additional licensing or authorisation procedures. Thus, if a cable operator wishes to offer internet access over its network it must be registered with ANACOM as an internet service provider. Similarly, the provision of fixed-voice telephony by a cable operator is only possible upon obtaining a fixed-voice telephony licence.

This principle applies to all services, and if the services are only subject to a registration procedure, a new registration is not necessary, but ANACOM must be informed of any new service that will be provided by the registered operator. If the cable operator wishes to transmit its own programmes, a separate authorisation is needed. This authorisation is sought from the Alta Autoridade para a Comunicação Social (AACS), the Media Regulatory Authority (Article 13 of Law No. 31-A/98). Television operators must ensure that the national channels transmitted reach 75% of the national territory after three years and 95% after five years, using their own network, third party networks or both (Article 16 of Decree-Law No. 237/98). There is no fee applicable to the authorisation, nor is there an annual fee applicable to the television operator.

Competition in the telecommunications market

Although the Portuguese market has been liberalised, the dominance of the incumbent remains a major obstacle to competition. The NRA, ANACOM has made numerous interventions in the market, with the aim of ensuring effective competition. Recent examples of this intervention may be found in the internet access model, number portability, and in the unbundling of the local loop. The model of internet access has been recently altered by an ANACOM decision of June 25 2001. Before this, internet access was based on the fixed-voice telephony model and consisted of revenue sharing between the incumbent and the ISPs. Number portability was introduced in June 30 2001. The model chosen by ANACOM is a query-on-release solution and the creation of a reference database of transferred numbers, managed by an independent entity. By a decision of June 28 2001, ANACOM altered the incumbent's reference offer of unbundling of the local loop, determining, inter alia, the maximum prices that can be charged by the incumbent.

E-commerce

The legal recognition of electronic documents and digital signatures is governed by Decree-Law No. 290-D/99, of August 2. This act makes an express reference to the proposal of the European Parliament and Council Directive on a common framework for electronic signatures, which was approved after Decree-Law No. 290-D/99 came into force. Electronic documents have the same legal recognition as hand-written documents when their content may be represented as a written statement. When an electronic document has a digital signature certified by an accredited certification authority, it has the same legal value as evidence as a hand written signed document. Decree-Law No. 375/99, of September 18, governs the legal recognition of electronic invoices. The rule is that an electronic invoice that has a digital signature (in accordance with Decree-Law No. 290-D/99) has the same legal recognition as a paper invoice. This act provides that the Portuguese tax authorities have special duties in supervising the use of electronic invoices, including a prior authorisation procedure for entities wishing to issue electronic invoices.

Electronic contracts

Portugal is openly awaiting the implementation of the directive on electronic commerce (2000/31/EC). Nevertheless, there is legislation that applies to issues that will presumably be covered by the directive. Article 6 of Decree-Law no. 143/2001, that implements the Distance Contracts Directive (97/7/EC) requires that consumers have a right to withdraw from distance contracts without penalty. This right to withdraw must be exercised within fourteen days of:
· The date on which the goods are received (if the contract is for the supply of goods)
· The later of the dates on which the contract is concluded and the date on which the information required by Article 5 is provided (if the contract is for the supply of services)

However, if the supplier fails to provide the information required by Article 5 the right to withdraw can be exercised within a three-month period of the date of receipt of the goods or (in the case of services) conclusion of the contract. But if the supplier provides the Article 5 information during that three month period the 14 day period begins when that information is provided. The following categories of contract are excluded from this requirement:
· Contracts for the provision of services where service provision begins with the consumer's agreement, within the fourteen day period
· Contracts where the price of the subject matter of the contract is dependent on fluctuating financial markets beyond the control of the supplier
· Contracts for the supply of goods made to the consumer's specifications or clearly personalised, or which by their very nature cannot be returned or are likely to deteriorate or expire rapidly (for example, fresh food)
· Contracts for the supply of video or audio recordings or computer software where they have been unsealed by the consumer · Contracts for the supply of newspapers and magazines
· Contracts for betting and gambling services Where consumers withdraw under Article 6 they must be reimbursed by the supplier, in full, within 30 days.

The only charge that the consumer will incur is the direct cost of returning the goods, when he does not claim them. If the price of goods or services is wholly or partly covered by a credit agreement, the credit agreement (even if with a third party) must be cancelled without penalty.

Domain name registration

New rules have recently been published by the entity responsible for registration of domain names in Portugal, the FCCN (Fundação para a Computação Científica Nacional). The new rules have been in effect since 5 February 2001. One of the innovations is the creation of subdomains. The subdomains are not compulsory as applicants may register domain names directly under .pt or under the subdomains: .net.pt, .gov.pt, .org.pt, .edu.pt, .int.pt, .publ.pt, .com.pt, and .nome.pt.

· The .net.pt subdomain is reserved for telecommunications operators registered with the Portuguese Telecommunications Regulator
· The .gov.pt subdomain is reserved for the Portuguese government
· The .org.pt subdomain is reserved for non for profit organisations
· The .edu.pt subdomain is reserved for educational organizations · The .int.pt subdomain is reserved for international organisations and diplomatic representations registered in Portugal
· The .publ.pt subdomain is reserved for media publications registered with the Media Institute
· The .com.pt subdomain is open to all applicants
· The .nome.pt is open to all individual persons, either Portuguese nationals or residents.

Rules applicable to domain names registered under .pt

Five types of entity may register domain names under .pt: legal persons, public entities, individual merchants, professionals and trademark holders. The last two types of entity were introduced by the new rules. The significance of the eligibility of trademark holders is significant. According to the old rules, foreign entities were obliged to establish a local presence and register with the tax authorities in order to be able to register a domain name.

This is no longer the case. A foreign entity that holds a trademark may now register a domain name in Portugal without the need for the establishment of a local presence in Portugal. In this situation the trademark must be protected in Portugal (national, community or international trademark) and the domain name must correspond to the nominative elements of the trademark. The names registered under the .pt domain must correspond either to the name of the applicant entity or correspond to a trademark held by the applicant. The applicant may be the holder of the trademark or an entity authorised to use the trademark for the purpose of registering a domain name. When the domain name corresponds to a trademark the rules contain two conditions. The first condition is that the domain name must not correspond to a name that may create any confusion as to the ownership of the name, for example because it coincides with well known trademarks or trademarks with reputation that belong to third parties. The second condition is that the name may not be composed by expressions that do not have a distinctive character, because they designate the species, quality, quantity, purpose, value, geographic origin or production time if the goods or servi

ces, or other characteristics of the goods or services.

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