The Universal Service financing

The net cost of the Universal Service provision is the difference between the efficient costs of the provision of services for which the designation was requested and the revenues generated by the provision of these services (including the benefits obtained as a result of holding the capacity as a Universal Service provider – notoriety, ubiquity, warranty of service quality certified by the compliance with the minimum requirements imposed under the designation decision etc.) to which is added the positive difference between the revenues obtained from the provision of other electronic communications services than those included in the scope of Universal Service to the end-users residing in the locality for which the Universal Service provider was designated and the efficient costs of the provision of these services.

The compensation of the net cost is made only upon the Universal Service provider’s request. In this regard, the Universal Service provider will have the obligation to send the status on the costs, revenues and capital engaged, only if requiring the compensation of this net cost.

The compensation of the net cost of the provision of services within the scope of Universal Service is made through a financing mechanism, managed by ANCOM, whose financial resources come from the contributions of the providers of electronic communications public networks and of the providers of publicly available telephone services. For the certain needs for financing the Universal Service, ANCOM will charge the providers of electronic communications public networks and the providers of publicly available telephone services a certain percentage from the turnover, minus the revenues derived from the provision of access in the wholesale market, including from the offered interconnection and roaming services, as well as from the provision of audio-visual programme retransmission services in the retail market.

In order to avoid a market entry barrier, ANCOM considers that only the providers with a turnover, for the previous year, higher or equal to EUR 3,000,000 must contribute to this mechanism. It is unlikely that the new-entrants reach such a turnover from the first year.

Alternatively, instead of the turnover, in view of determining the providers obliged to pay the contribution, as well as of establishing the amount of the contribution, the providers of electronic communications public networks and the providers of publicly available telephone services may request to take into consideration the revenues obtained exclusively from the provision of electronic communications networks or services. If this second choice is preferred, the providers will have to keep separate accounts as regards the revenues obtained from the provision of electronic communications networks or services, as if these activities were performed by entities with distinct legal personality.

The financing needs will be established annually by summing the net costs resulted under the conditions provided in the designation decisions, thus being removed the possibility that part of the collected funds remained unused.

The Universal Service provider will be transferred the amount representing the net cost of the provision of services within the scope of Universal Service within a reasonable timeframe, which ensures the proper collection by ANCOM of the individual contributions owed by the providers obliged to compensate the net cost of the Universal Service provision.

The contributions collected from the providers of electronic communications public networks and from the providers of publicly available telephone services, on grounds of the ANRC President’s Decision no.1074/2004, determined the existence of a positive balance for financing the net cost of the provision of services within the scope of Universal Service.

Therefore, ANCOM proposes that the provisions of Chapter Five under the draft decision on the contributions owed by the providers of electronic communications public networks and the providers of publicly available telephone services be applied only when it is estimated that the needs of compensation of the total net cost will not exceed the existing available funds. Hence, the financing mechanism will be applied from a subsequent date, to be established by decision of the ANCOM President. The moment from which the providers will have the obligation to observe the provisions of Chapter Five on financing will be established in advance so that they could benefit from a predictable time horizon in which to take the measures required to ensure the compliance with the provisions under the decision.