GEO 54/2019 amendments in the field of electronic communications and the physical infrastructure of communication networks

In brief

Government Emergency Ordinance (GEO) no. 54/2019 was adopted and came into force yesterday, amending and completing some normative acts in the field of electronic communications and regarding the physical infrastructure of electronic communications networks. This normative act amends some provisions of GEO 114/2019 and GEO 19/2019 in the field of telecommunications. You can consult the PwC newsletters on OUG 114/2018 and OUG 19/2019 by accessing the following links:

In detail

Granting of licences for the use of radio frequencies

Licences for using radio frequencies are to be granted through competitive or comparative selection procedures based on the payment of a licence fee. The fee amount and payment conditions will be determined on a case-by-case basis, as established through a Government Decision (GD) initiated by the National Authority for the Administration and Regulation in Communications (ANCOM).

The minimum licence fee values specified in GEO 114/2018 as:

for the radio frequency bands 703-733 MHz / 758-788 MHz (2 x 30 MHz), 738-753 MHz (1 x 15 MHz) and 880-915 MHz / 925-960 MHz (2 x 35 MHz) - 4% of the previous year’s turnover, as recorded at the level of the NACE branch where the electronic communications activity is conducted, multiplied by the number of years for which the licence was granted,
for the radio frequency bands 791 to 821 MHz / 832 to 862 MHz (2 x 30 MHz), 1920 to 1980/2110 to 2170 MHz (2 x 60 MHz) and 3400 to 3800 MHz (400 MHz) - 2% of the previous year’s turnover, as recorded at the level of the CAEN branch where the electronic communications activity is conducted, multiplied by the number of years for which the licence was granted,

have been eliminated.

The competitive selection process – representing the procedure for granting licence(s) to use radio frequencies to the tender winner / winners offering the highest licence fee value above the minimum value set by the GD – has been clarified.

Extending the validity period of the licence for the use of radio frequencies

The extension of the validity period of the licence for the use of radio frequencies granted through the selection procedure is conditioned upon payment of a licence fee to be established in a GD initiated by ANCOM for each individual frequency band. The initial provision requiring payment of a fee for extending licence validity has eliminated (i.e. the fee of 4% of the turnover of the year preceding the extension, registered at the level of the CAEN branch where the electronic communications activity is conducted, multiplied by the number of years for which the licence is granted, no longer applies).

Monitoring fee

The annual amount charged by ANCOM from monitoring fees (SaTM) is calculated using the following formula:

SaTM=Administrative costs ANCOM -Income from other sources ANCOM

where:

The ANCOM administrative costs are those related to the management, control and application of the general authorisation regime, the rights to use limited resources or the obligations provided by the specific legislation in the field of electronic communications or postal services (e.g. costs incurred for cooperation, harmonisation and international standardisation, and market analysis).
Income from other sources, excluding amounts to cover the above-mentioned ANCOM costs and amounts resulting from budget surpluses in previous years.

The monitoring fee pertaining to suppliers of public electronic communications networks and suppliers of electronic communications services (previously set at 3% of the previous year’s turnover) will be determined annually, using the following formula, capped at 2%:

TM (%)=(SaTM-X)/(Ca ) ≤2%

where:

X represents the amounts collected by ANRE from the monitoring fee in cases where the company ceases to be a supplier before the annual monitoring fee has been determined, and from the fees set in previous years at the end of the month preceding that in which the percentage is determined.
Ca is the aggregate turnover of the companies owing the monitoring fee.

Postal service providers are no longer required to pay the monitoring fee to ANCOM.

Another provision now eliminated is that previously requiring suppliers to keep separate accounting of revenues generated from the provision of services of electronic communications networks or postal services for determining the monitoring fee not taking into account turnover, but rather the revenues resulting exclusively from the provision or services of electronic communications networks or from the provision of postal services. The certification of these revenues is to be carried out by an independent auditor, in compliance with GEO 75/1999, or by an accountant authorised according to the legislation in force. There is no need for ANRE to set these conditions.

Application of the fine of up to 10% on turnover established by GEO 114/2018 and suspended by GEO 19/2019 until 1 September 2019 has been suspended again, until 15 March 2020

Application of the fine of up to 10% on turnover, in proportion to the number of users served without authorisation (at 1% per 100 users), imposed on providers of electronic communications networks which conclude contracts for installation, maintenance, replacement of electronic communications networks and the infrastructure elements necessary to support them or allow access to property without the right of access or in the absence of a building permit, has been suspended until 15 March 2020.

Source: Emergency Ordinance amending and completing some normative acts in the field of electronic communications and the physical infrastructure of the communication networks (OUG 54/2019), published in Official Gazette no. 0552 of 04 July 2019.

The takeaway

The minimum fee value previously set by GEO 114/2018 (4% / 2% of turnover, depending on the radio frequency bands) has been eliminated for granting licences for the use of radio frequencies through competitive or comparative selection procedures. According to the new provisions, the granting of such licences will be based on the payment of a fee to be determined by an ANCOM-initiated GD initiated by ANCOM, as for extending the validity period of such licences.

The monitoring fee calculation method has also been amended. It is now based on a formula and may not exceed 2% of the communication provider’s total turnover.

In addition, application of the 10% fine on turnover established by GEO no. 114/2018 and then suspended until 1 September 2019 by GEO no. 19/2019 has been further suspended until 15 March 2020.

The provisions of GEO no. 54/2019 entered into force on 4 July 2019.

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