EU Court Cracks $23 Million Whip at Portugal
(CN) - Portugal faces at least $23 million in fines for handing a private company the exclusive right to provide telecom services, Europe's highest court ruled Wednesday.
Portugal Telecom became the exclusive provider of the nation's public telecommunications service in 1995, but a new EU law passed in 2002 required member states to register any private companies providing universal services. The law sought to bring better objectivity, transparency, nondiscrimination and proportionality to such providers.
After the European Commission brought charges against Portugal for its failure to comply, the European Court of Justice ordered the Portuguese government to register the company and comply with EU law by 2011.
Claiming that Portugal still had not yet complied with the court's judgment by 2013, the commission sued again. Though Portugal had opened up the bidding process to other companies in 2012, regulators called this an empty action since its contract with Portugal Telecom runs through 2025.
The Luxembourg-based court found Portugal once again on the wrong side of EU law Wednesday. The ruling, which is not available in English, chastises Portugal for dragging its feet to conform to both the universal services directive and the court's earlier judgment.
Noting that foot-dragging prejudices other potential telecom providers and ratepayers alike, the court ordered Portugal to pay a lump-sum fine of just over $4 million.
Additionally, the Portuguese government faces a penalty of almost $14,000 for every day it has broken EU law since the 2010 judgment, a sum approaching $19 million.
Perhaps anticipating this decision, Portuguese lawmakers adopted changes that took effect on June 1 to bring its legislation in line with EU requirements.
Portugal's communications authority also opened up bidding and awarded a contract to another telecom company, Nos Comunicacoes, to provide service in areas that will no longer be served by Portugal Telecom. That contract also went into effect earlier this month.