INTERNATIONAL TELECOMMUNICATION UNION
Document C03/28-E
21 April 2003
Original: English
COUNCIL
GENEVA —
2003 SESSION — (5 – 16 MAY)
STANDING COMMITTEE - FI
Note by the Secretary-General
1
Subject:
REPORT BY THE COUNCIL AD HOC GROUP ON COST RECOVERY FOR
SATELLITE NETWORK FILINGS.
2 Purpose
This reports contains the findings and conclusions of the Council ad hoc
Group on Cost Recovery for Satellite Network Filings.
3 Background
Resolution 88 (Rev. Marrakesh, 2002) provided the basis to establish this ad
hoc Group. The Resolution also included an instruction that the Group, interalia, extend the implementation of cost recovery for the processing of space
notices to several directly linked activities undertaken by the
Radiocommunication Bureau but not already covered by cost recovery. By its
Decisions 5 and 6, the Marrakesh Plenipotentiary Conference has taken into
consideration the above-mentioned additions when establishing the 2004-2007
financial plan, in setting an anticipated cost recovery income for the 4 years
period of CHF 30 millions for this activity. The limit set on the amount of the
contributory unit of CHF 315 000 for the forthcoming financial period was
based on the assumptions described in annexes to Decision 6, setting the cost
recovery income for the processing of space notices at CHF 30 millions.
Ref. doc.
Res. 88
(Rev.PP-02)
Dec. 6
(COM6/2)
(PP-02)
Dec. 5
(Rev.PP-02)
4 Recommendation
In considering the Annexed Report, Council is invited to note that the
recommendations and proposed revised Decision 482 included in this report
do not comply with the abovementioned Resolutions and Decisions of the
Plenipotentiary Conference. Alternative mechanisms to set the schedule of
charges, as well as the inclusion of the additional costs used to establish the
financial plan income estimates and limits, should be considered so as to
guarantee the sources of funding in the forthcoming 2004-2005 budget. The
financial implications for 2004-2005 arising from the proposed Decision 482
(mod) included in this document are indicated below.
5 Implications
Should the proposed Decision 482 (mod) as contained in this report be
implemented, there would be a CHF 2.7 million shortfall of cost recovery
income for the processing of space notices for the 2004-2005 period. In this
regard, other sources of funding would have to be found to cover this
anticipated shortfall.
Yoshio UTSUMI
Secretary-General
-2C03/28-E
Report from the ad-hoc Group on
Cost Recovery For Satellite Network Filings
1
Introduction
1.1
Council-02 established the ad-hoc Group on cost recovery on Satellite Network Filings, in
Council Decision 510, to consider the alternative basis for charging that does not depend on
numbers of pages and to determine the factors to be considered for the evaluation, as well as the
practical implications of applying cost attribution to activities associated with the processing of
satellite network filings towards the application of full cost recovery. The Group was tasked to
report on progress, and make recommendations as appropriate, to the ad hoc Group of Council on
the financial plan and to the special session of Council to be convened just prior to PP-02. The
special session of Council endorsed the recommendations of the ad-hoc Group but implementation
was put in abeyance until after the Plenipotentiary Conference.
1.2
PP-02 revised Resolution 88 (Minneapolis, 1998) on the “implementation of processing
charges for satellite network filings and administrative procedures" and instructed the Council, at its
extraordinary session during the conference to establish a group in order to make recommendations
to the 2003 session of the Council on:
i)
modifications to Decision 482 to give effect to resolves 1 and 2 of Resolution 88 (Rev.
Marrakesh, 2002);
ii)
extension of the implementation of processing charges for satellite filings, received by BR
as of a date to be set by the Council and not already covered in resolves 2 of Resolution 88
(Rev. Marrakesh, 2002), to include identifiable and auditable costs incurred directly in the
processing of satellite network filings;
iii)
clarification of the meaning of the term "actual costs" referred to in resolves 4 i) of
Resolution 91 (Minneapolis, 1998) of the Plenipotentiary Conference;
1.3
Since PP-02, the ad-hoc Group has held two meetings (20-21 January and 10-11 April
2003) some 22 participants from 8 Member States and 6 Sector Members of the
Radiocommunication Sector participated in its work in the first meeting; and, some 19 participants
from 10 Member States and 5 Sector Members of the Radiocommunication Sector participated in its
work in the second meeting.
1.4
Pursuant to its terms of reference, the ad-hoc Group has reached the conclusions including:
the requirement for time recording; modifications to Decision 482 application; the extension of the
implementation of cost recovery; the use of the unit methodology.
2
Recommendations
2.1
Satellite network cost recovery process
Due to the overall complexity of satellite network cost recovery and the absence of any detailed
information describing the process, it is recommended that a document be developed, by the ad-hoc
Group, detailing the satellite network cost recovery process that could be of assistance to members
in understanding the process and the ITU in preparing modifications to Decision 482 and/or its
charging schedule (see § 3.2).
2.2
Decision 482 cost methodology
The Radiocommunication Bureau proposed that the satellite network processing costs should be
based on prospective estimates rather than the use of retrospective costs as defined in Decision 482.
-3C03/28-E
In addition, it was proposed that the schedule of charges be based on the prospective number of
networks received. Hence, it is recommended that:
1.
Council retain the basis of the fee schedule on the retrospective costs and that the cost basis
for the schedule of cost recovery fees be the " identifiable and auditable" costs (see § 4.1.1);
and,
2.
the schedule of charges be based on the number of networks expected to be processed (see
§ 4.1.2).
2.3
Direct/Indirect costs
The external auditor considers that direct cost should be identified for work on processing satellite
network filings but this has not be done for reasons that appear to relate to the ITU’s definition of
“direct costs and it is recommended that Council:
1.
develop new definitions for the terms “direct costs” and “indirect costs”; and,
2.
establish the means within the Union’s cost accounting system which permits the recording
of the Union staff members’ costs associated with each of the respective activities
performed by given staff members (see § 4.2).
2.4
Re-allocated costs
There has been some confusion over which General Secretariat re-allocated costs are justified for
inclusion in the overall costs associated with processing satellite network filings and it is
recommended that, in a revised fee schedule to Decision 482 (see § 4.3), the reallocated costs of:
1.
Personnel and Social Welfare Department, the Finance Department (including the payroll
section), the Information services Department and the Common Services Department be
retained; and,
2.
the Secretary-General’s Office, the Strategy and External Affairs Unit and the Conference
Department are excluded.
2.5
Shortfall in income
Due to concerns on the potential impact on the finances of the Union arising from a shortfall in cost
recovery income in a budget period, it is recommended that Council:
1.
review the Union’s financial arrangements, in particular the size of the reserve fund and the
roll-over into another budget period the debt, or surplus income, arising from the processing
of satellite network filings (see § 4.5.1); and,
2.
instruct the Secretary General to share any shortfall in satellite network cost recovery
income between the Radiocommunication Bureau and General Secretariat, based on the
ratio between the Bureau costs and General Secretariat re-allocated costs (see § 4.5.2).
2.6
Time recording
The method used by the ITU for apportioning staff time to activities has been considered
completely inadequate and the results open to interpretation. Hence, it is recommended that time
recording should be implemented in the Radiocommunication Bureau and the General Secretariat,
with application to the Space Services Department and the staff in the Informatics, Administration
and Publications Department, dealing with space software development and publications as a first
priority (see § 4.6).
-4C03/28-E
2.7
2001 time survey
The current fee schedule in Decision 482 (rev. Council-02) has the excess charge based on the 2001
time survey but the flat fee charge is based on an earlier time survey. Hence, it is recommended that
the 2001 time survey be included in the flat fee charge (see § 4.7).
2.8
Decision 482 charging methodology
The unit charging methodology is producing invoiced charges that average three times the flat fee
charge and this is not necessarily apparent from the charging schedule.
Further, the
Radiocommunication Bureau has indicated that the use of new software warrants the charging
category weighting factors and the definition of the “unit”, being revised. Hence, it is recommended
that:
1.
the entire charging methodology be reviewed including the weighting factors between
categories, the definition of the unit and the entire schedule of charges (see § 5.1.1);
2.
charging Category 5 be merged with charging Category 2 (see § 5.1.1);
3.
until the review is completed, there should be no additions to the structure of the fee
schedule (see § 5.1.1);
4.
Decision 482 revert to the original statistical limitations on the methodology, i.e., 35 % of
the networks processed are covered by the flat fee and the excess charge is based on 80% of
the average charge (see § 5.1.3); and,
5.
the Bureau should not inflate the charges for networks subject to cost recovery in order to
recover the cost of the free entitlement (see § 5.2).
2.9
Extension of cost recovery
Due to concerns on the operation of the cost allocation process and the charging methodology as
well as the absence of a methodology to determine the charges for activities not currently included
in the Decision 482 charging schedule, it is recommended that the extension of cost recovery to
work on activities associated with the processing of satellite network filings, not currently
incorporated in the cost recovery process, should be incorporated into the charging schedule from
July 2004, but contingent on:
1.
a proper implementation of time recording in the General Secretariat and the
Radiocommunication Bureau;
2.
the costs on which the revised schedule is based are identifiable and auditable;
3.
development of a charging methodology and schedule for those activities that will be
directly invoiced, complete with examples of implementation;
4.
revision of the unit methodology;
5.
fees proportionate to the level of work; and,
6.
one free filing per Member State (for notification) (see § 5.2).
2.10
Application of Decision 482
Following, recommendations from the external auditor on the treatment of unpaid invoices,
Resolution 88 (Rev. Marrakesh, 2002), and concerns from Member States and the
Radiocommunication Bureau on the application of Decision 482, it is recommended that:
1.
there should be no charge for a complete cancellation of a filing prior to its publication,
except for the forfeit of the flat fee when the filing is subject to upfront payment (see § 6);
-5C03/28-E
2.
in the case where multiple coordination requests are based on a single API originally
submitted prior to the 7th November 1998, charges should be applied for other than the first
coordination request of that network (see § 6.1);
3.
the number of units, required for the application of charges to modification of networks
originally submitted prior to the 7th November 1998 should be reduced (see § 6.1);
4.
nomination of the free entitlement shall be made by the end of the calendar year of
reception (see § 6.1);
5.
in the case of cancellation for non payment the corresponding invoice is deemed
uncollectable - this recommendation may require review of the financial regulations (see §
6.1);
6.
to assist members cancel a satellite network filing before the Radiocommunication Bureau
start the examination of the filing, the Bureau establish a webpage showing the waiting time
before examination (see § 6.1); and,
7.
the total charge for a filing involving multiple categories of charge should take into
account the various categories applicable to the assignments of that filing (see § 6.2).
3
Background
3.1
Decision 482 and report to special session of Council-02
The original charging methodology used in Decision 482 on the “implementation of cost recovery
for satellite network filings” was based on the number of published pages in a special section of the
Weekly Information Circular. However, the implementation of Resolution 30 (WRC-97) required
the Radiocommunication Bureau to move to electronic publication of information on a CD-ROM
thus requiring a change to the Decision 482 charging methodology.
Council-02 considered a new charging methodology based on the product of specific components of
a satellite network filing notice (e.g. number of frequency assignments, number of classes of station,
number of emissions). Due to concerns over the projected charges applicable under the new
methodology, Council-02 only adopted it on a provisional basis until the special session of Council
convened prior to PP-02 and as noted in the introduction, established an ad-hoc Group to evaluate
the methodology. The report of the ad-hoc Group (Document C02/99) contained a number of
recommendations including

extending the provisional adoption of the new charging methodology until Council-03; and,

incorporating the 2001 time survey into the Decision 482 charging schedule.
All the recommendations were endorsed by Council (see Annex 1 for the full text of the
recommendations to the special session of Council).
3.2
Work of the ad-hoc Group since PP-02
In the work of the ad-hoc Group since PP-02, there has been the opportunity to review information
previously provided to both Council and the July 2002 meeting of the ad-hoc Group, as well as
proposals for the further revision of Decision 482 (Council-02). During this review, it has been
noticed that some information, previously provided by the Radiocommunication Bureau, has been
inaccurate, requiring a further review of the recommendations previously made by the ad-hoc
Group to Council-02 as well as advice provided to the ad-hoc Group preparing the draft Financial
Plan.
Resolution 88 (Rev. Marrakesh, 2002) and Decision 482 provide the framework for the operation of
the satellite network filing cost recovery process but do not provide detailed guidance. In addition,
Resolution 91 (Minneapolis, 1998) is supported by a cost allocation process first presented to
-6C03/28-E
Council in 1998 and modified at subsequent Council meetings but a consolidated revised document
detailing the process has not been made available to Council. As noted by the external auditor, in
the audit reports on cost recovery for satellite network filings in 2001 (Document C01/54) and 2002
(Document C02/102), the documentation of the process is insufficient.
The absence of detailed documentation has a number of consequences. The satellite overall network
cost recovery process is excessively complicated, small changes can have unintended implications
and there is a tendency to the use of terminology that is inaccurate and misleading (e.g., full cost
recovery – it is not the intention of Decision 482 to implement full cost recovery). Hence, it can be
difficult for new participants to understand changes to the satellite cost recovery process and thus
fully participate in meetings where it is reviewed. Therefore it is recommended that a document be
developed, by the ad-hoc Group, detailing the satellite network cost recovery process that could be
of assistance to members in understanding the process and the ITU in preparing modifications to the
application of Decision 482 and/or its charging schedule.
4
4.1
The attribution of costs for activities associated with processing satellite
network filings
Cost assessment methodology
The current cost methodology in Annex B of Decision 482 (Council-02), is based on an estimation
of the costs over the preceding three year period as well as the average numbers of filings received
in the same period whereas the budget receipts are estimated on the prospective number of satellite
network filings processed in the forthcoming two years. In case of fluctuations in the number of
filings processed, Resolution 91 (Minneapolis, 1998) resolves 4 iii) provides for a means of
adjusting the charge for the product or service based on actual costs or actual income. To date, this
has been achieved by reviewing the fee schedule at least once every two years, as mandated by
Decision 482. However, in cases of large fluctuations in the number of satellite network filings
processed it would be possible, under the current cost methodology, to either issue additional
invoices if the number of satellite network filings processed are less than expected during a certain
period or issuing refunds if the number of satellite network filings processed are more than
expected. It is recognised by both the Bureau and the Group that the application of any
supplementary charges would be extremely unpopular and therefore potentially counter productive.
4.1.1 The use of projected estimates vs. audited costs in establishing a schedule of fees
In Document 1, of the April 2003 meeting of the ad-hoc Group, the Bureau proposed a new process
for establishing a schedule of cost recovery fees for satellite network filings required to be
submitted in compliance with the Radio Regulations. The Bureau proposed that the future schedule
of fees be based on the projected costs included in the 2004-2005 budget rather than continue to use
the External Auditor's reports of the last three years' audited costs as the basis for future fees
schedules. The ad-hoc Group is of the view that the implementation of this proposal from the
Bureau is not consistent with the principle presented in Resolution 88 (Marrakesh, 2002) that the
cost basis for the schedule of cost recovery fees be the "identifiable and auditable" costs. Budgeted
costs are by their very nature not auditable, and are at most only "good faith estimates".
Council in Decision 482 has established a well-defined process for reviewing and revising the
schedule of the cost recovery fees for satellite network filings. This process provides for Council
periodically reviewing the financial and management audit reports, submitted to each annual
Council meeting over the previous three years by the ITU External Auditor, of the processing costs
incurred by the ITU in the selected cost categories identified in Annex B of Decision 482, and the
charges collected.
-7C03/28-E
4.1.2 Prospective networks processed vs. retrospective networks received in establishing a
schedule of fees
As noted in § 4.1 the charges to be applied to networks are based on the number of networks
received in the preceding three-year period. Also as noted, there may be considerable fluctuations in
the numbers received e.g., for coordination requests, there were 773 received in 1998 but only 208
received in 2002. Hence, not only is the use of the number of networks received unreliable in
determining the fee schedule but, also they bear no relation to the number of networks processed
e.g., for coordination requests there were 328 published in 2000 but 728 published in 2002. Basing
the fee schedule on the number received may therefore lead to the fees being set too low or too high
for the numbers expected to be processed; resulting in the ITU not recovering the expected income
or exceeding the expected income.
If, instead of basing the schedule of charges on the number of networks received, it is actually based
on the number of networks expected to be processed then, the charges applicable to individual
networks will be more proportionate to the costs to be recovered in the period. This approach will
also enable the number of networks in the backlog to be taken into consideration (e.g., 680
coordination requests at the end of February 2003). It may also be appropriate to consider revising
the fee schedule on a yearly basis in order to take the sometimes large variations in the number of
networks received each year into consideration. As the ad-hoc Group is proposing the revision of
the charging schedule in 2004 (see § 5.2) it is further proposed the concept of a yearly review of the
fee schedule be considered at Council-04.
4.2
Direct Costs and Indirect Costs
Because of the definitions applied to the terms “Direct costs” and “Indirect costs” within the
financial management structure of the Union, their has led to considerable confusion in financial,
management, and audit reports associated with the implementation of cost recovery for satellite
network filings under Resolution 88 (Marrakesh, 2002). As currently defined in current budget
documents the staff costs of a given individual staff member are accounted as "direct costs" to a
given activity only if that staff member performs just that one activity; otherwise the staff costs of
that staff member are considered to be "indirect costs". This confusion has been noted by the
External Auditor in both his 2001 and 2002 reports to Council. Based on the information available,
this ad-hoc working Group is of the view that two actions need to be pursued toward resolving the
confusion involving the use of these terms:
i) develop new definitions for these terms; and,
ii) establish the means within the Union's cost accounting system which permits the recording of the
Union staff members' costs associated with each of the respective activities performed by given
staff members.
4.3
General Secretariat re-allocated costs
At Council-02, the re-allocated costs associated with the Secretary-General’s Office, Strategy and
External Affairs Unit, Conference Department and the Common Services Department were
included in the excess fee charges for satellite networks but were not included in the flat fee charge.
At the July 2002 meeting of the ad-hoc Group, the Radiocommunication Bureau presented a
document that indicated none of the above re-allocated costs were included in the fee schedule
adopted by Council-02 and requested that they be included. The ad-hoc Group noted that these
General Secretariat re-allocated costs had been specifically excluded when Decision 482 was
originally adopted by Council-1999 and, following considerable debate, the decision to exclude
them was reaffirmed. Expenditure estimates submitted to the ad-hoc Group on the Financial Plan
were based on the understanding that these costs were excluded, and these expenditure estimates
were also submitted to the special session of Council-02.
-8C03/28-E
At the April-03 meeting of the ad-hoc Group, when it was recognised that the re-allocated costs for
the General Secretariat are currently included in the excess fee charges, the need for their inclusion
was again reviewed. Despite considerable doubts about the operation of the ITU’s cost allocation
methodology (see § 4.6) and the level of costs it generates, the ad-hoc Group decided to recommend
that the reallocated costs of the Common Services Department and the payroll section of Finance
Department be retained in a revised fee schedule to be submitted to Council-03. The other units of
the General Secretariat (Secretary-General’s Office, Strategy and External Affairs Unit and
Conference Department) are to be excluded; in particular, they are to be excluded from the current
excess charge schedule. A detailed listing of the General Secretariat reallocated costs and the
associated units is included in Annex 6.
4.4
Actual costs
As noted in the introduction (see 1.2 iii) one of the tasks of the Group is to clarify the meaning of
the term "actual costs" as referenced in resolves 4 i) of Resolution 91 (Minneapolis, 1998) which
requires that Council implement cost recovery in a way which “ensures that no more than the actual
costs of providing products and services are recovered.” There are two divergent views on the
meaning of the term “actual costs”. The first view, currently implemented in Decision 482, is that
the actual costs are those of the Space Services Department together with the associated reallocated
costs. This view is supported by the Radiocommunication Bureau and some administrations. Other
administrations are of the view that the “actual costs” are the direct and reallocated costs associated
with processing individual satellite network filings. Further work is needed on this issue.
4.5
Recovery of costs (Income)
The Radiocommunication Bureau uses the term under-recovery to explain the difference between
its costs and the income generated by processing satellite network filings. The use of the term in this
way is a distortion of the process, as, for instance, Decision 482 permits one free network filing
each year for all Member States. In providing for a free filing, Decision 482 recognises that the
filing of satellite networks is neither a product or service, where Member States can decide whether
to use them, but a core activity of the Union: specified in Article 1 of the Constitution and for
Member States, an activity that is a mandatory requirement under the Constitution, Convention and
the associated Administrative Regulations. Hence, the cost of processing satellite networks cannot
be fully recovered by the application of cost recovery charges, as the costs associated with these
free networks are paid from the contributory unit. In these circumstances, any attempt to recover the
costs of the free networks would equate to double charging of Member States. In addition, there is
the case of non-payment of satellite networks filing fees and the Group considered that it would be
inappropriate to increase the charge to Member States to compensate for non-payment of a satellite
network filing charge.
To persist with the term “under-recovery of costs” in relation to satellite network filings is therefore
misleading as the ITU is unlikely to ever be in a position where it could recover the full costs of
processing satellite networks. A more realistic measure would be difference between expected and
realised income (or alternatively the shortfall in income).
4.5.1 Instability in the Union’s finances
The ad-hoc Group noted that extension of cost recovery to other activities associated with the
processing of satellite notices and the inclusion of additional General Secretariat re-allocated costs
could make the ITU’s finances overly dependent on an activity where there can be considerable
fluctuations in income between two biennial budgets. Over-use of cost recovery and the
inappropriate inclusion of re-allocated costs, may potentially destabilise the finances of the Union.
It is noted that there could be similar issues with other cost recovery activities. The ad-hoc Group
therefore recommend that Council consider a review of the Unions financial arrangements, in
-9C03/28-E
particular the size of the reserve fund and the roll over of debt or surplus income, arising from the
processing of satellite network filings.
4.5.2 Consequences of a failure to recover expected income
The ad-hoc Group considered the likelihood of the Radiocommunication Bureau failing to meet its
income targets for cost recovery of satellite networks filings (CHF 30m in the 2004-07 Financial
Plan) and noted that, any shortfall should be absorbed in principle by the relevant appropriations for
those activities provided in the Budget of the relevant Sectors (as per §6 of Article 10 of the
Financial Regulations). While Decision 6 (Marrakesh, 2002) requires there should be no
expenditure reductions that would affect cost-recovery income, it is not clear how any income
shortfall would be shared between the Radiocommunication Bureau and the General Secretariat.
The WRC in 2003 will place new work requirements on the Radiocommunication Bureau that will
be additional to those of the forthcoming RRC and a reduction of staff in the Bureau may impact
activities relating to both conferences. Hence, the ad-hoc Group recommends that Council instruct
the Secretary General to share any shortfall in satellite network cost recovery income between the
Bureau and General Secretariat, based on the ratio between the Bureau costs and General
Secretariat re-allocated costs.
4.6
Time survey and time recording
The ad-hoc Group’s report to the special session of Council contained a number of criticisms of the
time survey1 conducted by the ITU that was used to apportion staff time to activities. From the
perspective of the Radiocommunication Bureau, this survey is used to determine the overall cost of
processing notices over a period of three years preceding the Council meeting at which fee revisions
are to be considered, as required by Decision 482. However, the time survey does not provide
continuous monitoring and as no one in the ITU is required to complete a timesheet, it is not
possible to determine the level of activity and thus the costs within individual categories. In
addition, members have expressed considerable doubts about the extent that activities within the
General Secretariat are related to the processing of satellite networks in the Radiocommunication
Bureau and the associated charges for cost recovery activities.
At the January 2003 meeting, the ad-hoc Group unanimously reaffirmed its previous concerns on
the time survey and considered that a more detailed time survey was required and after further
consideration at the April 2003 meeting, the ad-hoc Group decided that it would be more
appropriate to implement permanent time recording. The aim of the time recording is to identify,
among all the activities performed by the Radiocommunication Bureau and the General Secretariat,
the percentage time spent on of those activities currently subject to cost recovery and to evaluate the
percentage of time spent on each activity performed by the Radiocommunication Bureau and the
General Secretariat, that is not subject to cost recovery. This approach not only provides
information on existing cost recovery activities but also would provide the Radiocommunication
Bureau and Council, with the relevant information on the inclusion of new activities within the cost
recovery framework should the application of cost recovery be extended, as well as data for the
development of Key Performance Indicators to be included in Operational Plans.
The Group agreed that the time recording should apply to all staff in the Radiocommunication
Bureau and the General Secretariat, with application, as a first priority, to the Space Services
Department and the staff in the Informatics, Administration and Publications Department, dealing
with space software development and publications. Time recording should be implemented in such
a way that the details of activities are recorded on a daily basis. It was considered that time
recording, as proposed by the ad-hoc Group, would also be suitable for application to other areas of
____________________
1
The time survey covered a period of 21 months and required ITU staff to identify, on the last day of the survey, the
percentage of their time devoted to cost recovery activities during the entire preceding 21-month survey period.
- 10 C03/28-E
the ITU should Council wish to extend its application. A list of activities to be included in time
recording was identified and the methodology for recording and collating the data agreed. The
details of the time recording proposals are presented in Annex 3. The Group were of the opinion
that the time survey should be implemented as soon as possible, using if possible existing software
e.g. the SAP software. A draft decision for implementing time recording is provided in Annex 2.
4.7
2001 time survey
In July the ad-hoc Group recommended to the special session of Council, on the basis of
information from the Radiocommunication Bureau, that the fee schedule be modified to incorporate
the 2001 time survey. At its April 2003 meeting, the Group discovered that the 2001 time survey
had, in fact, already been included in the excess charge and was only missing from the flat fee. A
new time survey has also been completed in February 2003, based on the Radiocommunication
Bureau’s views on the extension of cost recovery. However, as the ad-hoc Group is not
recommending the extension of cost recovery at Council-03, the 2003 time survey does not need to
be implemented but the 2001 time survey will still need to be included in the flat fee charge.
5
Cost recovery methodology options
5.1
Charging (unit) methodology
The unit charging methodology determines the size and relative complexity of a filing but this does
not necessarily indicate the time taken to process the notice. The Radiocommunication Bureau
informed the Group that work on filings can be divided into three phases, preparation of the filing,
examination of the filing and finally publication. Now that publication is in electronic form, the
time associated with that activity is generally similar across a category of filings. The unit method
of determining the size of the filing and its complexity is representative of the work in preparing the
filing but is not necessarily relevant for the examination, which is more related to the applicable
regulatory provisions. The provisions applied to a filing are identified by the charging categories
with the difference between the categories indicated by a series of weighting factors representing
the relative time/effort for the examination of a network in that category.
5.1.1 Analysis of invoiced charges
The Radiocommunication Bureau provided the July 2002 meeting of the Group with a series of
examples showing the potential charges, arising for the same networks, under both the page based
system and the unit method. The charges for the unit method could reach 500,000CHF and while
the Bureau had tried to align the charges between the two methods, there could still be significant
variations e.g., in charging Category 2 the fee for one network was shown as 37,160CHF in the
page-based method and 102,241CHF in the unit method; whereas for another network, the fee was
shown as 62,120CHF in the page-based method and 5,600CHF in the unit method.
At the April 2003 meeting of the Group, the availability of invoiced charges allowed their
comparison with the examples previously provided by the Radiocommunication Bureau. The results
of this comparison tend to indicate the unit method is not performing as indicated in the examples.
In charging Category 2, the highest invoiced fee is 1.5 times the maximum indicated in the example
calculations; and in charging category 4, the highest invoiced fee exceeds the maximum value
indicated in the example calculations by more than 5 times. However, of greater concern is the
recognition that the average fee for the categories reviewed (Categories 2, 3 and 4) is close to, or in
excess of, three times the flat fee value (e.g., category 2 – flat fee 5,600CHF, average fee approx.
18,500CHF; category 3 - flat fee 21,000CHF, average fee approx. 57,000 CHF) indicating the entire
charging mechanism is severely distorted. Further, while a comparison of the networks processed
indicates a variation of 15:1 in the time for processing a network, the invoiced charges show a
maximum variation of 40:1 in price, with a possible charging rate of 1,400CHF per hour
- 11 C03/28-E
The Bureau admitted the extremely high charges did not necessarily reflect the work involved in
processing the filing, as beyond a certain size of filing there was no real increase in processing
costs. Discussions with the Bureau indicated that changes in the way networks are processed and
the introduction of new software, require revision of the weighting factors used to distinguish the
effort used for each charging category. In addition, it was noted that within the space of a year new
software has made the definition of a unit obsolete. Despite the excessive charges, the ad-hoc Group
recommend that the unit method be retained until Council-04 and the entire charging methodology
reviewed, including the weighting factors between categories, the definition of the unit and the
structure of the schedule of charges (the separation between Categories).
In the interim it is proposed that based on the similarity between charging Categories 2 and 5 and
that the fees for Category 5 are larger than Category 2, the two Categories should be merged.
Further until the review is completed there should be no additions to the structure of the fee
schedule.
5.1.2 Excess charges
Following concerns expressed on the application of the unit methodology at the ad-hoc Group’s
January 2003 meeting, and the potential to generate excess charges for a small number of filings,
the Bureau provided information on the application of a cap to the processing charges in each
category. The cap could be based on page numbers within each category in publications made in the
last three years. However, the Bureau noted that application of a cap might result in an “underrecovery of costs”. An alternative methodology could be to apply a flat fee. The ad-hoc Group also
noted, that for those networks submitted before Council-02, satellite operators do not have the
opportunity to reduce the size of the filing. Further, that under the unit methodology, satellite
operators are penalised for being precise in providing information on their proposed networks.
In the debate that followed, a variety of views were expressed but no real consensus emerged,
although a number of participants expressed the view the charges being produced were
disproportionate to the costs and the salaries of the staff. Some participants objected to a flat fee, as
it did not take into consideration the size of a filing and would therefore require more categories: a
point made at the July 2002 and January 2003 meetings of the Group. Some participants favoured a
cap, although one administration objected to this approach based on the same objections raised on
the flat fee and that it will encourage the submission of even larger filings, so they proposed as an
alternative option a reduced rate above a certain number of units.
5.1.3 Percentage of networks covered by the flat fee
As noted in § 5.1.1, for certain categories the average charge per filing is in the order of three times
the flat fee. The increase in the average charge has occurred due to the suppression, at Council-02,
of the requirement that the flat fee cover 35% of networks published. Currently the number of
networks covered by the flat fee is related to a variable proportion of the total costs and this
obscures the extent of the charges. The change also makes it easier to reduce the number of units
covered by the flat fee and thus make it more difficult to identify the impact of any revision in the
charging schedule. The ad-hoc Group therefore recommend that Decision 482 should revert to the
original limitation on the methodology, in that 35% of the networks processed should be covered by
the flat fee and the excess charge be based on 80% of the average charge.
5.2
Extending cost recovery to new activities
In the report to the special session of Council-02, the ad-hoc Group recommended that cost
recovery be extended to a new range of activities that, if they were to be implemented, required PP02 to revise Resolution 88. However, due to concerns on the lack of available details on the
reallocation of costs and the uncertainty with the charging methodology, many participants had
considered that charges related to this extension of cost recovery should not be implemented until
these issues had been resolved. At PP-02, a decision was taken to extend the scope of cost recovery
- 12 C03/28-E
and consequently, this will require consideration at Council-03. It is noted that the concerns
expressed by the ad-hoc Group in its report to the special session of Council-02 have still not been
resolved.
The Bureau noted, in Document 2003/6 (January 2006) to this ad-hoc Group, “that the 2004-07
Financial Plan has been approved on the basis of full cost recovery” and therefore there was a need
to extend the activities subject to cost recovery. The ad-hoc Group do not agree with this view; PP02’s adoption of the Financial Plan was not based on moving to full cost recovery for satellite
network filing but an extension of cost recovery to some other activities, as noted in the report of
the ad-hoc Group on the Financial Plan to the special session of Council (see Document C02/98). In
addition, the provision of a free filing for all Member States and the cancellation of networks for
non-payment prevent full cost recovery. The ad-hoc Group agreed that the Bureau should not inflate
the charges for networks subject to cost recovery in order to recover the cost of the free entitlement,
or the cancellation of networks (see § 4.5). It was noted that, in a Bureau input document, the
projected costs for the 2004-05 biennium (approximately CHF 31m) on which the Bureau proposed
to base their charges exceeded the total expected income in the 2004-07 Financial Plan of CHF
30m. However, the ad-hoc Group also noted that the estimated costs and the projected income are
based on two different concepts, making it difficult to link costs with income and difficult to
achieve consistency, as noted in recommendations 8 and 11 of the external auditors report (see also
§ 5.1).
The ad-hoc Group agreed that the current application of the unit methodology was too
unsatisfactory to contemplate extending cost recovery at Council-03. The Group therefore
recommends that extension of cost recovery to work on activities associated with the processing of
satellite network filings, and not currently incorporated in the cost recovery process, should now be
incorporated into the charging schedule from July 2004, but contingent on:
•
proper implementation of time recording in the General Secretariat and the
Radiocommunication Bureau;
•
the costs are identifiable and auditable;
•
development of a charging methodology and schedule for those activities that will be
directly invoiced;
•
revision of the methodology;
•
fees proportionate to the level of work on a filing; and,
•
one free filing per Member State (for notification).
A list of additional activities for inclusion in the cost recovery process is contained in Annex 4. It is
noted that the potential inclusion of notification will create an issue with regard to the application of
non-payment and that this should be addressed by WRC-03.
6
Application of Decision 482 (modified C2002)
The external auditor’s report to Council (document C02/102 and its addendum) identified issues
relating to the principle of one free publication per year and per Member State (see §§21, 51, 83, 84,
Recommendations 16 and 17) and to the follow-up procedure/interest on arrears (see §§19, 26, 27,
Recommendation 3). In addition, the Bureau expressed concerns that the three times limit for
modifications to networks, originally received prior to the 7th November 1998, was too large now
that the “page methodology” was no longer used.
6.1
Cancellations of filings
Concerns were also expressed on the cancellation of all or part of a filing, at a point in time, after
the Bureau has started the examination of the network but prior to the publication date when the
invoice can be issued. In the case of a complete cancellation, the Bureau does not recover the costs
- 13 C03/28-E
of its work but has decided that there will be no charge. In the case of a partial cancellation, the
Bureau may have to re-examine other networks, with respect to the cancelled frequency
assignments, and therefore the Bureau have treated this case as a modification that will be processed
in the order of the date of receipt. For the case where partial cancellation of a network is submitted
prior to the Bureau starting the examination of the original coordination request, the Bureau will
levy no charge for the cancelled frequency assignments.
Discussions recognised there was a fundamental dilemma in addressing the issue of the lost of
income for the cancelled networks where work had commenced: on one side, the Bureau was not
achieving the recovery of its costs; but, to charge for the cancellation of a network would be to
penalise that administration for freeing up spectrum. Charging in these circumstances was therefore
not seen to be promoting efficient use of the radio spectrum and possibly contrary to the spirit of
Article 44 of the Constitution. The same view was taken with regard to charges incurred for
processing API’s that are not followed by a coordination request within the time period specified in
No. 9.5D of the Radio Regulations. The ad-hoc Group therefore agreed that there should be no
charge for a complete cancellation of a filing, except for the retention of the flat fee, in the case of
filings to which upfront payment applies (filings submitted after 1 January 2002). To assist member
identify when their networks are to be processed and thus cancel the networks before the Bureau
incurs extra costs, the ad-hoc Group also recommends that the Bureau establish a webpage showing
the waiting time before examination.
Further discussions considered the changes arising from the PP-02’s revision of Resolution 88 and a
series of amendments were agreed to Decision 482 (see Annex 5) although one administration
reserved its position with regard to the modifications to decides 7. In addition, it was agreed that
text would be included in this report relating to the charges incurred for cancelling all or part of a
satellite network filing.
Administrations may cancel (withdraw) satellite network filings awaiting or under processing
by the Bureau. In the case of satellite networks for which a notice has been received prior to 1
January 2002, if the cancellation is received before the date of publication, no charges shall
apply. In the case of satellite networks for which a notice is received on or after 1 January
2002, subsequent cancellation will not remove the obligation to pay the flat fee component
(payable following receipt of the notice) however, no charges will apply for the variable
component (if any) providing the cancellation is received before the date of the publication of
the related special section.
In the case of requests to cancel specific beams or specific frequency assignments from a
filing (e.g., some Administrations have requested the deletion of some specific frequency
assignments from a filing for the reason that these frequencies are covered by No. 9.11A, so
as to change the category of the filing from 3 to 2, which has considerably lower charges) that
partial cancellation will be treated as a modification (MOD). Footnote 5 to decides 4 of
Decision 482 (modified 2002) will be applied to determine whether or not the modification
should be subject to a cost recovery charge. Regarding the scope of this footnote, the Group
also requested the Bureau to identify explicitly and publish an exhaustive list of those cases
for which modifications do not result in further examination by the Bureau.
6.2
Application of multiple provisions
Where a filing is covered by more than one category (e.g. a GSO network filing containing several
assignments, some of which are in bands where No. 9.11A applies and some others in bands where
No. 9.11A does not apply) the Bureau applies the practice described in its Circular Letter CR/179
dated 6 June 2002, which reads as follows:
“If a publication involves more than one category, then the applicable category with the highest
charges specified will be applied for that publication.”
- 14 C03/28-E
When checking some requests for coordination that have been published, it has been noticed that
the Bureau applies the category with the highest charges for both the flat fee and the additional
units. In addition, it is noted that this practice may contribute to the high charges achieved under
the unit method and the invoiced charges not seeming to follow the pattern in the examples
provided by the Bureau (see § 5.1.1) – apparently, all the examples were based on networks to
which a single provision is applicable. This practice, of processing all assignments under the highest
charge, appears to contradict the original intent of the schedule of processing charges in Decision
482 (Council-02) which is based on a cost by unit dependent on the category and may not properly
reflect the workload of the Bureau. As Decision 482 (Council-02) does not address the issue of
multi-category filings, the ad-hoc Group recommends that the total charge for a filing take into
account the various categories applicable to the assignments of that filing(see proposed
modification to Decision 482 in Annex 5).
- 15 C03/28-E
ANNEX 1
Recommendations From Report to the Special Session of Council-02
2.1
Decision 482 charging methodology
It is recommended that the application of Decision 482 (modified) methodology, as provisionally
adopted by Council-02, be extended to Council-03. However, due to concerns over the application
of this methodology and the effort required by all parties for its maintenance, the special session of
Council is also recommended to approve a Decision to enable the ad-hoc Group on Cost Recovery
to study:

the application of charges based on a calculation of “Units” as established in Decision 482
(modified) but with a prescribed maximum number of units for each category of filings; and,

an alternative methodology to result in an appropriate “flat fee” structure of cost recovery
charges in order to remove the complexity of calculation involved in the current scheme.
Annex 1 contains a draft Decision extending the provisional implementation of Decision 482
(modified) until the 2003 Session of Council and proposed new terms of reference for the ad-hoc
Group on Cost Recovery established at the 2002 Session of Council (Decision 510).
2.2
Time survey
It is recommended that the 2001 time survey be used as the basis for setting the Decision 482
(modified) charging schedule. Noting concerns of the ad-hoc Group on the way the 2001 time
survey was conducted, it is further recommended that a new time survey be conducted based on
recording time on a daily or, at most, weekly basis to be completed in time for the report to be
considered by the ad-hoc Group identified in § 2.1 above. In addition, future time surveys should be
made available to all members and should identify the participants.
2.3
Cost allocation
It is recommended that the ad-hoc Group review and provide recommendations, as appropriate, on
the cost attribution to activities associated with the processing of satellite network filings in
accordance with Resolution 88 (Minneapolis, 1998) or, any modification thereof arising from the
Plenipotentiary Conference, 2002. Consideration should also be given to clarifying the meaning of
the term “actual costs” in Resolution 91 (Minneapolis, 1998) as it relates to satellite network filings;
currently it is not clear if this term relates to the total costs of the ITU or the unit cost of providing
the service.
2.4
Extension of cost recovery
It is recommended that cost recovery be extended, in principle, to include other work associated
with processing satellite network filings and also other aspects of the Space Services Departments
activities, subject to clarification of the details of the reallocated costs. Inclusion of these new
activities will require modification of Resolution 88 (Minneapolis, 1998) at the Plenipotentiary
Conference. It is also recommended that the costs arising from theses activities should not be taken
into account by the ITU when setting the fee schedule until the issues noted in § 2.1, § 2.2 and § 2.3
are resolved.
- 16 C03/28-E
ANNEX 2
Draft Decision [XX]
Time recording process
The Council
considering
Resolution 91 of the Plenipotentiary Conference (Minneapolis, 1998), on cost recovery for some
products and services of ITU which, in particular, resolves that cost recovery should be
implemented by the Council in a way which allows for open and transparent accounting for costs
and receipts separate accounting process;
Resolution 88 (Rev. Marrakech, 2002), on processing charges for satellite network filings and
administrative procedures, which, in particular, established a group in order to make
recommendations to the 2003 session of the Council on, inter alia, extension of the implementation
of processing charges for satellite filings;
a) that the implementation of cost recovery process for a product or a service requires to
evaluate the time dedicated, over a given period, by the relevant entities of the ITU to the
activities related to this product or this service, so as to derive associated costs;
b) that the extension of cost recovery to new activities requires to evaluate the time dedicated
by the relevant entities of the ITU to those activities;
c) that cost recovery for satellite network filings, as currently implemented, involves
reallocation of costs associated to some entities of the General Secretariat, which would
therefore need to be evaluated;
d) the need to identify, within the ITU-R, auditable costs for activities subject to cost recovery
and also for those that may become subject to cost recovery;
e) the need to identify auditable costs for activities conducted in the General Secretariat;
f) the need to establish relevant performance indicators;
recognizing
that the implementation of a time recording process may need to be supported by specific
software tool and may therefore involve short-term and long-term costs;
noting
that existing software applications might be used or adapted to implement a time recording
process;
decides
1 that a time recording process shall be implemented in the General Secretariat and the
Radiocommunication Bureau; therefore any staff member of these units shall, on a daily
basis, record the different activities conducted over the day as well as the amount of time
dedicated to each of these activities;
2 the costs associated with the development and the maintenance of a software tool to be used
for the implementation of the time recording process mentioned in decides 1 shall be borne
by the General Secretariat and the Radiocommunication Bureau.
- 17 C03/28-E
instructs the Secretary-General
a)
to implement the time recording process mentioned in decides 1 by 31 December 2003;
b) to report to Council-04 on the implementation of this Decision.
- 18 C03/28-E
ANNEX 3
TIME RECORDING
The former time survey, the results of which were presented at the last meeting of the ad hoc group
on cost recovery for satellite network filings (July 2002), was criticized especially for the way it
was carried out. The ad hoc group therefore expressed its concern as to whether the results of the
survey could be deemed accurate and recommended that time recording should be conducted in a
more objective and efficient way.
The group was of the view that the implementation and the characteristics of time recording should
take account of the following expected goals:
1. to identify, among all the activities performed by the BR, the proportion of time spent on
those currently subject to cost recovery, so that the share of budget dedicated to cost
recovery activities in the ITU-R can be known and therefore recovered. Furthermore, it is
necessary to know the respective proportions of each category currently subject to cost
recovery so as to proportionate the price to the effective cost of the category.
2. to evaluate the relative shares of each one of the activities performed by the BR and not
subject to cost recovery. It is considered crucial that time recording should provide as much
detailed and relevant information as possible, especially regarding the activities not
currently subject to cost recovery but likely to be, since it is essential that all relevant figures
be available when some new activities are proposed or recommended to be subject to cost
recovery, in order to appreciate the impact of such extension.
3. to make all the costs (recovered or to be recovered) auditable.
Given these three main objectives, the group proposed that time recording should be carried out
according to the following characteristics:
-
Each day, each staff member would indicate all the activities carried out during the day
together with the time spent on each of these activities. The duration of time would be
expressed in hours and tenths of hour.
-
The possible activities would be chosen among a rather extended pre-defined set of
denominations. This set would include the processing of satellite network filings but without
a priori mention of whether the filing is subject to cost recovery, since only the analysis of
the results subsequent to the compilation of the data would take account of such aspect.
-
An appropriate software would be used to collect automatically the raw information
provided by the BR staff members and also to concatenate the data so as to show the global
time spent on each of the activities within each department. Such a software tool should be
available easily. Whether the SAP software, already available within the ITU, could be used
to collect the information relating to time recording would need to be examined.
-
Time recording needs to be implemented as a continuous reporting process, and not only as
a one-time operation conducted over a year, thus producing relevant KPI’s to be used by the
management.
List of activities relevant to the time recording:
-
processing of a satellite network filing, together with identification of the name of the filing:
o advance publication information for networks subject to coordination
o advance publication information for networks not subject to coordination
- 19 C03/28-E
o request for coordination (together with the reference to the coordination procedure ).
Note: in case a filing covers more than one coordination procedures, the breakdown
between all the procedures involved needs to be specified.
o requests for modification of the space service plans and Lists: Appendices 30/S30
(Parts A and B), 30A/S30A (Parts A and B) and 30B/S30B.
o notification (there might be a need to distinguish between several categories, as for
coordination requests)
o Resolution 49
o Checking for expiry of networks under No. 11.44.1
o Checking of networks under No. 9.5D/Resolution 51
o CR/D (including Resolution 46/D)
o invoicing relating to cost recovery process
o suppression of networks
o updates of the Master Register
o suspension of notices under No. 11.49
o management of dates of bringing into use
o extension of period of validity
o provisional recordings under No. 11.47
-
publication in the Space BR IFIC CD ROM
-
review of a BR finding or decision, in accordance with Article 14
-
service documents, in accordance with Article 20 (IFL)
-
activities related to software engineering, together with the name of the project:
o specification,
o development / updating
o validation
-
mandatory assistance to administrations required by the RR (e.g. No. 9.60)
-
general assistance to administrations (excludes the previous item)
-
preparation of Rules of Procedure
-
preparation and attendance at ITU and non-ITU meetings (together with the name of the
meeting)
-
management
-
preparation and publication of SNL
-
publications other than BR IFIC
-
training received by the BR staff
-
training provided by the BR staff to ITU staff
-
seminars and training provided by the BR staff to administrations
-
other activities (holidays, sick leave…)
- 20 C03/28-E
The group was of the view that priority should be given to a proper implementation of time
recording through an appropriate software tool, even if no results can be made available at the 2003
session of Council.
The group also agreed upon that time recording, as described in this Annex, should be conducted
initially within the SSD and IAP departments and that time recording should be implemented in the
General Secretariat so that reallocated costs can be evaluated.
The group eventually noted that conducting time recording may be connected to the general audit
performed in the ITU by the Group of Specialists established by PP-02 Decision 7.
PRINCIPLES FOR
THE IMPLEMENTATION & THE EXPLOITATION
OF THE TIME RECORDING
This section intends to present how time recording data could be simply implemented and
appropriately exploited to derive the costs associated to each surveyed activity, which are
needed to establish a new schedule of cost recovery fees.
It has to be pointed out that time recording should be implemented as a continuous reporting
process, and not only as a one-time operation conducted over a year, so as to produce relevant
performance indicators as well as provide appropriate elements to elaborate and adjust the cost
recovery framework, including the fee schedule and the activities subject to cost recovery.
1. Production of time recording data
Each staff member involved in one or several surveyed activities is expected to provide each
day a summary of his/her activities following the example pattern below:
Day
Staff member
Activity
Details
Time spent
yy/mm/dd
XXX
No. 9.7
X-SAT
1 hour
yy/mm/dd
XXX
No. 9.13
X-SAT
2 hours
yy/mm/dd
XXX
No. 9.60
N/A
1 hour
yy/mm/dd
XXX
Meeting
SAT-BAG
2 hours
yy/mm/dd
XXX
Preparation of Rules of procedure
11.yy
2 hours
It can be pointed out that such a pattern may easily be implemented through a simple table
sheet, using well-known software tools.
2. Collection of time recording data
Individual data would be collected over a given period (e.g. one year) and compiled as
described in subsections a and b below.
- 21 C03/28-E
a. Activities related to the processing of filings
Name of the filing
Activity
Time spent
Number of units
X-SAT
No. 9.7
10 hours
1,300
X-SAT
No. 9.13
20 hours
590
X-SAT
Res. 49
1 hour
N/A
Y-SAT
No. 9.7
30 hours
1,800
Z-SAT
AP 30
15 hours
2,100
It has to be noted that, as one filing may cover various activities, the breakdown between those
activities needs to be specified for each filing.
The total amount of time dedicated to a particular activity is the sum, for all the filings that have
been processed, of all the slices of time spent to perform this activity. The share of the workload
dedicated to this activity is the ratio of the total time dedicated to this activity over the whole
amount of time spent by the BR.
Furthermore, for activities pertaining to categories already listed in Annex A of Decision 482
(mod 2002), the total number of units per activity can be calculated (see an example in the
following table) and may be relevant to derive charges for filings, using an appropriate
methodology.
Activity
Number of filings involved Time ratio (%)
Total number of
units
No. 9.7
250
60
500,000
No. 9.13
127
10
52,000
No. 9.12
58
5
19,000
AP 30
20
10
28,000
b. Activities not related to the processing of filings
The total amount of time dedicated to a particular activity is the sum of all the slices of time
spent to perform this activity (see an example in the following table).
Activity
Subject
Time spent
Mandatory assistance under No. 9.60
N/A
3 hours
Preparation of Rules of Procedure
11.yy
4 hours
Attendance at a meeting
RAG
8 hours
The total amount of time dedicated to a particular activity is the sum, for all the filings that have
been processed, of all the slices of time spent to perform this activity. The share of the workload
dedicated to this activity is the ratio of the total time dedicated to this activity over the whole
amount of time spent by the BR.
Using the time ratio for each activity and knowing the overall costs for all activities, the costs
associated to one particular activity can be calculated.
- 22 C03/28-E
The following table shows a possible summary of all the activities, with a possible distinction
between the activities to be directly invoiced, those subject to cost recovery but reallocated, and
those not recoverable.
Activity
Time ratio
Costs
9.7
X%
X
9.13
Y%
Y
AP30A
Z%
Z
Preparation of Rules of procedure
T%
T
Mandatory assistance to administrations
U%
U
V%
V
100 %
Total costs to be recovered
Activities to be directly invoiced
…
Activities to be reallocated
…
Other activities not to be recovered
Attendance at non-ITU meetings
…
Total
3. Exploitation of the data
The synthesized data produced by time recording, as described in the previous sections, are
expected to enable design an appropriate schedule of charges by2:
–
establishing categories of charges, possibly different from those already in force, to
enable the invoicing of the activities agreed to be subject to cost recovery (so as to solve
the issue of those filings involving more than one category of charge, it may be
beneficial to have only one activity involved in a category of charge);
–
calculating the costs associated to all surveyed activities;
–
reallocating the costs associated to those activities agreed to be cost recovered without
being directly invoiced over those activities directly invoiced;
–
choosing an appropriate methodology to establish a schedule of charges.
____________________
2
It is to be noted that the approach developed
above may be improved and made more
accurate by taking into account the difference
in the categories of staff involved in the time
survey, so as to attribute different weighs to the
time dedicated to the activities.
- 23 C03/28-E
ANNEX 4
Radiocommunication Bureau Space Department Activities
Recommended For Inclusion Within Cost Recovery Charges
Subject To Clarification Of The Reallocated Costs
Table 1
BR Activities not currently covered by cost recovery for which a separate
invoice will be issued
Notifications (and Appendix 30B not covered by special sections)
Table 2
Other ongoing BR Activities not currently covered by cost recovery to be
included in invoiced charges for coordination or notification
Publication in the Space BRIFIC CDROM of special sections including
publications for coordination requests and advanced publications
Changes to the date of bringing into use
Updates to Master Register
Provisional recordings under 11.47
Suspension of notices under 11.49
Preparation and publication of Space network list
Preparation and publication of CR/D (including Res. 46/D)
Checking and publication of Due diligence information under Res. 49
Checking of Expiry of networks under Res. 4 and extension of Period of Validity
Checking of networks under Res. 51 and No. 9.5D
Suppression of networks
Mandatory assistance to administrations under Article 9 of the Radio Regulations
(e.g. No. 9.60)
Article 20 – Service documents (IFL)
Development and maintenance of BR Space Web page
Support given to IAP Department for software development related to satellite
network filings
Space Workshops3 outside the BR Seminar
____________________
3
Provision of space workshops outside the BR Seminar shall not be used a mechanism for
decreasing the space content of the BR Seminar.
- 24 C03/28-E
ANNEX 5
DRAFT
DECISION 482 (Rev. 2003)
Implementation of cost recovery for satellite network filings
The Council,
considering
a)
Resolution 88 of the Plenipotentiary Conference (Rev. Marrakesh, 2002), on the
implementation of cost recovery for satellite network filings;
b)
Resolution 91 of the Plenipotentiary Conference (Minneapolis, 1998), on cost recovery for
some products and services of ITU;
c)
Council Resolution 1113, on cost recovery for the processing by the Radiocommunication
Bureau of space notifications;
d)
Document C99/68 reporting on the Council Working Group on implementation of cost
recovery for satellite network filings;
e)
Document C99/47 on cost recovery for some ITU products and services,
recognizing
that the Plenipotentiary Conference (Minneapolis, 1998), by Resolution 88, resolved:
•
•
that cost recovery for satellite network filings shall be implemented as soon as possible
consistent with the general principles for cost recovery adopted in Resolution 91
(Minneapolis, 1998);
that all filings for the production of the special sections of the Weekly Circular for
space radiocommunication services concerning advance publication, and their
associated requests for coordination or agreement (Article 11, Article 14 plus
Resolutions 33 and 46, or Article S9 of the Radio Regulations) and requests for
modification of the space service plans contained in Appendices 30/S30, 30A/S30A
and 30B/S30B to the Radio Regulations, received by the Radiocommunication Bureau
after 7 November 1998, shall be subject to the application of cost recovery using the
methodology to be adopted according to Resolution 88,
further recognizing
the practical experience of the Radiocommunication Bureau in implementing cost recovery filing
charges and the methodology as reported to Council 2001 in accordance with Council Decision 482,
decides
1
that satellite network filings identified under recognizing above received by the
Radiocommunication Bureau after 7 November 1998 shall be subject to charges as set out in
Annex A to this decision;
- 25 C03/28-E
2
that the above charges for each satellite network1 filing communicated to the
Radiocommunication Bureau, shall be composed of:
a) a flat fee2 indicated in Annex A for each category3, 3bis,
b) an additional charge for the satellite network filing for which the number of [units],
when published, exceeds the number of [units]4 covered by the flat fee3bis;
3
that for satellite network filings received by the Bureau after 31 December 2001, the flat fee
component shall be paid, in accordance with decides 9, following receipt of the filing by the
Radiocommunication Bureau.
4
that the flat fee shall be regarded as a basic charge for a satellite network filing regardless of
whether it is a new notice or a modification to a notice5 .For modifications to a notice in Category 1
of Annex A, the additional charge will apply but no additional flat fee component will be charged.
5
that each Member State shall be entitled to the publication of special sections for one
satellite network each year without the charges referred to above. Each Member State may
determine which network shall benefit from the free entitlement. Modifications to the publications
of that network will be published with no charge up to the limit established for excess charges
indicated in Annex A, which was in force at the time of the original publication;
6
that nomination of the free entitlement for the calendar year of reception by the Bureau of a
filing shall be made by the Member State no later than the end of that calendar year5bis.
7
that for any network for which the API was received prior to 7 November 1998, there will
be no cost-recovery charges for the first coordination request referring to that API, regardless as to
when it is received by the Radiocommunication Bureau. Modifications to these networks
communicated to the Radiocommunication Bureau after 7 November 1998, shall be subject to a
charge in accordance with decides 2 above.
7bis
there will be no cost recovery charges for any request for modification to a plan received
prior to 7 November 1998. Any request for modification to a plan for publication in either Part A or
Part B received after 7th November 1998 shall be subject to a charge in accordance with decides 2
above.
8
that Annexes A (Schedule of processing charges) and B (Methodology) to this decision
should be reviewed periodically by the Council;
9
that the payment of charges specified in Annex A shall be made on the basis of an invoice
sent to the notifying administration or, at the request of that administration, to the satellite network
operator in question within a period of a maximum of six months after issue of the invoice. An
____________________
1
In accordance with Nos. 1.111 and 1.112 and Appendix 4 of the Radio Regulations, a satellite network consists of one
geostationary satellite, or one or more non-geostationary satellites, and one or more cooperating earth stations.
2
The methodology for the calculation of the flat fee and the additional charge is described in Annex B.
3
The fee per frequency unit shall not be understood as a tax imposed on spectrum users. It is used here as a driver for
the calculation of cost recovery relating to publication of satellite systems.
3bis
In the case of a filing involving more than one category of charge (see Annex A), the flat fee shall be the highest
flat fee of the categories involved in the filing. The additional charge, if any, is the difference between the charge for
all units, priced as additional units in their respective categories, and the charge for the number of units covered by
the flat fee, priced as additional units in the category associated to this flat fee, if this difference is greater than zero
4
The definition of the [unit] for each category is found in Annex A.
5
The charge for a modification, where applicable, is based on [units] in respect of those elements (e.g. assigned
frequencies, classes of stations, number of emissions) affected by the modification submitted. There will be no charge
for modifications which do not result in further technical or regulatory examination by the Radiocommunication
Bureau.
5bis
The free entitlement cannot be applied to a filing previously cancelled for non-payment.
- 26 C03/28-E
invoice for the flat fee component shall be issued upon receipt of the filing by the
Radiocommunication Bureau and, for the additional charge (if any), after the publication of the
relevant special section. Administrations shall be invoiced according to the flat fee charges in force
at the date of receipt of the filing or the additional charge (if any) in force at the date of publication
of their respective networks. In the event a satellite network filing is cancelled after payment of the
flat fee component, this flat fee component is not refundable. If a filing is cancelled as a
consequence of non-payment, the corresponding invoice(s) shall be deemed uncollectable;
9bis that, when an administration chooses to cancel, in its entirety, a satellite network filing
awaiting or under processing by the Radiocommunication Bureau, in the case of satellite networks
for which a notice has been received prior to 1 January 2002, if the cancellation is received before
the date of publication, no charges shall apply. In the case of satellite networks for which a notice is
received on or after 1 January 2002, subsequent cancellation will not remove the obligation to pay
the flat fee component; however, no charges will apply for the variable component (if any)
providing the cancellation is received before the date of the publication of the related special
section;
10
that publication of special sections for the amateur-satellite service shall be exempt from any
charges,
instructs the Director of the Radiocommunication Bureau to submit an annual report to the
Council on the implementation of this decision, including analyses of:
a) the cost of the different steps of the procedures;
b) the impact of the electronic submission of information;
c) enhancement in quality of service, including, among others, reduction of the backlog;
and
d) the costs of validating filings and requesting corrective action thereto,
invites the External Auditor
to prepare, in accordance with Article 31 of the Financial Regulations, and to submit to the Council
an annual report containing a financial and management audit of the processing costs incurred by
ITU in the selected cost categories identified in Annex B and, the charges collected.
- 27 C03/28-E
ANNEX A
Schedule of processing charges to be applied to satellite network filings
received by the Radiocommunication Bureau after 7 November 1998
Brief
description
of category
1
2
3
Detailed description of category
Advance
publication
Advance publication of a non-geostationarysatellite network not subject to coordination under
Section II of Article 9
Coordination
request under
Article 9
(excluding
9.11A) and
Articles 2 and
7 of
AP30/30A
Publication of a coordination request for a
geostationary-satellite network in accordance with
No. 9.6 along with one or more of Nos. 9.7, 9.11
and 9.21 of Section II of Article 9, and §2.2 of
Article 2 and § 7.1 of Article 7 of Appendix 30,
§2.2 of Article 2 and § 7.1 of Article 7 of Appendix
30A where the network filed for is in the fixedsatellite, the mobile-satellite or the broadcastingsatellite service
Joint
coordination
requests under
Article 9,
including
9.11A (GSO
case)
Publication of a coordination request for a
geostationary-satellite network in accordance with
No. 9.6 along with one or more of Nos. 9.7, 9.11
and 9.21 as well as Nos. 9.11A, 9.13 and 9.14 of
Section II of Article 9 and §2.2 of Article 2 and
§ 7.1 of Article 7 of Appendix 30, §2.2 of Article 2
and § 7.1 of Article 7 of Appendix 30A
Flat fee
per filing
(in CHF)
No. of [units]
in category
covered by
flat fee
Additional charge
per excess [units] for
filings with more
than the number of
[units] indicated in
the preceding
column (in CHF)
Calculation of Number of [Units]
for the category
1 300
6
147
(1000)
(3)
(220)
number of frequency bands summed
up for all frequency assignment
groups
5 600
1103
5
(3420)
(170)
(5)
21 000
1170
16
( 9800)
(130)
(15)
product of the number of frequency
assignments, number of classes of
station and the number of emissions,
summed up for all frequency
assignment groups
product of the number of frequency
assignments, number of classes of
station and the number of emissions,
summed up for all frequency
assignment groups
- 28 C03/28-E
Brief
description
of category
4
Detailed description of category
Coordination
request under
9.11A alone
(non-GSO
case)
Publication of a coordination request for a nongeostationary-satellite network in accordance with
one or more of No. 9.6 along with Nos. 9.11A,
9.12, 9.12A and 9.14 of Section II of Article 9
5
"Small"
coordination
requests
Incorporated in Category 2
6
Non-GSO
coordination
(9.21 only)
Publication of a coordination request (request for
agreement) for a non-geostationary-satellite
network in accordance with No. 9.6 along with No.
9.21 of Section II of Article 9
AP30/E,
AP30A/E,
AP30-30A/E
Publication of a Part A Special Section for a
proposed new or modified assignment in the
Regions 1 and 3 List or feeder-link Lists of
additional uses or a modification to the Region 2
Plans under §4.1.5 or 4.2.8 of Appendices 30 or
30A.
7
Part A Special
Section
publication
7.1
7.2
AP30
AP30A
Flat fee
per filing
(in CHF)
No. of [units]
in category
covered by
flat fee
Additional charge
per excess [units] for
filings with more
than the number of
[units] indicated in
the preceding
column (in CHF)
Calculation of Number of [Units]
for the category
7 100
137
62
(5600)
(50)
(41)
product of the number of frequency
assignments, number of classes of
station and the number of emissions,
summed up for all frequency
assignment groups
4 900
10
115
(1400)
(1)
(48)
product of the number of frequency
assignments, number of classes of
station and the number of emissions,
summed up for all frequency
assignment groups
product of the number of associated
earth stations (specific or typical,
recorded in the database) and number
of emissions, summed up for all
channels, type of polarizations and
beams
15800
875
11
(9100)
(320)
(14)
15800
648
11
(8500)
(320)
(12)
- 29 C03/28-E
8
AP30/E,
AP30A/E,
AP30-30A/E
Part B Special
Section
publication
8.1
AP30
8.2
9
Publication of a Part B Special Section for a
proposed new or modified assignment in the
Regions 1 and 3 List or feeder-link Lists of
additional uses or a modification to the Region 2
Plans under §4.1.5 or 4.2.8 of Appendices 30 or
30A.
AP30A
AP 30B
Publication associated with the update of the list of
existing systems in Part B of the Plan in accordance
with the procedure of Section IB of Article 6 of
Appendix 30B or
Publication associated with the update of the list of
subregional systems in accordance with the
procedure of Section II of Article 6 of
Appendix 30B
product of the number of associated
earth stations (specific or typical,
recorded in the database) and number
of emissions, summed up for all
channels, type of polarizations and
beams
6600
129
71
(4500)
(208)
(14)
6200
126
69
(4400)
(180)
(11)
9 900
1
855
(8300)
(1)
(5600)
product of the number of bands and
number of beams
- 30 C03/28-E
ANNEX B (to Decision 482)
Methodology
1
The schedule of processing charges shall be established to recover the selected processing
costs for all filings for the production of special sections of the Weekly Circular for space
radiocommunication services concerning advance publication, and their associated requests for
coordination or agreement under Article 9 of the Radio Regulations (former Article 11, Article 14 plus
Resolutions 33 and 46) and requests for modification of the space service plans or lists contained in
Appendices 30, 30A and 30B to the Radio Regulations, received by the Radiocommunication Bureau
after 7 November 1998, in line with Resolution 88 (Minneapolis, 1998).
2
The Council is requested to review the charges whenever it considers appropriate, and at least
every two years, for:
– advance publication for those networks not subject to coordination;
– requests for coordination or agreement;
– requests for modification of space service plans or lists,
or for subsets of the above.
3
The charges cover the following costs:

costs of the Space Services Department associated with production of the content of
satellite special sections;

costs of the Informatics, Administration and Publications Department associated with
the production of satellite special sections;

a proportionate share of centralised administrative services costs of the General Secretariat
(excluding the Office of the Secretary-General and the Coordination, External Relation,
Communication & Strategic Policy Units);

a proportionate share of centralized support services costs of the General Secretariat
(excluding the Conferences Department).
4.
The number of units in each category that are covered by the flat fee is calculated such that 35
per cent of the number of publications expected to be processed in the next year will have that number
or fewer units.
5.
Each satellite network for which the total number of units of publications exceeds the
number determined under § 4 above for its category shall be subject to an excess unit charge of 80 per
cent of the average unit cost of that category during the preceding three-year period.
6.
The flat fee for each category is calculated in such as way that, based on the preceding
three-year period, the flat fee charges plus the additional charges per excess unit are equal to the total
cost for that category.
7
With reference to Resolution 91 (Minneapolis, 1998) and the Financial Regulations, the related
income and expenditure relating to the publication of special sections shall be segregated but included
in the budget of the Union and subject to external audit. Expenditure shall be split between cost of
publications exempted from cost recovery and those subject to cost recovery and included in the
budget of the Union. Income and expenditure shall be subject to external audit.
D:\282223470.DOC
30.05.16
30.05.16
- 31 C03/28-E
Annex 6
The cost of activities currently included in Decision 482
Radiocommunication Bureau Activities
and General Secretariat re-allocated costs
Processing of notices for space servicesRecoverable Costs
Radiocommunication Bureau support services

Coordination requests and modifications to plans

Registration

Preliminary examination
475’417

Pre-validation and notice preparation
447’267

Data capture and management
494’367

Comparison
123’592

Graphical data capture
491’030

Validation
219’852

Technical and regulatory examination

Finding capture
704’647

Final verification
302’156
84’097
8’748’500
Advance Publication

Registration and data capture

Regulatory Checks
336’389
69’948
475’865
Cost recovery invoicing
2’194’372
Plans
Directly related activities

Maintenance of the space related software

Overall management of treatment process (partial)
D:\282223470.DOC
4’486’145
79’500
30.05.16
30.05.16
- 32 C03/28-E
19’326’808
Sub Total
General Secretariat reallocated costs
Office of the Secretary-General and vice Secretary General
Excluded
Coord., ext. rel. Commun. & Strat. Pl. Units
Excluded
Conference Department
Excluded
Common Services Department
4’313’586
Personnel and Social Welfare Department
2’510’095
Finance Department
1’226’416
Information Services Department
3’810’164
Sub Total
11’860’261
TOTAL
31’187’069
D:\282223470.DOC
30.05.16
30.05.16