SATELLITE COMMUNICATIONS (Advisory opinion)
PRESS RELEASE
Prof. Giuliano Amato, President of the Italian Competition Authority, has submitted an advisory opinion to Parliament and Government with regards to the development of competition in the satellite communications sector. In its advisory opinion, the Authority highlights that the presence of a rigid and inadequate regulation restricts competition in this sector, fosters the permanence of strong dominant positions on the part of inter-government satellite organisations and telecommunications national carriers and, finally, prevents the entry of new operators into the transmission and satellite services markets.
In particular, the Authority invites the Government to reevaluate the relationship between regulatory institutions and service providers, which have created a substantial conflicts of interest situation and have been the cause of serious distortions to competition. The Authority deems that in the international and inter-governmental organisations should be present representatives of the Italian Government and not of the public carrier (Telecom Italia), which, in this way, plays today the dual role of controller and competitor of the independent satellite systems operators; as well as the dual role of regulator and provider of services in a competitive regime. In Italy, the obstacles to competition are very prominent, since Telecom Italia still has an absolute monopoly over the satellite transmission capacity and the satellite services market. Furthermore, the Authority feels that the Government should issue, as quickly as possible, the legislative decrees which enact the European Directive no. 46/94 EEC, which was approved by Parliament with the 1994 Community Law. Indeed, only in this way can an immediate liberalisation of the satellite facilities markets, including the earth stations linked to the commuted public network, the satellite services markets and, in particular, the satellite transmission capacity, be obtained. Moreover, the Authority considers it necessary to amend legislative decree no. 545/95, in so far as it limits the entry into the market of the codified telecasting, whether it be via satellite or via regular transmission techniques. Legislative
decree no. 545/95 provides that only private television broadcasters holding licenses or authorisations for over-the-air rebroadcasts of foreign programmes can enter into the market of encrypted televisions.
These restraints hinder the exploitation of scope economies which can derive from the offer of elecommunications and television services. The Authority also considers it opportune to review the current discretionary methods for allocating electromagnetic spectrum frequencies, which constitute with the orbital spaces the natural resource that the satellite communications are based on. A more efficient allocation of the frequencies, including those presently excluded from commercial use, could be obtained by less discretionary assignment mechanisms, based on transparent and competitive procedures.
In particular, to assure that the value of the frequencies be determined on the basis of economic criteria and, as such, result in a more efficient use of them, it would seem opportune to modify the current licensing system and, in this way, to make the frequency assignment more onerous but to allow for the transfer, via sublicense, to third parties.