ALBACOM/TELECOM LEASED CIRCUITS (Start of full phase investigation)
PRESS RELEASE
The Italian Competition Authority initiated a proceeding against Telecom Italia, following a complaint filed by Albacom (a joint-venture created by British Telecommunications and BNL, who owns and runs a data transmission private network in Italy), in order to investigate an alleged violation of Section 3 of Law no. 287/90 (abuses). In fact, Telecom, by exploiting its position of legal monopolist in the market of leased lines (direct circuits), would have impeded new operators to enter the liberalized telecommunications markets (voice telephony for closed user groups, data transmission, value-added services).
Numerical direct circuits (also called dedicated circuits or leased lines) are telecoms public network lines which connect directly network terminal points through a dedicated line, by avoiding switching systems. Direct circuits are necessary to the suppliers of liberalized telecoms services, who lease such circuits to interconnect their own network hosts as well as to connect them with their customers. Given this essentiality requirement, the Community legislation, incorporated in Italy into the legislative decree no. 289/94, provided for the public carrier to be required to supply with direct circuits - except for cases of technical impossibility - all operators who request them for internal use or in order to supply liberalized services.
By contrast, Telecom Italia would have refused to provide its rivals with urban numerical direct circuits at various speed (between 64-Kbps and 2-Mbps, and higher than 2-Mbps), which would have been used exclusively by Telecom itself to supply its own services. In this way, Telecom's conduct might have had as its effect substantial prejudice to the other operators supplying liberalized telecoms services, who can use only a restricted range of transmission speed solutions.
In addition, Telecom Italia is alleged to apply tariffs higher than those applied in the principal European countries to lease direct circuits, even if this difference is justified neither by cost conditions nor a transparent accounting system. Such a situation would hamper the supply of new telecoms services by Telecom's rivals. In this context, it is also to be noted the practice carried out by the public carrier and complained by Albacom, according to which Telecom - if and when direct circuits are supplied together with liberalized services - would have leased direct circuits to its final users at prices lower than those applied to rivals, with consequent detriment to their activity dealing with liberalized telecoms services.