Stampa

ALBACOM/EXECUTIVE SERVICE (Conclusion of a full phase investigation)


PRESS RELEASE



The Italian Competition Authority concluded 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). The complainant considered itself to be damaged by Telecom's behaviors regarding the supply of the Executive Service.

In fact, Telecom applied rate discounts on the telephone call traffic managed by the commuted public network (both domestic and international), depending on the volumes of telephone calls originated by virtual private network users.

The Executive discount system arose from the Ministerial Decree of May 16, 1996, establishing rate reductions for high volumes of telephone calls. Such discounts could be applied only by Telecom, as a monopolist running the commuted public network.

Telecom's conduct in this way could made non-competitive offers by competitors who supplied liberalized services, given that they were not able to apply independently rate reductions on the telephone call traffic managed by the commuted public network.

Thus Telecom could impede entry of competitors into liberalized telephone services and expand its dominant position from the services supplied in monopoly regime to those provided in free competition.

The Authority deemed that the rate mechanism set out in the Ministerial Decree mentioned above violated Law no. 287/90. Further, the Authority felt that Telecom's conduct, in particular the ways of application of rate reductions, did not comply fully with provisions contained in the Decree and was to be considered an independent business behavior, which could violate the Competition Act.

However, following the remarks made by the Authority during the investigation, Telecom acknowledged the potential anticompetitive effects of the Executive Service and modified its conduct substantially.

In particular, Telecom recognized that telecommunications competitors should enjoy conditions of access to the public network at least equal to those provided for its own customers, so as to remove the discriminatory effect of the rate mechanism of the Executive Service. In this way, competitors would be able to supply clients with liberalized services offering them as the same conditions as Telecom's on the telephone call traffic managed by the commuted public network.

The Authority therefore ruled that Telecom's independent conduct, even if deemed to be in violation of Law no. 287/90, resulted to be ceased following the commitments undertaken by the company.

Furthermore, the Authority considered it opportune to highlight to the Ministry of Postal and Telecommunications Services the incoherence between the Decree mentioned above and the Competition Act and express the need to predetermine new rate mechanisms more appropriate to the liberalization of services and more compatible with the competition law.