Stampa

TELECOM ITALIA'S INTERCONNECTION OFFER (Advisory opinion)


PRESS RELEASE



The Italian Competition Authority, in compliance with Section 22 of Law no. 287/90, expressed to the Ministry of Communications its disagreement with the current offer of interconnection made available by Telecom Italia, the incumbent telephone operator.
The Authority examined both the pricing structure and the technical part of the offer, and found that Telecom Italia's offer was out of line, on the technical side, with the requirements of the liberalization Directives and diverged substantially from the interconnection offers made by all the other European telecoms operators.

With respect to Telecom Italia's interconnection pricing, holding the lack of a clear-cut imputation of costs of individual service elements into the price for the services that the company will provide, the Authority did not find justifications for the deviation of the proposed tariffed rates from the threshold values based at the Community level.

With regard to the technical side, the interconnection pricing reveals both structural limitations, as the delay of interconnection of local telephone districts to Telecom Italia's network until September 1st, 1998, and an inadequate range of services. As such, Telecom Italia's interconnection offer does not include certain essential services as provided for by Community Directives and ordinarily supplied by the other European operators, as, inter alia, interconnection offer at national level, that would allow new entrants to ensure call termination to their customers all over the national territory. The non-supply of this service by the dominant operator would prevent future newcomers to effectively compete with the incumbent.

In addition, Telecom Italia's offer does not provide: interconnection between networks and service suppliers which are already interconnected with Telecom Italia's network; the offer of unbundled services and the possibility of overlapping between the interconnection areas and the local telephone districts; interconnection of leased lines and data networks. Further, pricing neither includes interconnection to provide telephony service making use of the integrated services digital network (ISDN), nor some advanced services which according to the European Commission should be contained in the interconnection offer, as calling line identification, call diverting, phone credit cards, toll free numbers.

Lastly, carrier selection service allowing Telecom Italia's customers to choose a different carrier to provide interurban or long-distance calls is offered by the incumbent in such a way as to create an undue discrimination in giving newcomers equal access to the supply of their service over the national territory. Indeed, the lack of overlapping between the interconnection areas and the local telephone districts defined by the National Telephony Plan and setting Telecom's Italia tariffs, would lead to an anticompetitive situation in numerous places where Telecom Italia will remain the only provider of interurban calls until the implementation of alternative networks would be fully developed.

On the basis of the grounds above, the Authority deemed that Telecom Italia's interconnection offer would create substantial distortions to the introduction of competition in the liberalized markets for telecommunications services. Telecom Italia's interconnection pricing is likely to create technical, commercial and economic obstacles to the entry of newcomers, so that its application could block the development of a number of operators, and contribute to predetermine the requirements of their offer on the basis of ties established by the incumbent.

The Authority highlighted that the interconnection offer should be designed to ensure all new entrants equal access to market, to avoid undue discrimination and non-transparency by Telecom Italia and, lastly, to facilitate and quicken the start-up of competition in the market for telecommunications services.

The Authority also expressed to the Ministry of Communication the need that the interconnection offer be re-formulated taking into account the guidelines set out at the Community level, so as to make it in line with the offers made by all the other European telecoms operators, with respect to both the technical aspects, the provision of services and the terms applied. The Ministry of Communications prepared a draft regulation setting out general provisions on interconnection and relating agreement, which imposed on the telecoms carrier the obligation to align its interconnection offer. The Authority is examining such a draft, in order to submit  its opinion.