PARLIAMENTARY RADIO NETWORK (Advisory opinion)
PRESS RELEASE
The Italian Competition Authority submitted to the Speakers of the Senate and Chamber of Deputies, the Prime Minister and the Minister of Communications an advisory opinion concerning draft law no. 3053 on financing radio broadcasting of Parliamentary activity.
The draft law states that competing bidders should be invited to tender for the service contract. Assuming that universal service does not imply exclusivity in favour of the public broadcaster, the Authority pointed out that using the competition is the best solution if and when the access of a number of operators could not be provided for.
However, the Authority was unfavourable to award criteria taking account of the investments made in the sector in question. Holding that the draft law sets forth precise reliability technical requirements, the investment criterion could have the effect of distorting competition to the detriment of smaller operators.
The above draft law, in addition, suspends the effectiveness of the enforcement of Section 14 of the service contract between RAI-Radiotelevisione Italiana and the Ministry of Communications until December 31st, 1998. The Authority said that such a Section providing for the obligation on RAI to start up the Parliamentary network should be amended and the obligation should be repealed. In the event that RAI is awarded, the subsequent convention signed with the State will establish the obligations concerned and, in the event that another broadcaster is awarded, there would be a useless duplication of the service being financed by income from subscriptions.
Add to that, the Authority felt that Section 33 of the same service contract, under which the amount of the subscription rate also depends on the investments made by RAI to implement the Parliamentary network, should be amended on the basis of two grounds. First, such a financing was imposed by an obligation which has been already overcome for this year and, in the event that RAI is awarded, would be financed again by another public subsidy; second, it could facilitate RAI’s investments in the contiguous markets of Frequency Modulation (FM) radio broadcasting in such a way as to distort competition. This is even more true as award criteria would take account of investments made in the sector: indeed, arranging for a bidding contest and, at the same time, financing the participation of a bidder would constitute a distortion on competition.