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TELEPHONY: TELECOM’S COMMITMENTS ON PREVIOUS SUBSCRIBERS’ UNPAID BILLS ACCEPTED


PRESS RELEASE



PRESS RELEASE

TELEPHONY: ANTITRUST AUTHORITY ACCEPTS TELECOM’S COMMITMENTS ON PREVIOUS SUBSCRIBERS’ UNPAID BILLS

Provision of a new line may no longer be made subject to payment of another customer’s arrears


Telecom Italia may no longer make the provision of a new telephone line conditional upon payment of the unpaid bills of another customer. This was decided by the Italian Competition Authority at its meeting on 21 August 2008, in accepting and making binding the commitments proposed by the company with regard to amounts owed by previous residents. This means the investigation begun on 13 December 2007 was closed without the recording of a contravention.

The investigation aimed to assess whether Telecom’s approach of subjecting a request for the activation of a new line or the taking over of an existing line to the payment of the unpaid bills of the previous customer, and thus payment of sums not corresponding to any service rendered, constituted an abuse of a dominant position.

As a result of the commitments, which were reformulated by Telecom during the course of the proceedings, where a new line is applied for the company may demand payment of unpaid bills only of the customer in arrears and not, as previously, also of individuals or entities having company or personal links with the debtor. Telecom has also reformulated its General Subscription Conditions to clarify explicitly that whoever takes over an existing line assumes the same legal position as the preceding customer, taking over any credits and accepting all the debts relating to the contract, including any payment due for services already provided.

Thus, anyone applying for a new line (with a different telephone number) will not be called upon to pay the arrears of third parties. If the new subscriber wishes to retain the same number, he will obviously be expected to pay any bills left by the previous subscriber.

In addition, the telephone company will no longer be able to make the activation of a new line conditional on the provision of capital guarantees by persons whose economic condition may prejudice payment of the service through being, for example, bankrupt or the subject of insolvency proceedings.

In the Authority’s view, the commitments adopted are such as to remove the prejudicial effects for consumers and the anti-competitive doubts underlying the original investigation: Telecom will no longer be able to use that atypical form of self-protection that allowed the company to demand payment of the arrears of third parties.

Rome, 22 August 2008