The Italian Competition Authority, in its meeting of March 28th, 2018, has decided to accept the commitments proposed by Telecom Italy SpA and Fastweb SpA, making them binding. In such a way the investigation on these companies, launched on February 1st, 2017to verify possible competition restrictions connected with the co-investment agreement between the parties, has been completed.

This agreement provides the construction of a fixed telecommunications network in optical fiber (FTTH) to cover 29 main Italian cities, by the common company Flash Fiber Srl.

When launching the investigation proceedings, it seemed that the agreement between Telecom Italy SpA and Fastweb SpA could integrate an agreement that could potentially prevent, restrict or falsify the competition in the wholesale services markets access to the fixed network and fixed, broadband and ultra-wideband retail telecommunications services. This agreement could in fact have established an important degree of coordination between the Parties concerning strategic choices related to broadband and ultra-wideband fixed networks, reducing the intensity of static and dynamic competition, considering that this cooperation involves the two main vertically integrated operators operating in the field.
During the investigation, Telecom Italia SpA and Fastweb SpA presented a commitments proposal according to article 14-ter, codicil 1, of Law n. 287/1990, articulated in six remedies.
The final version of the commitments can be summarized as follows:

Commitment no.1: realization of the new FTTH network in defined time delays, according to the following predefined yearly objectives: 30% by 2017; 70% by 2018; 85% by 2019 and 95% by 2020. The Parties are committed to nominate, following consultation and agreement of the Italian Competition Authority, a third independent subject, to certify the realization of the plan in the defined delay;

Commitment no.2:
a) removal of the preemption right, in favor of the Parties on the Flash Fiber network, from the remaining co-investment agreement compared to the industrial requirements of Telecom and Fastweb;
b) availability of a guaranteed number of optical fibers for each optical distributor for third party subjects;
c) obligation to conclude agreements for the access to the vertical segments with third party subjects.

Commitment no.3: predisposition of independent offers of VULA and NGA bitstream services from Telecom Italia and Fastweb with non-discriminatory conditions; access to laying infrastructures through exchange agreements of the available rights on respective infrastructures or concession agreements of the IRU rights with transparent, non-discriminatory, fair and reasonable conditions;

Commitment no.4: backdating of the closing date of the common company Flash Fiber to 2035, only for the time estimated necessary to recover the investment and nomination, after consultation and approval of the Italian Competition Authority, of a third independent subject to verify the attainment of the recovery point of the investments;

Commitment no.5:
a) modification of art. 7.3 of the co-investment agreement, with limitations only to the minimum amounts provided by the business plan of the obligation for the Parties to use network infrastructures realized in common;
b) limitation only to the central areas of the 29 cities of the geographical project in which there is a contractual obligation assumed by the Parties to refrain from signing agreements with other companies;
c) elimination of art. 7.5 of the co-investment agreement (possibility to use Flash Fiber as an instrument of combined participation in the Infratel tenders for the non-covered areas of the territory);
d) elimination of art. 8 of the co-investment agreement (collaboration between the Parties in the combined implementation of vectoring technologies in the areas, outside the 29 cities, where fiber to cabinet - FTTC networks have been realized).

Commitment no.6: measures to hinder the exchange of commercially sensitive information between the Parties using Flash Fibe.
The ICA has stated that the engagements are suitable to exceed competitive concerns, adequately evaluating the efficiency of the existing co-investment agreement between Telecom Italia and Fastweb. This plan, as modified by the commitments introduced by the Parties, will promote the development of infrastructural competition in the fixed network telecommunications markets and will allow a rapid covering process of the national territory with new generation networks.

Rome, 9 April 2018