Italy: Proposed Legislation for Italian Communications Authority

Last Updated: 19 July 1996
The Italian Council of Ministers recently submitted proposed legislation to the Senate to establish an Italian Communications Authority and regulate market dominance in the communications sector (see separate entry on this data base discussing the second point). The proposed legislation responds to the Law of November 14, 1995, no. 481 ("Law 481/1995"), which mandates the creation of regulatory authorities to set rates and supervise quality, service, and competition in the provision of communications services and energy. Law 481/1995 actually created an Electric and Gas Authority, but only sketched the framework of what it refers to as the Telecommunications Authority. The recently proposed legislation would create such an authority, and would go beyond its mandate by merging the existing Authority for Broadcasting and the Media into the new entity, thereby creating a Communications Authority with jurisdiction over telecommunications, broadcasting, and media of all forms, including print.

The new Authority would be divided into two Commissions with one supervising infrastructure and networks and the other supervising services and products. Each Commission is assigned duties and powers that regard its respective sector of competence. The Commissions would work together as a Council, headed by the Authority's Chairperson. Because Law 481/95 requires the regulatory authorities to be located in different cities, some speculate that the Communications Authority will be located in Turin, where the Italian State Telephone Company is headquartered.

On the basis of Law 481/1995, the Communications Authority already has the power to set rates on a "price cap" basis. Although the proposed legislation does not transfer licensing power from the Ministry of Post and Telecommunications ("the Ministry"), where it is now vested, to the Authority, it does give the latter significant influence over licensing. The proposed legislation would require the Authority's Council to "adopt regulations regarding the criteria and procedure for issuing licenses and authorizations . . . ." and make proposals to the Ministry regarding "discipline of the issuing of licenses and authorizations . . . ." on the basis of the same regulations.

In addition to the powers which Law 481/1995 conferred on the Authority, listed in the following paragraph, the proposed legislation would empower the Authority to: certify whether a communications company exercises prohibited market dominance, review and authorize the transfer in ownership of companies holding communications licenses, advise the Ministry regarding the division of frequencies, and itself draft a plan for their assignment, define the criteria, including rates, for connection to a communications network, promote such connection, even internationally, and resolve disputes regarding interconnection. The inclusion of this last power could be useful, especially considering the difficulties which the now defunct Telsystem S.p.A. and the cellular company, Omnitel Pronto Italia suffered in attempting to gain connection, even on the basis of an existing contract, to the monopoly network of the Italian State Telephone Company.

Law 481/1995 gave the Authority the following functions: to examine market access and competition, to refer restraints on competition to the Antitrust Authority, to set rates, as mentioned above, to set general and specific quality standards to which utility companies must conform, to study the market and present Parliament with an annual report, to hear individual and organized consumer claims and order corrective action, to request information and document production, to conduct inspections, to impose fines of from 50 million to 300 billion Lire on utilities that fail to comply with its orders and suspend for up to six months the activities of those which repeatedly fail to comply, and to require that each utility company publish its standards.

The existence of the Communications Authority is a precondition to the privatization of the State Telephone Company, which the Government has said it would like to place on the market this autumn. However, given that the Italian Senate will go into recess on August 3 and the House of Deputies will enter recess on August 8, it is unlikely that the proposed legislation could be adopted before the close of this session. The Minister of Post and Telecommunications, Mr. Antonio Maccanico, has stated that if Parliament fails to pass the legislation, the Government may re-write it into the form of a law decree. The Government acting alone may adopt such a decree in cases of necessity and urgency, and it remains valid for only 60 days if not converted into law by the Parliament. Given that such measures of "necessity and urgency" are very often adopted in Italy temporarily to circumvent Parliament deadlock, and given the need for compliance with a Supreme Court decision affecting television licensing as discussed in another entry on this data base, we could well see the establishment of the Communications Authority on a precarious, sixty day basis, in August.

The content of this article is intended to provide general information on the subject matter. It does not substitute the advice of legal counsel.

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