Italy: Regulation of Telecommunications, Broadcasting, and Public Utilities - Proposed

Last Updated: 31 October 1995
This article is part of a series: Click Key Power Specific Clauses in Power EPC Contracts for the previous article.
The regulation of communications in Italy is in the process of being completely restructured. This is a result of the planned privatization of the telecommunications company, Telecom Italia S.p.A., pressure from various social and political forces to open up television broadcasting to the market, and the increased use of cable and satellite technology, among other factors, such as pressure from the European Commission. At present, telecommunications is regulated by the Ministry of Post and Telecommunications, and television is regulated both by the latter and an Authority for Television Broadcasting and the Press. As we report in another entry in Business Monitor, the Italian government has enacted a law to establish regulatory authorities for energy, telecommunications and television broadcasting. In this context, the Italian Parliament is now considering a number of legislative proposals which would change both the substance of regulatory law and the institutions which will administer such law.

The two most significant proposed laws now under consideration are that submitted by the Minister of Post and Telecommunications, Mr. Antonio Gambino (House Doc. 3180), and that prepared by the House Special Commission for the Reorganization of the Television Sector, with an amended version of this Commission's proposal submitted by Congressman Vittorio Dotti.

The proposals add to the foundation provided by existing legislation on television broadcasting, introduce specific norms to address cable and satellite transmission, and add to the incipient regulation of telecommunications activity, which until recently has been completely in government hands. These proposals also address two concerns in the Italian communications field which are often confused: the regulation of antitrust and the protection of the plurality of ideas. The latter two areas stem from the different requirements of Italian Antitrust Law, designed to avoid abuse of a dominant position on the communications market, and the Italian Constitution, which guarantees freedom of expression by a plurality of voices in broadcasting.

In Article 2, entitled "Provisions on Competition", the Gambino Proposal would prevent Telecom Italia S.p.A. from assuming an equity holding in a television company, and likewise would prohibit television companies from assuming an equity holding in Telecom Italia. Under the same Article, private telecommunications companies would be able to assume equity holdings in television companies, but such holdings could not be one of control; the same rule would apply to television companies' holdings in private telecommunication companies. The Gambino proposal applies these prohibitions neither to persons holding concessions for local television broadcasting nor to the operators of local cable networks. However, the same Article would prevent the operator of a cable network capable of serving more than five million persons (about the size of Rome and surrounding communities) from acquiring licenses to serve additional areas.

The House Commission Proposal, and Mr. Dotti's amended version, both divide their treatment of plurality of expression on the one hand and antitrust regulations on the other, by placing them in separate Articles. On antitrust, the Commission proposal would prevent a single subject from holding more than 20% of the concessions granted nationally for television broadcasting, and provides similar limits on market percentages for various categories of television and radio broadcasting. Mr. Dotti's amended version places more weight on traditional antitrust enforcement, as already provided for by law.

Each proposal addresses the increasing private presence in communications and evolving communications technology by presenting authorization procedures for broadcasting by cable or satellite. The Commission Proposal delegates licensing power for the construction of cable networks and their operation, as well as the operation of satellite transmission, to the yet-to-be-founded Communications Authority. For satellite transmission, the Gambino proposal also places licensing power in the same Communications Authority. For cable, the Gambino proposal provides for either local or national licensing, depending upon the size of the cable network to be established. It is interesting to note that, in the Gambino proposal, both the applicant for authorization and any parent companies of the applicant must be residents of the European Union, unless the country in which they are residents allows reciprocal treatment for Italy.

The Gambino proposal allows Telecom Italia to continue developing its cable network, but provides a right to all licensees to connect to such network, and other networks. The Minister of the Post may prohibit connection to ensure the operation of the network, maintain its integrity, ensure the operation of services for the public good, or to protect privacy and confidential information. The Gambino proposal would have allowed private development of cable networks as of January 1, 1996, with the right to apply for licenses for all television, telecommunications, and multimedia services, but reserving Telecom Italia's monopoly on voice transfer services until January 1, 1998.

Once the communications regulatory authority, discussed above and in another Graham and James entry on this data base, has been established, the proposed legislation in this field should become more focused. At that time, the authority designated to supervise the field will be defined, and its powers will be determined. The procedures for licensing and supervision will thus be easier to delineate.

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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This article is part of a series: Click Key Power Specific Clauses in Power EPC Contracts for the previous article.
This article is part of a series: Click Key Performance Clauses in Power EPC Contracts for the next article.
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