Italy: How The Italian Telecommunications Scene Finally Changes - The Italian Chamber Of Deputies

Last Updated: 1 August 1997
The Italian telecommunication scene slowly evolves. On July 16th, 1997, the Chamber of Deputies adopted a bill on the Telecommunications Authority, presented by Posts and Telecommunications Minister Maccanico, which has introduced fundamental principles required by the European Commission in order to avoid distortions in the free and competitive market. The bill was approved also by the Senate on July 29.

The bill is a complex and multifaceted document focused to apply a new general discipline to the communication sector. It aims to govern various fields, including telecommunications and broadcasting (such as voice telephony and pay television), services and infrastructures, franchises and authorizations, competition rules and penalties.

Article 1 provides for the creation of an Authority, and defines criteria for the election of its members and their competences. The Authority will consist of the President; the Committee for Infrastructure and Networks and the Committee for Service and Production, both numbering four people; and the Council, made up of the two Committees and the President. The members of the two Committees will be chosen by the Chambers of Deputies and the Senate, while the President will be designated by the President of the Republic on proposal of the Prime Minister. The members, elected among "personalities of high and acknowledged professionalism and competence," will rule the Authority for 7-year terms. They cannot be re-elected; neither they can have professional relations with enterprises in the telecommunications industry. The Authority will be a self-ruled entity, determining the competencies of the "Council of Nine" and of the two Committees.

Article 2 of the bill, on the "Prohibition of Dominant Positions," fixes two important limits:

  • Each broadcasting and radio provider employing ground stations within Italy is limited to a 20% share of the national distribution plan of radio frequencies;
  • At the same time, one provider cannot collect more than 30% of revenues deriving from the broadcasting services provided from earth stations as well as by cable and satellites.

In the pay television sector, no provider will be allowed to own more than one codified broadcasting service.

An important section of the bill concerns the guaranties of access for third parties to communication "platforms" in order to provide digital programs by satellite and by cable as well as programs broadcast by ground stations. The bill strengthens the control power of the Authority over evaluation of the criteria for authorization. The Authority's role will be to discipline future "entries" on the platform, while promoting fair and free competition. However, it should be pointed out that the bill itself, at point 19 of Article 2, authorize the State company providing broadcasting services (RAI) and the other State company providing telecommunications services (STET) to work together on the same platform (!).

It's worth mentioning here that, at present, the Italian Antitrust Authority, the Autorita. Garante della Concorrenza e del Mercato, is the authority regulating competition in this sector. However, pursuant to article 2 of the Maccanico bill, all agreements should be submitted to the review and scrutiny of both authorities.

Article 3 will govern the distribution of franchises for broadcasting services. The new Authority will adopt new regulations and a plan for rights to use frequencies. The regulation will fix guidelines for the national broadcasting stations in order to guarantee shares of self-production as well as shares of Italian and European production that must be respected by the broadcasters.

Articles 4 and 5, on telecommunication networks and services as well as on interconnection, access and universal service, provide a general regulatory regime for telecommunications in contemplation of the full liberalisation scheduled for January 1998. Article 4 establishes that the Authority will grant franchises for installation of landline as well as wireless telecommunications networks. To install earth stations providing satellite services, on the contrary, it will be necessary to obtain specific authorization from the Authority.

Finally, the Maccanico bill is also innovative in foreseeing a reduction to 4% of the value added tax (VAT) on sale of digital decoders and on the interconnection costs via cable and satellite, in order to reduce the existing gap between Italy and the rest of Europe in the cost of such services.

This law will govern the present "status quo" in a manner that reconciles several economic and political interests. However, it is expected that the full liberalisation of the infrastructure and of voice telephony services, in January 1998, as well as the growth of digital and satellite television in Europe, will soon supersede such legislation which, as the international observers have noted, mirrors Italy's internal controversies of the last decade.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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