On May 14, 1998 the new Communications Ministry Decree on the allocation of the costs related to the Universal Service Obligation has been published on the Official Gazette. The Decree terminates the general uncertainty of the telecommunications service providers on the amount of participation to the costs related to the Universal Service and the modalities under which such allocation is intended to be managed. In that respect, the Decree introduces a fund with the Ministry of Communications for the financing of the costs of Universal Service provision.

Under the Italian Telecommunications Regulations, Universal Service Obligations include the provision of fixed public voice telephony services, publication of telephone directories and provision of subscriber information services, public payphones, free emergency call services and special services for disabled or disadvantaged people. Initially, the obligation of universal service has been set on Telecom Italia, yet the service could be imposed in the future on any other service provider operating in the market.

The costs for USO must be borne by public networks providers, voice telephony operators and mobile and personal licensees. Providers of value added services, data transmission services, Internet providers, providers of private networks and providers of services to Closed User Groups are excluded from contribution to the fund. Under specific market competition conditions, the Telecommunications Agency may also decide to exempt newly entered operators from contribution to the fund.

Starting from January 1, 1999, Telecom Italia will have to indicate to the Communications Agency the calculation of the costs related to USO, and the Agency will decide if a division of costs is to be applied. If so, the Agency will entrust a special body with the inspection of the calculation of the net costs. The inspection must take into account any market advantages of the provider in the offering of USO, such as the recognition of its commercial name. On the basis of the inspection report, the Agency will decide if division of costs is justified, and will decide which operator must contribute to the fund.

The costs to be divided among operators include the net costs of the universal service obligations, the costs for the control of the calculation of such costs, and the costs borne for the development of scientific and technical research and formation in the telecommunications field.

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