Italian telecommunication services have been supplied, until recently, solely by government-owned telephone companies. However, a private company, the Omnitel consortium, owned by Olivetti S.p.A., Bell Atlantic and other partners, recently joined the government-owned, mobile telephone company, Telecom Italia Mobile S.p.A. ("TIM"), on the GSM market. As a condition to granting such access, the Italian government required Omnitel to pay an entrance fee of 750 billion Lire. TIM was not required to pay any entrance fee for its own mobile telephone operations.

On October 4, 1995, the European Commission formally approved the opinion of its Competition Commissioner, Mr. Karl Van Miert, that the fee requirement described above, as applied solely to the private competitor of a State company, is in violation of European Union antitrust law. The Italian Government has argued that TIM was already in possession of a license for mobile telephone services, and thus was exempt from the fee. Article 90 of the Treaty Establishing the European Economic Community subjects public undertakings entrusted with the operation of services of general economic interest or revenue-producing monopolies to the requirements of UE antitrust law.

The Italian Minister of Post and Telecommunications, Mr. Agostino Gambino, and the Managing Director of the parent corporation ("STET") of the Italian telephone company, Mr. Ernesto Pascale, are in contact with Mr. Van Miert and attempting to reach a settlement to this matter. The clearest solution would be to even the playing field by either requiring TIM to pay an entrance fee equal to that paid by Omnitel or granting the latter a reimbursement of the fee it has already paid; however, it is probable that Italy and the EU will reach some other, negotiated compromise. Arguments stemming from Italian sources include assertions that TIM has invested approximately 600 billion Lire in the GSM system, that a contract in force between TIM and Omnitel should control the relations between the parties, and that legislation now being formulated may penalize TIM, thus offsetting any previous advantage. One solution that may be adopted is to provide service discounts amounting to an agreed-upon percentage.

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