Telecom Italia’s Alice 20Mega offer has been blocked by a decision of the Regional Administrative Tribunal of Lazio (No. RG 4376/2006, hereinafter the "Decision").

The Decision was rendered in a claim filed by AIIP (Association of Italian Internet Services Providers), Telvia and TAG (two independent ISPs) against AGCom, the Italian Regulatory Authority on Communications and Telecom Italia S.p.A.

Alice 20Mega had been previously launched by Telecom Italia as a residential retail service which featured a top download speed of 20 Mbit over xDSL line at the price of a regular premium residential xDSL.

Electronic communications sector regulation requires Telecom Italia – which bears the status of operator detaining Significant Market Power as per AGCom’s evaluation - to propose to its competitors when launching a new service/offer a corresponding wholesale offer at cost minus conditions (at least -30%).

Furthermore, if the new offer requires infrastructural modifications to the competitors' networks, there should be a prior ninety days’ notice to AGCom of the offer, else thirty days are sufficient.

It is also very important to consider that sector regulation requires Telecom Italia to offer any "innovative" product/service on a market where such operator carries SMP, at a disaggregate level (i.e. each component of the service must carry separate pricing and conditions and there should be the possibility of acquiring it separately from the others).

The above conditions are aimed to ensure an efficient and competitive market, pursuant to the provisions of the Framework Directive (2002/21/CE) which replaced the ONP (Open Network Provisions) Directive.

AIIP and the other claimants decided to act against Telecom Italia and AGCom on the grounds that Alice20Mega was being proposed, at a wholesale level, as a resale of the complete Telecom Italia offer with a 20% "minus": such offer was not disaggregate and there had been no ninety days’ notice.

Telecom Italia’s competitors – grouped in AIIP, claimed that the sole resale of the Alice20Mega offer did not comply with the applicable regulations and that, to comply, a disaggregate bitstream wholesale offer should have been proposed with the appropriate timing and cost minus factor.

After having decided, in a first hearing, not to grant any interim measures the Lazio TAR convened the parties on very short terms for the merits and decided to revoke the autorization to market Alice20Mega.

The Decision contains many interesting principles such as the fact that SMP operators have a "special responsibility": when launching a new offer they do not enjoy full freedom of enterprise since they are to make sure that they are not abusing of their dominant position.

In addition to this, the Decision recognizes that Alice20Mega is not an atypical service (Telecom Italia’s theory) and that it is follow applicable market laws and regulations.

It remains to be seen whether the Decision will hold against Telecom Italia’s appeal at the State Council, the superior administrative jurisdiction in Italy.

The appeal has already been filed.

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