Despite solid evidence that the Italian government intends to deregulate the process of modernising the national telecommunications network with cable, it is not clear how it intends to prevent Telecom Italia SpA from monopolising the activity in areas where it has exclusivity, said senator Franco De Benedetti in an article in the Italian business journal […]
Despite solid evidence that the Italian government intends to deregulate the process of modernising the national telecommunications network with cable, it is not clear how it intends to prevent Telecom Italia SpA from monopolising the activity in areas where it has exclusivity, said senator Franco De Benedetti in an article in the Italian business journal Il Sole-24 Ore. Debate has raged in Italy since Telecom Italia announced it would be undertaking a massive investment programme to lay fibre optic cable throughout the country. Despite its legal right to do so, many have called for a limit on the project because it would only cement the operator’s existing monopoly. In recent weeks, telecommunications minister Agostino Gambino had indicated informally, at conferences in Venice and Naples, that the government intended to deregulate the process, but without giving much detail. A document delivered to the Italian parliament by Gambino last week is, said De Benedetti, Carlo’s brother, The first official documen t that permits us to know the exact state of the minister’s orientation on this argument. Specifically, the document states that: Italy has a serious lag in implementing a cable network, the only means today to provide interactivity; deregulation has already affected mobile communications and value-added services; vocal telephony and infrastructure remain; in light of Telecom Italia’s accelerated programme, not deregulating cable before 1998 runs the grave risk that the legal monopoly will turn into a de facto monopoly within those three years; and avoiding this situation is not a task that can be left to the Antitrust Authority: it would be impotent in the face of a monopolist that is not confronted with multiple competitors. Realising that current law would allow competitors to lay cable only in areas left untouched by Telecom Italia and that voluntary cabling agreements with the operator are impractical, Gambino intends to deregulate infrastructure, except for voice, as of next January 1, said De Benedett i. As a result, local cable operators would have the right to provide all telematic and audiovisual services and, as of January 1 1998, voice telephony as well. Gambino said his change in attitude was due to the realisation that Parliament holds a majority in favour of rapid deregulation, which was expressed in a resolution late last month. The problem, said De Benedetti, is that Gambino’s attitude toward deregulation falls short of Parliament’s in that he in no way intends to limit Telecom Italia’s activity. In its resolution, Parliament demanded that deregulation preclude Telecom Italia from acquiring new networks and from entering the television market and promote the start-up of local cable operators authorised to provide telephone service. The objective was clear, writes De Benedetti, to have competition in the inter-city and urban telephony markets and non-monopolistic development in the multimedia market. Instead, the telecommunications minister has made a proposal that adds insult to injury, since while cloaking himself in deregulation, he is leaving the field wide open to the monopolist, complained De Benedetti. Therefore, we are confronted with yet another episode that demonstrates the notable divergence between the intentions of the major ity and the government in terms of privatisation.