An attempt by the Italian Parliament to further liberalise telecom services has spurred an unprecedentedly tough reaction from top European operators and regulators that say the changes could protect vested interests.
With an amendment added last minute to a draft law meant to reduce red tape, the lower chamber of Parliament introduced a new liberalisation measure in Italy’s telecoms market.
MPs decided to allow so-called last-mile operators to choose their own repair and maintenance providers for telephone exchanges, which link the infrastructure between telecom networks to a customer's home (see background).
Currently Telecom Italia selects the providers of these services and negotiates prices on behalf of third-party operators.
“These services produce an annual turnover of around €400 million in Italy, of which €100 million are paid by third operators,” said Innocenzo Genna, a senior European telecoms consultant.
Genna estimates that maintenance and repair services constitute one-fifth of total costs paid by alternative operators to rent infrastructure from Italy's main fixed-line service provider.
If alternative operators were able to select these service providers on their own, they could reduce costs and make offers to consumers more competitive, the consultant said.
This liberalisation has been already introduced in other European countries.
An unprecedented European backlash
The Italian debate has spurred a wave of reactions in Brussels, triggering tones which are unusual for highly technical telecom disputes.
First came a letter of the industry association ETNO addressed to the EU commissioner in charge of telecoms, Neelie Kroes, warning her of the dangers posed by the Italian draft law and calling on her “to take urgent action”.
ETNO’s move was mirrored by the body that represents EU telecoms regulators, BEREC. In a press release, the usually discreet group voiced its “deep concern over Italian legislative moves to undermine regulator’s independence.”
Italy’s telecoms regulator, AGCOM, should be in charge of defining rules on access to telecom networks and services related to unbundling.
But is AGCOM’s independence really in danger? Observers of the Italian telecom sector claim that maintenance of telephone exchanges does not constitute a core telecom service.
What’s more, many argue that AGCOM is often seen as being too close to the core provider, Telecom Italia. There had been many calls to liberalise access to service providers, but AGCOM has regularly delayed decisions.