Communications Regulatory Authority

Communications Regulatory Authority
(AGCOM)
Annual Report
on activities carried out
and work programme
Rome, 30 June 2006
DISCLAIMER:
The English version of the Annual Report is intended to be regarded as an informative paper.
Only the Italian language version is to be considered the official one, pursuant law n.249, 31 st July
1997.

Communications Regulatory Authority
President
Corrado Calabrò
Commissioners
Nicola D’Angelo
Giancarlo Innocenzi Botti
Michele Lauria
Gianluigi Magri
Stefano Mannoni
Roberto Napoli
Enzo Savarese
Sebastiano Sortino
Secretary General
Roberto Viola
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1. THE COMMUNICATIONS SYSTEM
IN THE WORLD, EUROPE, AND ITALY
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1.1 IN THE WORLD AND IN EUROPE
1.1.1. Telecommunications
The world telecommunications sector continues to grow, in all regions, at a very
high pace, becoming a driving force for the economic progress of the entire world. In
2005, the average value of telecommunications services increased, in line with the
forecasts, by 4.7%, reaching a total of 907 billion euro; for the future it is expected that
there will be a slight drop in the growth rate: for 2006 and 2007 the increase is expected
to be 3.8% and 3.3% respectively.
The development of the new generation networks based on the Internet Protocol
(IP) and the converging services enabled by them confirms the fact that the sector has
entered a phase of profound evolution. On the one hand, trends that have been going on
for a number of years are being consolidated, in particular:
• the reduction of the proceeds deriving from the fixed network voice
services;
• the shifting of voice traffic from the fixed to the mobile network;
• the drop in the proceeds deriving from the traditional data transmission
components;
• the growth of broadband and the value-added services on both fixed and
mobile networks.
On the other hand, profound changes are being registered in the sector’s
competitive set-up, connected with the success of new integrated services. The
convergence has undertaken an initial route that envisages the integration of the mobile
activities with those of the fixed network. This evolution has characterized numerous
integrated operators: Telecom Italia, which in 2005 integrated its two activities, and, in
the previous years, France Télécom and Deutsche Telekom; moreover, in March of this
year, Telefónica also carried out the merger between fixed network services and its
mobile division. The integration operations have financial objectives (the considerable
cash generated by mobile services can be used to reduce indebtedness), cost
rationalization objectives (network management, marketing, and sales), and strategic
objectives (making it possible to exploit the opportunities deriving from integrated
offerings). For integrated operators, the offering of converging services currently
translates into the availability for the customer of dual-mode mobile phones that use, for
voice calls, the broadband networks near Wi-Fi accesses (thus making it possible to
apply more convenient rates than in the situation in which the call goes through the
mobile network), and cell phone networks for outside of that coverage range (cf.
paragraph 1.2.1.).
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But the fixed-mobile convergence is not just limited to integrated operators: it
also concerns, in different forms, operators present in just one of the two
telecommunications markets. The operators that do not hold mobile infrastructure can
offer integrated service packages by acquiring mobile operators or by entering into
collaborative arrangements with them (ranging from partnership agreements to mobile
network leasing contracts, as in the case of virtual mobile operators). On the other hand,
as for the operators operating only in the mobile sector, these can counter the integrated
offerings by acquiring fixed operators or Internet Service Providers (with whom they
can provide broadband activities and, as necessary, Internet Protocol voice services),
launching initiatives aiming to encourage the replacement of fixed with mobile
telephony (proposing, for example, convenient rates for calls to fixed network numbers
made from home), or focusing on the availability of wireless broadband networks as an
alternative to fixed ones (to completely replace the fixed line).
A second route concerns the converging offers of telecommunications services
and audiovisual contents. Last year saw the launching of numerous converging
initiatives ranging from offerings of Internet Protocol TV (IPTV) to mobile television
(in various technological standards, such as DVB-H, MediaFLO, and DMB).
In short, the convergence is adding further services to the by now traditional
voice and broadband Internet access (double play) services provided by fixed network
operators; the integration of telecommunications with the audiovisual sector broadens
the offering of services to include television (triple play), while the fixed-mobile
convergence makes it possible to complete the range, offering consumers a single allinclusive
package of communication services (quadruple play).
The advent of finally converging products and services is thus determining
profound changes in the sector’s competitive scenario. Indeed, during the past year there
has been a significant upswing in merger & acquisition activities.
In the United States, the main operation concerned the merger of AT&T with
BellSouth, which followed the completion of the acquisition of AT&T by SBC in 2005,
and Verizon’s acquisition of MCI.
In Europe, too, there have been numerous events on the corporate structure
change front, among which worthy of mention are:
− the acquisition, in late July 2005, of Amena by France Télécom, through its
Orange mobile division; the Spanish operator Amena will then be merged
with France Télécom España, a company of the French incumbent operator
which offers ADSL connectivity in Spain;
− Telefónica’s purchase of O2 and Cesky Telecom, thanks to which the
Spanish operator is now able to offer fixed-mobile services in the Czech
Republic and Germany;
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− the operation with which Deutsche Telekom purchased Telering, enabling
the mobile division of the German operator T-Mobile to enlarge its user base
on the Austrian market;
− the purchases of One.Tel and the Tele2 activities in the United Kingdom and
Ireland by Carphone Warehouse, through which the latter increases its
market position in fixed and mobile network services and broadband access;
− the amalgamation through which the British cable operator NTL, after
purchasing the competitor company Telewest in 2005, enters the mobile
market by buying the virtual operator Virgin Mobile;
− the merger in France between the alternative fixed telecommunications
operators Neuf Télécom and Cégétel, which generated the second fixed
network operator;
− the acquisition in 2005 of the English ISP Easynet by the English pay-TV
satellite service provider BSkyB, through which the latter will be able to use
another platform, fixed-network broadband, to distribute its audiovisual
content to end users;
− the purchase of 5% of the share capital of AOL, Time Warner’s Internet
division, by Google, thanks to which the Internet’s leading search engine
operator has now extended its activity to Time Warner’s audiovisual content
and the MusicNow pay music downloading platform.
In this continually shifting technological and market scenario, there has also
been a considerable evolution in the regulatory strategies defined by the sector
Authorities, in both Europe and the United States.
The topics on the discussion table concern, among others, the rules for access to
the networks of the incumbent operators, in particular the new generation operators, by
competitor operators (fixed telecommunications companies, Internet service providers,
or providers of value-added Internet services, such as IP protocol voice services, VoIP),
the regulatory status of the telecommunications operators on the one hand, and the cable
operators on the other (in a context that sees these operators, traditionally subject to
different regulation systems, offering similar services), and the neutrality of the network
operators (the principle according to which the operator that makes available its
telecommunications networks does not implement any kind of control on the contents
carried).
The discussion over the conditions for access to the incumbent operators’ new
generation networks has important effects on the supply of converging services, in
particular of IPTV services, which exploit the technological potentials of such
infrastructure. For telecommunications operators, the offering of such services is both
an instrument for differentiation of their offering and creation of customer loyalty, and
an alternative source of income that could make up for the decline in the average
proceeds per user deriving from the competition on traditional services. The new
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generation networks also make possible the preparation of fixed-mobile integrated
services that enable the operator to meet all the end user’s communication needs, i.e. the
possibility to approach the customer with a single integrated offering
(fixed/mobile/Internet/IPTV). For these reasons, the rules concerning the access to new
generation networks are a crucial junction for the future structure of the sector.
The regulatory Authorities thus find themselves in the situation of having to
identify the proper balance that can, on the one hand, encourage investments in network
innovation and, on the other, ensure the conditions suitable for guaranteeing free
competition in the sector and the single markets making it up.
The initiatives undertaken by the regulatory Authorities in recent years have, in
particular, been conducive to a transition to a competition model based on the use of
alternative infrastructure to that of the incumbent operator. The measures adopted in the
various contexts depend inevitably on the country’s infrastructure situation, in particular
on the presence or absence of alternative networks to those of the incumbent operator.
In the United States, the prevailing trend is that of an easing of the regulatory
constraints on infrastructure operators owing to the presence of a certain degree of
competition within the networks.
Falling within this regulatory strategy is the process of revision of the rules
governing telecommunications services carried out by the Federal Communication
Commission (FCC) to evaluate their adequacy for the changed market context
(“Triennial Review”). The Triennial Review Remand Order, published by the FCC in
early February 2005, removed some of the obligations that had previously been set for
the local incumbent carriers (ILECs) regarding access of the alternative operators
(CLECs) to the elements of their networks (Unbundled Network Element-Platform –
UNE-P). Similarly, the FCC eliminated the obligation, also for the ILECs, to allow
access to their broadband networks, under fair and non-discriminatory conditions and at
prices regulated by the independent ISPs. Access to these networks will thus be the
subject of free negotiation by the parties.
Underlying these decisions is, as already mentioned, the changed US
competitive context, which sees, among other things, the presence of local networks
(especially cable) in alternative to the copper infrastructure used for providing
broadband access services. In this framework, the FCC feels that the removal of the
obligations in force will stimulate investments in the broadband network infrastructure
by operators that do not have infrastructure of their own and that, even in the absence of
regulatory obligations, there are reasons (of economic convenience) that will lead the
ILECs to provide broadband connectivity services to independent ISPs under conditions
that will meet their needs.
More in general, even the Community regulatory approach, like that of the US,
has the goal of stimulating an infrastructure type competition and not the mere resale by
alternative operators of the incumbent carriers’ wholesale services; this goal must be
reached in a context of national markets characterized by the presence of a few (if not
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one) access networks owned by the dominant operators. The European Authorities,
believing that the duplication of the access networks is not possible in the short and
medium term, have thus identified unbundled access to the local network of the
incumbent operators as the most suitable instrument for leading the sector toward a
more mature type of competition.
The last topic that is generating a lively discussion, in the context of the
broadband network services, concerns the neutrality of the network, i.e. the principle
according to which the telecommunications operators must treat all the Internet packet
data carried on their networks in the same way, without any kind of discrimination. This
is a principle, not codified in any legislative texts, that has characterized the Internet
since its birth.
Among the factors that have fuelled the debate over net neutrality are, on the one
hand, the change in the offering of the Internet services by independent companies and,
on the other, the evolution of the networks of the integrated operators toward new
generation infrastructure that makes it possible to control voice and data traffic more
efficiently than in the past. As for the first aspect, several Internet service companies
offer, on the telecommunication carrier networks, Internet Protocol video and voice
services that are in competition with those offered by the fixed operators themselves.
Worthy of mention, by way of example, is the launching of Google Video, a service that
makes it possible both to view streaming content and to download for-pay content onto
one’s computer: the offering includes several very well-known television serials (CBS
itself has stated its intention to make available on Google Video both its entire
catalogue of television shows, and the NBA games, just twenty-four hours after they are
played).
Among the main supporters of the principle of net neutrality are the
infrastructureless Internet operators (such as Google, Microsoft, Amazon, Yahoo, and
eBay). Another stance, taken by the integrated telecommunications operators, states
instead that it is necessary to create a system in which the providers of services/content
that require significant bandwidth consumption (such as that needed to access Internet
Protocol TV) pay supplementary fees to obtain guaranteed quality levels for the service.
This way, according to the supporters of this viewpoint, it would be possible to avoid an
indiscriminate use of broadband, in favour of a more efficient service guaranteed to
users (in terms of higher content download speeds); the proceeds deriving from these
fees would be used by the telecommunications operators to invest in the upgrading of
their networks. The network would thus been segmented into two levels: a first part,
characterized by a high quality of the service, to be used for services that require
considerable bandwidth, and a second part, characterized by a “best effort” approach,
for the remaining traffic.
Faced with the increase in the applications and services made available by these
companies, the telecommunications carriers have proposed a pay-for service that,
according to this set-up, would allegedly guarantee a better quality of the services
offered to the end consumers. The proposal has, however, triggered a negative reaction,
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not only from the companies mentioned previously, but also from lesser companies,
which fear that the supply of differentiated Internet services will penalize precisely the
smaller situations, which will not be able to afford a better service. Even various
consumer associations have defended the principle of net neutrality: they maintain that
the existence of a network with differentiated service quality levels undermines the
Internet’s freedom of expression itself. This stance also extends to other operators, such
as, for example, the companies that offer online financial/banking services, which fear
that the elimination of the net neutrality principle will entail a considerable economic
outlay if they want to ensure customer services characterized by good service quality.
The world telecommunications services sector
The world telecommunications services sector reached, in 2005, a total value of
907 billion euro. As for the breakdown of the sector into geographic areas (Figure 1.1.),
North America, with 31%, is confirmed as the main region, followed by the
Asia/Pacific area (28.5%) and Europe (27.3%). The “Asia/Pacific” share, thanks to the
contribution of countries such as China and India, is inevitably bound to increase.
Nevertheless, it will take longer than expected to approach the North American level,
because of a downward revision of the forecasts concerning fixed telephony and mobile
network services. The decrease seen on the European continent is, on the other hand, a
consolidated phenomenon, determined by the saturation of the market of Western
Europe.
Figure 1.1. Value of the world telecommunications services market,
distribution by geographic area (%)
other countries
Asia/Pacific
North America
Europe
Source: IDC, 2006 | * Forecasts
The analysis of the dynamics of the voice and data segments (Figure 1.2.) shows
an increase of 2.4% of the voice services; this growth is attributable to the increase of
the mobile voice segment, which has more than made up for the drop in revenues
deriving from the fixed network voice segment (-1.5%). The negative trend of fixed
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network voice services has characterized all the geographic areas, with the exception of
that called “other countries”. Compared to the forecasts, the trends in the European and
Asian areas were particularly negative, registering reductions of 1.1% and 1.3%
respectively. In percentage terms the reduction was greater in North America (-4.1%);
this is, however a better figure than expected, confirming the fact that in the US market
competition, even if still strong in the voice segment, is progressively shifting toward
other components of the market also.
As for Europe, the negative trend of the fixed network voice segment was
contributed to by both the phenomenon of the partial shifting of the traffic from fixed
network to mobile, and the higher degree of competition owing, in particular, to the
proliferation of the VoIP offerings. In some countries, the operators that last year were
offering broadband voice connections, as a second line in addition to that of the
incumbent carrier, have now proposed themselves as single providers of communication
services, offering customers the possibility to withdraw from their contract with the
historic operator. This phenomenon has brought about, as well as a change of the
competitive structures, a general lowering of the market value of the fixed network
telephony services.
On the other hand, the drop in the fixed network voice segment of the Asian area
was influenced in particular by the negative trend of the Japanese market.
In the European area, as regards mobile network voice services, the partial
replacement of fixed with mobile network telephony and various market factors have
determined a significant increase in revenues, equal to 4.7%, in spite of the high level of
penetration that has by now been reached by mobile technology (especially in Western
European countries). The result, higher than expected, bears witness to how the traffic
shift has been such that it has more than made up for the pressures on the prices per
minute resulting from the play of competition. However in the near future, in spite of
the expectations of a sizable increase in traffic volume, the competitive pressure on
prices will cause a slowdown of the revenues growth rate (3.2% and 1.9% in 2006 and
2007, respectively).
In North America, the growth of mobile network voice has been even stronger
(+14% of the lines in one year), owing to the effect of the increase in the penetration
rate of mobile services with the population. Also significant is the growth in the Asian
area, where market prospects are connected with the trends of several strongly
developing countries such as China and India, which make up for the negative trend of
the mobile network voice segment of a market as mature as Japan’s which, however,
still accounts for a share higher than 38% of mobile network voice services in this
region.
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Figure 1.2. World telecommunications services sector, breakdown between voice and data
(revenues in billion euro)
Data
Voice
Source: IDC,
2006 |
* Forecasts
As for data services, the value of the world revenues equals 212 billion euro; the
growth, as important as it may be (equal to 12.8%), was lower than expected. The result
may be attributed to less accentuated growth levels than forecast, especially in the
European and North American markets.
In the fixed network data segment, the average revenues of the broadband
connections have suffered a definite drop in these geographic areas, with positive
effects on the consumers’ affluence and the dissemination of the service among families
and businesses. These observations are confirmed in the data shown in Figure 1.3.: at
the end of 2005, there were approximately 198 million broadband connections
throughout the world, with a growth of 33% over the previous year. Progress was
greater than expected in all geographic areas, but Europe stands out for its high growth
rate (45%) and the absolute level reached by broadband lines (61 million). The growth
forecasts for the years 2006 and 2007 indicate that Europe’s share of the total broadband
connections will continue to grow and will pass, by the end of 2007, the 30% mark.
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Figure 1.3. Broadband connections in the world (millions of lines)
IDC, 2006 |
* Forecasts
Source:
With reference to the distribution of the broadband connections among the
various technological platforms, no variations are seen compared to the past years:
xDSL is the dominant technology in all geographic areas, with the exception of the
United States, where cabled lines still account for the largest segment (more than half of
all connections). In this regard, it is important to stress how all the chief world fixed
telecommunications operators that offer Internet connectivity services by means of
xDSL platforms are investing in the transition to ADSL2 + VDSL technologies. The
latter support higher data transmission speeds (an essential element for the supply of
value-added services, most importantly IPTV), which require a high transmission band
availability.
On the other hand, fibre optics connections occupy a market niche. In
expectation, as has already been said, of an increasingly greater need for transmission
capacity for providing value-added services, some operators (which up to now had been
focusing only on xDSL) are evaluating the possibility of investing in this technology
also. Nevertheless, given the costs entailed in laying the infrastructure (excavations and
administrative costs), it is probable that any initiatives will be limited to newly built
areas, or to metropolitan areas with high population densities. However, even in the
latter case, it is probable that, for cost reasons, the final connections (up to the users’
homes) will be made using copper connections.
Lastly, an even more marginal role is played by the other types of transmission
technologies such as satellite, “Wi-Fi”, and “WiMAX”.
Figure 1.4. shows the dissemination of the sites equipped with hot spots that
permit high-speed wireless connections.
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Figure 1.4. Hot spots in the world (thousands)
Source: IDC, 2006 | * Forecasts
other countries
Asia/Pacific
North America
Europe
The data show a composite reality, differentiated from region to region. In
Western Europe the impetus for the dissemination and use of hot spot connectivity
services mainly comes from the mobile operators that have put on the market “data
cards” that envisage the combined access of various wireless technologies such as
GPRS, UMTS, and Wi-Fi. An exception is British Telecom, which with its Wi-Fi
Openzone network, offers the greatest hot spot coverage in Europe. On the other hand,
in the United States, various operators are working on the creation of so-called “mesh”
networks which make it possible to create, at a limited cost, extensive Wi-Fi networks,
thus broadening the territorial coverage of the service.
In mobile telecommunications, the growth of data services is strong, and
decidedly greater than the fixed network growth. In fact, the value of the mobile
network data services has exceeded 65 billion euro, with an increase of 21% in the past
year. The main cause for this progress can be found in the launch of the third generation
(3G) services, although as of today this launch has not generated the expected revenue
flow. Throughout 2005, the emphasis on innovative services (such as the possibility to
download music onto a terminal and watch streaming audiovisual content) was
undoubtedly greater; however, the penetration of the terminals that enable the use of the
innovative services is still low. The growth prospects of the innovative services segment
are connected with the launch and development of the commercial initiatives connected
with the 3G services (in North America the service has just been launched, whereas in
China its introduction is planned for late 2008).
Figure 1.5. summarizes some of the trends described up to this point: the
increase in the revenues deriving from the mobile network services will be the factor
that will guide the growth of the entire telecommunications services sector for the
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coming years; fixed network services will continue to form the main market component,
but their share will drop from the 57% of late 2004 to 53% in late 2007.
Figure 1.5. World telecommunications services sector, breakdown between fixed and
mobile (revenues in billion euro)
Source: IDC, 2006 | * Forecasts
Mobile
Fixed
North America, fixed network services
The US fixed telecommunications market has been characterized by the
following structural trends:
• the drop in revenues deriving from voice traffic because of market
competition, including, in particular, that of Voice-over-Internet Protocol
(VoIP) services;
• the lively competitive process in the broadband offerings owing to the
presence of cable operators;
• the growing integration between fixed and mobile communication services;
• the convergence between the audiovisual and the telecommunications
sectors.
In this framework, the operators have decided to reposition themselves on the
market also thanks to merger & acquisition operations. In 2005 the acquisition of
AT&T by SBC was completed, followed by the announcement of the AT&T –
BellSouth merger in March 2006. Following the operation, AT&T will arrive at a
market capitalization of approximately 170 billion dollars, surpassing that of Vodafone
and Verizon, and a turnover of around 130 billion dollars. Moreover, AT&T will
acquire 40% of Cingular, a mobile operator, permitting the preparation of integrated
fixed-mobile offerings and the access to BellSouth’s business customers located in the
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nine regions where it has concentrated its activities and fibre infrastructure. With the
merger between AT&T and BellSouth, only three of the seven companies coming from
the 1984 break-up of AT&T remain: the new AT&T, Qwest, and Verizon.
The merger between AT&T and BellSouth and the earlier one between AT&T
and SBC are just two of a series of operations which have resigned the competitive
panorama of the US fixed market over the past three years. With regard to this, worthy
of mention is the acquisition, concluded in January of this year, of the fixed network
operator MCI by Verizon (an operation of a value of approximately 8.5 billion dollars).
As was mentioned previously, one of the causes of the consolidation process
taking place in recent years is the change in the market conditions and, in particular, in
the decrease in the revenues of the traditional services of telecommunications operators,
first and foremost fixed network voice services. The reduction of this component
(Figure 1.6.) has become a structural phenomenon of the US market (as well as of other
“regional markets”), which has been contributed to by the lively competition among the
operators, the extensive dissemination of package offerings which have reduced the
value of the price-per-minute traffic and the partial shift of the traffic from the fixed to
the mobile network, determined by the growing penetration of mobile services.
Figure 1.6. North America: fixed network services market
(revenues in billion euro)
Source: IDC, 2006 | * Forecasts
Data
Voice
The sizable decrease of this market segment (-4.1% in one year), not
counterbalanced by an increase in the data services revenues, is the cause of the drop in
the total value of the North American fixed network services market.
In the data services segment, the most significant phenomenon is the growth of
the revenues from Internet access services, which have benefited from the significant
results obtained on the front of the increase in broadband lines. The growth of the
broadband connections may be attributed to the migration of the dial-up users to
broadband types of connectivity, and only for a minimum part to consumers who are
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purchasing Internet access services for the first time. In this framework, in 2005,
broadband has surpassed dial-up as the Internet access technology of residential
customers: at year end, around 51% of all households connected to the Internet were
using broadband, a percentage that should reach 62% by the end of 2007.
Broadband development is taking place in North America and, in particular, in
the United States, in an extremely competitive context. On the one hand, there are cable
operators that can offer a large package of integrated communication services. Cable is
still the prevailing broadband Internet access technology (55% of all lines), but its share
seems bound to decrease constantly in the near future, dropping to 50% by the end of
2007. On the other hand, cable’s decrease is due to the presence of operators offering
copper-wire xDSL technology services. Thanks to aggressive commercial campaigns
(concerning, in particular, reductions of the monthly subscription fee for xDSL
connections), the fixed telecommunications companies are taking market shares away
from the cable operators. Moreover, many providers are updating their networks to
standards that permit faster and faster connection speeds: for example, SBC-AT&T,
within the framework of the project called “LightSpeed”, has decided to adopt the
VDSK2 standard, which permits, in symmetric mode, to reach band speeds from 20 to
100 Mbps.
Cable operators have responded to these policies by broadening their offering of
available content, rather than lowering the cost of the monthly fee. The range of services
offered has also been extended to the supply of mobile services. Falling within this
strategy is the agreement signed, in late 2005, by the cable operators Comcast, Cox,
Time Warner, and Advance/Newhouse with the mobile operator Sprint Nextel, for the
purpose of the creation of a joint venture for the development and sale of converging
services to end users. Thanks to this agreement, cable operators will be able to resell
Sprint Nextel’s mobile services to their customers and vice versa. The joint venture is
also focusing on the creation of new integrated services such as, for example, a single
voice mail box through which to have access to messages received both on the fixed
line and the mobile line, as well as the possibility for users to access cable TV content
over the mobile network and to program DVR (digital video recorder) recordings
directly through their cell phones.
The other aspect connected with the development of the convergence is that of
the initiatives of fixed telecommunication operators aiming to provide end users with
Internet Protocol video services.
Verizon has officially launched its Internet Protocol television service under the
name “Verizon FiOS TV”: it is provided through the fibre optics network which the
operator started creating in 2004. Up until the month of April of this year, the operator
had entered into franchisee agreements with several municipalities of Delaware, Florida,
Maryland, Massachusetts, California, New York, and Pennsylvania and, at the state
level, with Texas, Virginia, and Indiana, for a total of approximately 1.3 million
households reached by the broadband network. At the time of the launch, the television
offering comprised more than 300 channels (video and musical), 20 high-definition
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video channels, over 600 video-on-demand titles available, digital video recording
(DVR), and the interactive guide to the programmes.
AT&T-SBC is working on the abovementioned “Lightspeed” project, which
should make it possible to bring IPTV services to the users of 21 states by the end of
this year, for a coverage of 3 million households. The only AT&T video franchisee
agreement is the one with Texas, covering 21 municipalities in the Greater San Antonio
area, an area that is growing considerably thanks to the building of new residential
areas. Otherwise, AT&T can count on around 20 agreements previously entered into by
BellSouth (and by virtue of which BellSouth already offers several video services),
which may be used to accelerate the creation of “Lightspeed”. For those who are not
reached by the Lightspeed network, AT&T proposes a triple-play offering (telephony,
broadband access, and television offering) inclusive of xDSL (and VDSL2) technology
access and satellite television. In particular, the telecommunication operator used fibreto-the-premises
(FTTP) technology to connect the new homes and apartment buildings,
and fibre-to-the-nodes (FTTN) and xDSL/VDSL2 technology (for the final connection
section) in existing homes. It is a solution that entails lower investments than those
made by Verizon, which has decided, instead, to use fibre optics to reach end users
directly.
North America, mobile network services
The year 2005 brought important results on the front of the North American
mobile market, in terms of both subscribers (203.9 million, equal to a 14% increase over
the previous year) and revenues: the total market value (Figure 1.7.) has arrived at
approximately 100 billion euro (+10.3% in one year).
Figure 1.7. North America: mobile network services market, breakdown between voice
and data (revenues in billion euro)
Source: IDC, 2006 | * Forecasts
Data
Voice
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One of the main factors that have characterized the market during the past year
is the decrease in average revenue per user (ARPU) deriving from voice services,
which, in spite of the increase in users expected for the coming years, will translate,
starting in 2009, into an erosion of total voice revenues.
This phenomenon is due to the lively competitive process taking place in this
region, to which the presence of the mobile virtual network operators (MVNOs) active
on the US market has contributed. During 2005, new MVNOs such as ESPN, Movida,
and Amp’d Mobile started their commercial activity; it is expected for others to follow
suit in 2006. The MVNOs focus mainly on the exploitation of market niches, not
adequately served by the main operators which, instead, traditionally pursue strategies
aiming to expand their user bases as much as possible, differentiating their offerings
almost exclusively through their rate plans. A significant example is Movida, which
targets the Hispanic community resident in the United States, offering not only services
such as Spanish-language customer care, but also specific content addressing
community members. Another example of an MVNO recently launched in the United
States is Helio, which used the Verizon Wireless and Sprint networks, and which is the
result of a joint venture between the Korean SK Telecom and Earthlink. This mobile
virtual operator has concentrated its efforts on the supply of multimedia services such as
the MySpace community services, with the possibility for users to send their photos
online (on the MySpace pages) directly from the mobile terminal and to share video
messages.
With a service penetration level that has by now reached 70% of the population,
operators are seeking to arrive at those segments that still have development margins.
Thus it is probably that even infrastructured mobile operators will tend to customize
their services more and more in order to meet the needs of the single market segments.
The mobile market segment characterized by the greatest growth prospects is
that of value-added mobile services, which registered a considerable increase in
revenues in 2005, driven mainly by entertainment type services. With regard to this,
worthy of mention is the launch in 2005 of third generation (3G) services, on dedicated
mobile terminals, first by Verizon Wireless (VCAST service), and later, in October
2005, by Sprint Nextel (Power Vision). In both cases, the launches followed the 3G
services on “data cards” already available and mainly targeting business customers. The
operators that use the CDMA/EV-DO standards (Verizon and Sprint/Nextel) are thus at
an advantage over the operators that use the GSM/UMTS/HSDPA standards (Cingular
and T-Mobile), as far as the supply of 3G services is concerned, Nevertheless, right at
the end of 2005, Cingular announced the launch of its 3G services which, following the
path undertaken by the other operators, first concerned the data cards for portable
computers. These services were joined, during the first quarter of this year, by dedicated
3G terminals. As for the content offered, all the mobile operators working with 3G have
focused on news, movie trailers, sports, and TV series.
18

Also with reference to the offering of converging services, Verizon Wireless has
recently stated that next year it will launch mobile television services, complementary to
the 3G services, and provided by means of Qualcomm’s MediaFLO network.
MediaFLO is a technology used for the supply of television programmes to cell phones,
an alternative to DVB-H, specifically created for “multicast” content reception on
mobile terminals, and which envisages the use of the cell phone network for the return
channel. The service will be available on EV-DO cell phones that support the
MediaFLO technology. Qualcomm intends to develop a national MediaFLO network on
the 700 MHz band, investing 800 million dollars for its creation and subsequent
management. National coverage is ensured by the radio spectrum that Qualcomm
purchased on the occasion of a tender held two years ago; it then continued to purchase
additional spectrum to arrive at a national coverage by the service. Verizon will be the
first US mobile operator to develop services based on MediaFLO technology. On the
other hand, with regard to the alternative DVB-H standard, common especially in
Europe, the Crown Castle company is conducting experiments in Pennsylvania;
however, as of today, no commercial development plans have been announced for the
service.
If the residential segment (with the development of the 3G and mobile television
services) continues to be that most reached by the mobile network VAS, there are broad
development prospects (not only in terms of the number of subscribers, but also and
above all in terms of revenues) as far as business customers are concerned. As is the
case in the European market, the use of mobile network value-added services by
business customers is still limited by the presence of obstacles connected with the
complexity of implementation, within the company, of value-added mobile solutions.
For this reason, Cingular and Sprint Nextel have created special divisions to serve this
customer segment.
The wide growth margins of the mobile market are confirmed by the user
forecasts: at the end of 2005, in the US market, mobile services had 203.9 million
subscribers, a figure that should reach 240 million by the end of 2007. Calculated on the
total US population, the penetration of the service should thus grow from the current
71% to 82% in the coming year, and the highest growth rates are expected in the
business customer segment.
Lastly, with regard to the corporate structure of the mobile operators, as has been
pointed out previously, the mobile market has also been undergoing a profound
restructuring process. Last year the merger between Sprint and Nextel was completed,
after which the market appears characterized today by the presence of three major
national infrastructured mobile operators: Cingular, Verizon Wireless, and
Sprint/Nextel. As for the smaller operators, also in 2005, Alltel, a regional operator
(ranking sixth by market share) acquired Western Wireless, an operator ranking twelfth
in terms of number of subscribers. The competitive picture is completed, as has been
said, by the presence of mobile virtual operators.
19

Europe, fixed network services
The European fixed network services market (Figure 1.8.) has reached a value of
136 billion euro, with a 2.2% increase over 2004, a result of the decrease (-1.1%) in
voice services and the simultaneous increase (+10.3%) in data services.
As in the case of the other regional contexts, the reduction of the value of the
fixed network voice segment is by now a consolidated trend aided by the partial
replacement of the fixed with the mobile network (which determines a shift of traffic
flows toward fixed-mobile and mobile-mobile lines and the phasing out, in some cases,
of the fixed line), the migration of dial-up services to broadband Internet access
services, and the competition deriving, for example, from the VoIP and ADSL voice
services.
Figure 1.8. Europe: fixed network services market, breakdown between voice and data
(revenues in billion euro)
Source: IDC, 2006 | * Forecasts
Data
Voice
With regard to this latter point, the lines with IP and ADSL voice services have
gone, in Western European countries, from 2.5 million at the end of 2004 to 6 million a
year later, an increase of 140%. The growth may be attributed mainly to the offerings of
the alternative operators, which use the broadband lines to provide users with a voice
line, often enabling them to terminate their contracts with the incumbent operator. In
this competitive context, even various incumbent operators have launched offerings of
ADSL voice services that allow the user to obtain significant savings on calls.
The result of the competitive process in course has thus been the reduction of
prices and the broadening of the range of fixed network telephone services.
As for the broadband connections, growth has been particularly marked in the
European area. In particular, with regard to the Western European countries (Figure
20

1.9.), the total number of broadband lines reached, at the end of 2005, 57.4 million
(+44.2% in the last year).
Figure 1.9. Western Europe: broadband connections, breakdown by access technology
(millions of lines)
Source: IDC, 2006 | * Forecasts
Other
Cable
DSL
Fibre
In this case, also, the growth was aided, as has been said, by the lowering of the
average connection price thanks to the competition on the market.
In order to counterbalance the constant reduction of the average revenues
deriving from the voice traffic and broadband services, operators are investing in the
supply of value-added services to users. However, these services (fixed-mobile
integration and IPTV) require investments in the network, aiming to guarantee good
service quality. From the standpoint of the incumbent operators, the owners of local
networks distributed throughout the country, the possibility of providing users with
innovative services and the need to optimize the operating and maintenance costs of
their infrastructure are the main factors underlying the decision to make the transition
toward new generation networks based on the use of the Internet protocol. As for the
alternative carriers (OLOs – Other Licensed Operators), the evolution of the competitive
scenario requires the making of infrastructure investments (mainly in unbundling and/or
fibre optics networks), since there is a transition from a competition based on the mere
resale of the incumbent operator’s wholesale services, to one in which it is the OLO that
becomes the sole supplier of communication services and carry on the contractual
relationship with the end user.
Investments in the new generation networks have thus made possible the supply
in Europe of integrated fixed-mobile services by fixed network operators. The first
operator – moreover, not integrated – to offer a product permitting this type of
convergence is British Telecom, which launched the service known as BT Fusion in
mid-2005. It uses a cell phone specially provided by BT which is able to connect, using
21

Bluetooth technology, within a household, to a hub connected to a broadband line
provided by the carrier. This way, the calls to fixed network numbers made from the
cell phone under the hub’s coverage are carried on the BT broadband line. The calls to
mobile network numbers made within a household and out of the house are, on the other
hand, carried on the Vodafone mobile network (the mobile operator with which BT has
entered into an access agreement). The switch from one mode to the other takes place
seamlessly (the connection is not lost) thanks to the UMA technology incorporated in
the user’s telephone. By the end of the year it will be possible to use mobile phones that
will support a Wi-Fi connection to the hub: users will be able to benefit from
advantageous economic conditions for calls made under the coverage, not only of the
household hub, but of all the BT hot spots present nationwide (Openzone network) as
well.
As for the integrated operators, many have stated that they have plans for the
development of integrated fixed-mobile services; this is the case, for example, of
Telecom Italia, France Télécom, and Deutsche Telekom. However, not all operators
have chosen the Unlicensed Mobile Access (UMA) technology for their converging
services; for example, France Télécom and Deutsche Telekom have decided to use the
Session Initiation Protocol (SIP) which, combined with the Internet Multimedia
Subsystem (IMS), permits a greater versatility as far as the fixed-mobile convergence
and multi-device access (PC, cell phone, etc.) are concerned.
The second type of converging products concerns, as has been said, the
integration of telecommunication services (in this case fixed network) with audiovisual
content (the oft-mentioned IPTV). In this context, the already-existing offerings will be
joined, during the year, by those of British Telecom and Deutsche Telekom. The
German carrier (which had launched several years ago a portal of broadband content
accessible from television sets), will start up the service as soon as the new broadband
network is finished. This network will use Fibre-to-the-Curb and VDSL2 technology
(the latter is used to cover the last mile), and will make it possible to reach speeds of up
to 50 Mbps. By the end of the first half of the year, the network coverage should reach
around 10 cities and increase to 50 the following year. The total investment allocated by
the carrier is 3 billion euro.
On the other hand, British Telecom has just started experimenting the Internet
television service; its commercial launch is planned for autumn of this year. Among the
reasons leading the company to enter this market is the need to counter the offerings of
the cable operator (NTL) and satellite operator (BSkyB); the latter, after acquiring the
Easynet ISP in 2005 and installing (in unbundling mode) its infrastructure in the British
Telecom exchanges, is about to launch an offering of for-pay broadband audiovisual
content. British Telecom has thus stated that its IPTC offering will mainly target those
families that have not yet taken out a subscription for pay-TV services. The users will
have access to both the video services provided by thee carrier (including video on
demand) and the digital terrestrial broadcasts, which will be decoded directly by the settop
box.
22

The supply of these services has also fuelled a discussion over the need to invest
in access and transport infrastructure, in particular those in fibre optics. For example, in
early 2006 the Mayor of Paris stated the intention to call a tender in the coming months
for the creation of a fibre optics network to cover the city of Paris using Fibre-to-the-
Home (FTTH) technology. The decision follows the initiative launched in Amsterdam
that envisages the creation of a municipal fibre optics network reaching homes and
businesses.
In this context, France Télécom has stated that it wants to launch, in the coming
months, an experimentation of the FTTH technology that will involve several thousand
households in Paris and six cities in the Hauts de Seine area, for the purpose of meeting
the demand which is expected to grow in the coming years. Other French operators are
also implementing projects entailing the development of the fibre optics network;
among these are the start-up CiteFibre and the cable operator Noos.
Telefónica has also stated that it considers the ADSL+2 technology insufficient
for the supply of advanced services. The need to transmit high-definition content and
the simultaneous presence of various services that will use the broadband line at the
same time should, in fact, require better performing connections.
Although the transition toward new generation networks is a topic on the agenda
of all European incumbent operators, the emphasis placed on the subject by the
operators active in Eastern countries is much lower. This is because of the different
market context in which they operate, characterized by a lower investment capacity
(owing to the users’ lower spending possibilities and the lesser penetration of fixed
network communications), a share of revenues from voice services that is still very high
as compared to those of the more innovative services, and a limited number of
competing companies (and therefore lower incentives for making investments in new
areas). These factors also affect the offerings of integrated services. As things stand
today, only two operators are presenting offerings to consumers of the triple-play type:
the Slovenian operator Slovenije and the Estonian carrier Elion.
Another front on which numerous product innovations are being introduced is
that of the network connections within a specific environment (such as a household or
office). There are various operators that are proposing to their users products that
function as routers and modems, making it possible to connect a series of terminals to
the broadband line: from computers to telephones, to consumer electronics devices. The
purpose is to enable the customers, both residential and business, to make use of an
increasingly broad range of additional services through broadband connections, in order
to increase interest in such connections.
Another topic concerning broadband which has attracted the interest of the
sector operators and Authorities concerns the diffusion of WiMAX technology; this
transmission technology makes it possible to reach, in wireless mode, average
connection speeds of around 8-10 Mbps (up to a theoretical maximum of 75 Mbps) over
an area that extends for up to about 50 km. There are numerous experiments being
23

conducted in European countries; in some, licenses have already been granted (or will
be shortly) for providing services using this transmission technology.
In the United Kingdom, the sector Authority OFCOM has assigned two WiMAX
licences to Pipex and PCCW, which intend to use them in the country’s main urban
centres, while BT is experimenting with the technology using “unlicensed” band,
therefore not protected from interference.
In France, Arcep has initiated the procedure for the tender that will assign two
licenses on the 3.4-3.6 GHz band in each of the 22 regions of metropolitan France.
Forty-five candidacies have been presented, including those of France Télécom, Bolloré
Telecom, and SFR in a consortium with Neuf Cegetel and Canal Plus, as well as those
of the consortiums involving AdP (Paris Airports), RATP (public transport), Autoroutes
Paris-Rhone, and the Regional Councils of various regions (Burgundy, Aquitaine,
Normandy, and Brittany). The licenses will be assigned through a tender (“beauty
contest”) whose parameters will be the geographic coverage of the network, thee
capacity to create competition, and the financial value of the project. The publication of
the tender results is expected for early July of this year. WiMAX offerings could,
however, be launched before this date by the alternative operator Free (Iliad group),
which has a national license, obtained following the acquisition of Altitude Telecom in
2005.
In Germany, the operator DBD (Deutsche Breitband Dienste) and the mobile
operator O2 launched, early in the year, a WiMAX/mobile converging commercial
offering: the offering, called “SmartDuo”, combines the broadband Internet access of
Wi-MAX with mobile telephony service. For the payment of a monthly fee, the user can
obtain a wireless broadband access that permits the use of the cell phone at rates similar
to those of the fixed network.
Commercial services have also been launched in Spain, Austria, and Holland. In
Italy, however, the service is still in the experimentation phase (cf. paragraph 1.2.1.).
Lastly, it can be seen that the attention of telecommunication operators is
focused on the supply of voice services, such as hosted voice services (which permit
businesses to save on the purchase of switchboards since the service is managed entirely
by the incumbent operator) and applications such as unified messaging and services that
enable the user to be independent from the access device and to use the services that
interest him through the modes he deems most suitable at any given time.
The potentials deriving from the use of the new generation networks, for
purposes other than simple data transmission and Internet connectivity, create, among
businesses, a demand for information technology (IT) solutions and increasingly more
integrated telecommunications. The businesses seek, in their choice of
telecommunication operators, suppliers not only of telecommunication products and
services, but also of actual integrated solutions that enable them to optimize the use of
their infrastructure and cut costs at the same time. To meet these needs,
telecommunication operators have considerably expanded the range of IT services
24

offered. In particular, an increasingly larger number of operators are equipping
themselves to provide their customers with the so-called “managed services”, within
which the components connected with the network (traditionally the core business of
telecommunication operators) are only the first level of the services provided, and they
are joined by the providing of additional services of various kinds.
The convergence is thus determining a diversification of the telecommunication
operators’ activity and the consideration of commercial strategies aiming for the
launching of offerings of services with multimedia content and IT solutions mainly
addressing business customers.
Europe, mobile network services
The mobile network services market in Europe (Figure 1.10.) reached 113
billion euro in 2005 (+6.2% over 2004), the result of a 14.3% growth of the data
component and a more limited increase, 4.7%, of the voice segment. Thus the weight of
the data component increased, rising from 15.2% to 16.3% of the total, and is bound to
reach a percentage of 20% in 2007.
Figure 1.10. Europe: mobile network services market, breakdown between voice and data
(revenues in billion euro)
Source: IDC, 2006 | * Forecasts
Data
Voice
An initial aspect of the changed market context concerns the preparation of
mobile operators’ offerings aiming to stimulate the phenomenon of an end users’
consumption shift from fixed to mobile voice products. For example, in Germany, O2
offers a service, called Genion, that allows users to make, within their own homes, calls
to fixed network numbers at very convenient prices. The Vodafone At Home Mobile
25

service offers, for the payment of a monthly subscription fee, a packet of minutes for
calls to national fixed network numbers, made from within a radius of two kilometres
from the user’s home. Calls made from outside that area are, on the other hand,
calculated according to the user’s normal telephone rate plan. Lastly, there is the
possibility for customers to obtain a fixed network number where they can be reached,
which enables the caller to benefit from more convenient rates that those applied to calls
to the mobile network. In this case, the users, thanks to number portability, can give up
their fixed line and keep the fixed number to be reached on their mobile phones. At the
start of the year, T-Mobile launched a service called Mobile@home which is very
similar to the one offered by Vodafone; at the end of the first quarter, over 500,000
users had already subscribed to the service.
Similarly to what is happening in fixed telecommunications, faced with a
decrease in the average revenues deriving from the voice segment – owing to the lively
competitive process that has led to a reduction of the voice service prices and therefore
to a further increase in the dissemination of the service (in Western Europe alone the
total number of mobile lines has exceeded 338 million, a value that is decidedly higher
than that of the United States) – mobile operators are introducing significant
innovations that concern the data component, which presents very high margins.
In this regard, it is necessary to report the important results achieved by the
dissemination in Europe of the third-generation mobile service using UMTS
technology: at year end there were approximately 21 million UMTS lines activated in
Western European countries.
The transition to third-generation networks has improved the users’ experience
with regard to the use of mobile value-added services. Nevertheless, as of today, no real
“killer applications” connected with the use of this technology have emerged.
Among the services provided using the 3G networks which have received the
greatest attention from users, worthy of note are the possibility to download whole
songs onto a cell phone and to enjoy video and television services. For this purpose, the
operators have formed alliances with the content providers, including record companies
and television broadcasters. By way of example, there is the agreement recently signed
in the United Kingdom by Vodafone and BSkyB, which enables the mobile operator’s
UMTS users to view around 20 of the satellite operator’s pay-TV channels.
Nevertheless, the use of the third-generation network, for the purpose of
providing video services, is rather expensive for the operator (in terms of bandwidth
occupation), and proves inefficient and unsuitable, from the network architecture
standpoint, for providing the service to a large number of users. For this reason, the
mobile operators are investing in the experimentation of other technologies for
providing the service.
In European countries the standard being experimented the most is DVB-H. The
first experiment, already finished, was conducted in Finland, where it involved mobile
operators, equipment manufacturers, television broadcasters (Digita, Elisa, MTV,
26

Nelonen, Nokia, TeliaSonera, and YLE) and 500 users of the city of Helsinki. Digita
won the first license assigned b the Ministry of Transportation and Communications for
the commercial launch of mobile television services using the DVB-H standard.
In Spain, two experiments (also conducted on the DVB-H technology) have
been concluded; they concerned the areas of Madrid, Barcelona, and Seville, and
involved numerous communication companies (Abertis Telecom, Nokia, Telefónica
Móviles, Antena 3, Sogecable, Tele 5, RTVE, Telemadrid, TV de Catalunya, Vodafone
España, Net TV, RTVA, RTVV, and Veo TV).
In the United Kingdom, O2, Arqiva, Nokia, BBC, ITV, Channel 4, Five TV,
Turner Broadcasting, Shorts International, Discovery, Eurosport, MTV, and BSkyB
started an experiment in Oxford whose final results will be announced in 2006.
In France, the Higher Council of the Audiovisual authorized four experiments in
the Paris area: three of the four authorized consortiums will use the DVB-H standard,
while one will use the Korean Terrestrial Digital Multimedia Broadcasting (T-DMB)
standard.
Lastly, television and radio service experiments based on the DVB-H standard
are under way in Holland, with the involvement of the operators KPN, Digitenne,
Nozema Services, and TNO.
Another technology, which has recently been tested for the supply of television
services to mobile users, is the Digital Audio Broadcasting Internet Protocol (DAB-IP).
In 2005 British Telecom and Virgin Mobile tried this standard on around 1,000 users, to
whom a packet of television and radio channels was proposed.
Qualcomm and the satellite pay-TV operator BSkyB have signed a letter of
intent for the carrying out, in Great Britain, of experiments on the MediaFLO
technology, which is used, as we have already seen, in the United States. The start-up is
planned for the summer of this year, and will involve a selection of BSkyB channels
that will be made available on several terminals provided by Qualcomm.
Also from the standpoint of the supply of value-added services on mobile
terminals, portals have been the main instrument through which operators have carried
such services. Thanks to the portal, the mobile operator does not limit itself simply to
providing the infrastructure through which the content arrives to the end users, but it
creates actual environments in which the user finds a rich selection of quality
audiovisual contents and services which are optimized for reception on the terminal.
Until now, most of the operators’ portals have fallen within the category of the
so-called “walled gardens”, the term used to indicate the control exercised by the
operator in the users’ enjoyment of the value-added mobile contents and services. The
operators that use “walled garden” portals implement policies aiming to discourage the
free enjoyment of content outside their own mobile portal, by applying, for example,
higher rates for navigation on sires not included in their portal, or by making it
complicated for users to reach other sites outside of it.
27

Nevertheless, an open model of cell phone Internet navigation is emerging with
ever-increasing strength, garnering success with end users, and appearing increasingly
compliant with the standards and rules safeguarding competition. By way of example, it
is possible to mention the initiative of the German operator T-Mobile called “web ’n
walk”: thanks to a special mobile phone, or by downloading a free application
programme provided by the operator, the user received Internet access that enables him
to visualize the page contents in a way very similar to that of a browser on a personal
computer screen. The first page of the service is the homepage of Google, the operator
with which T-Mobile has formed an alliance. The decision to provide its users with a
service that, in part, offers experiences, right from the first page, which are already
familiar to the user accustomed to navigating with his PC, seems to indicate the
operator’s desire to overcome the walled garden approach. Even Vodafine has indicated
its intention to make access to content outside of its own portal easier.
The adoption of an open approach seems to have been influenced by
considerations connected with both the greater availability of content accessible by the
mobile device user, and the presence of networks (UMTS and, eventually, HSDPA) that
allow a better enjoyment of online audiovisual content.
With regard to the business segment, innovation has been concentrated on the
supply of value-added services on mobile networks, including mobile access to business
applications. A value-added service on which mobile operators seem to want to focus
their attention is mobile mail access. The “Blackberry” solution, which first dominated
the market of push-mail solutions (which permit the user to automatically receive
messages on his mobile terminal without having to request the service time by time),
has been joined by other solutions in the portfolio of offerings from mobile operators.
In this situation of competition over prices of traditional services and the
offering of new products and services, the competition structure of the European mobile
market has been changed by the carrying out of numerous amalgamation operations.
Among these, worthy of mention are:
• the acquisition of the mobile operator O2 – active in the United Kingdom,
Ireland, and Germany – by the Spanish carrier Telefónica; the operation
received the go-ahead from the European Commission, which nevertheless
ordered Telefónica to leave the Freemove alliance;
• the purchase of the Austrian mobile operator Tele.ring by the German
operator T-Mobile;
• the operation with which Norwegian carrier Telenor bought out Vodafone
Sweden;
• the acquisition of 80% of Amena, a Spanish mobile operator, by the French
incumbent operator France Télécom, which was already present in Spain
with a fixed voice and broadband offering;
28

• the purchase of Meteor, an Irish mobile operator, by the incumbent operator
Eircom, which permits the latter to provide, as the sole operator in Ireland,
integrated fixed-mobile services.
Lastly, the competitive picture of the European mobile market is completed by
the presence of mobile virtual network operators (MVNOs), operators lacking their own
network, which provide mobile communication services by using he networks of
infrastructured operators. In the early part of the year, Spain was added to the list of
European countries in which the MVNO model is present. In fact, the regulatory
Authority (CMT) decided to order the country’s mobile operators (Telefónica Móviles,
Vodafone, and Amena) to allow access to their networks by such operators. The
decision came after an examination of the domestic market by the CMT, which found
the presence on the Spanish market of retail prices above the European average, and a
collective dominance by the three mobile operators.
There are two main categories of MVNOs currently active in Europe: fixed
network operators that use the MVNO model to add mobile telephony to their offering
of telephone services (such as Tele2 and BT), or companies active in other sectors with
brand names well-known to consumers (such as Bertelsmann, Virgin, Vivendi
Universal, Ryan Air, WalMart, Ikea, and Carphone Warehouse), which specialize in the
offering of mobile services to certain customer segments. The total number of virtual
operators active in Europe is over one hundred.
With regard to the offering of mobile services by virtual operators, it is
interesting to mention the French case. In France, the launch of these services took place
in 2004, with the MVNO Debitel. More recently, in April of this year, a new virtual
operator, Neuf Cegetel, which uses the network of the SFR mobile operator, made its
entrance on the scene. Thanks to this agreement and to its presence on the fixed and
broadband markets, today the operator is able to offer its customers a quadruple-play
offering (fixed and mobile telephony, broadband Internet, and television).
This offering followed, in chronological order, the launch of another MVNO, the
result of a joint venture between Virgin and Carphone Warehouse. Virgin Mobile
France, which uses the Orange network, proposes an offering that focuses on a specific
user target: youngsters under 25 years of age. The offering focuses on the possibility,
for those who subscribe to the operator for one year, to send unlimited text messages to
the users of all other operators.
The MVNO model is not, however, the only example of cooperation between a
well-known brand and a mobile operator. Worthy of mention in this regard is the
licensing agreement signed, also in France, by Bouygues Telecom (integrated
telecommunication carrier) and the television broadcaster TF1, both branches of the
Bouygues group. The TF1 Mobile service will use, on the one hand, the mobile
operator’s infrastructure and technical services and, on the other, TF1’s content and
brand name. The service will compete with Orange’s M6 Mobile, the result of an
alliance between the mobile operator Orange and the M6-RTL television group. TF1
will offer its users a multimedia portal, “i-mode”, which will group together a selection
29

of content for cell phones (from some of the broadcaster’s TV shows to content for
customizing terminals).
In conclusion, it may be stated that the birth of the virtual operators would seem
to produce several benefits for end users – in terms both of meeting the needs of several
specific mobile user niches, and of strengthening the competitive pressure on the prices
of traditional services (voice and messaging) – thus enriching the competitive context.
This is, for example, the effect that has been obtained in the Low Countries,
where the telecommunications operator KPN, in order to compete with the offerings of
the MVNOs, has introduced a low-cost service under the name Simyo. The service
offers discounted rates for voice calls and text messages. The Simyo SIMs can only be
purchased online; the service intends to target young users, who present a limited
average expenditure in mobile services.
Asia/Pacific, fixed network services
The fixed network telecommunication services market in the Asia/Pacific area
(Figure 1.11.) has reached a value of 116 billion euro, with a 4.4% growth over the
previous year.
Figure 1.11. Asia/Pacific: fixed network services market, breakdown between voice and
data (revenues in billion euro)
Source: IDC, 2006 | * Forecasts
Data
Voice
Similarly to what has taken place in the other regional contexts, in this area, also,
the fixed network voice segment has registered a decrease, because of the partial
shifting of the calls from the fixed to the mobile network and the growth of the revenues
deriving from the VoIP services. The People’s Republic of China, in particular, is
30

confirmed as the leading country in terms of revenues from VoIP services, with most of
the revenues deriving from long-distance calls.
The decrease in the revenues from traditional voice services has been
particularly evident in the Japanese market. In this country, the competitive context has
changed following a series of amalgamation operations, among which worthy of
mention is the purchase of the entire share capital of Japan Telecom by Softbank, and
the merger between KDDI and PoweredCom. Following these operations, the Japanese
domestic fixed network services market appears to be dominated by the presence of
three major groups: NTT, Softbank, and KDDI.
In the data transmission segment, there is a continuation of the decrease in the
revenues from traditional data services, countered by the growth of the more innovative
sectors (transmission on IP networks). As a whole, the segment grew by over 16% in
one year.
In particular, the broadband Internet access services grew at a very high pace: in
Japan the growth of broadband connections equalled 21%, for a total of 23 million
connections by year end. The services based on fibre-to-the-home technology registered
an extremely high growth; at the present time such connections account for about 20%
of the total broadband accesses, a percentage that is bound to increase sensibly in the
coming years. In any case, xDSL is the main access technology, with a share of 65% of
the total broadband lines.
As for the other countries of the area, the national markets that registered the
highest growth rates were the Indian and Thai markets. The largest market overall is
China, with 32 broadband connections (a 34% growth in one year). This dimension
opens important prospects for the development of value-added services, such as IPTV.
With regard to this, worthy of mention is the commercial launch by the SMG group of
the first Internet Protocol television service, in Shanghai in late 2005. The television
operator does not have an IP distribution network; therefore the group relied on two
carries, China Telecom and China Netcom, for the supply of the service. SMG provides
the license obtained from the regulatory Authority and its audiovisual content, while the
other two telecommunication operators provide the broadband connectivity services and
bill the end users.
Asia/Pacific, mobile network services
Also with reference to the Asia/Pacific area, the mobile network services market
(Figure 1.12) has registered a significant growth (+9.4%) in the past year, reaching a
total value of 143 billion euro. This trend is the result of the increase of the voice
segment (6.1%) and the strong expansion of the revenues from data services (22.6%).
31

Figure 1.12. Asia/Pacific: mobile network services market, breakdown between voice and
data (revenues in billion euro)
Source: IDC, 2006 | * Forecasts
Data
Voice
There are various countries of the area in which third-generation services have
been launched: among these, the main ones, alongside Japan, are Honk Kong, South
Korea, Australia, Singapore, and Malaysia. As for China, after a series of
postponements by the regulatory Authorities, it is planned for at least one license for the
supply of 3G services to be assigned by the end of the year. Such services should be
launched by the end of 2008, the year of the Olympic Games in China.
The availability of 3G services has, nevertheless, not yet had a significant impact
on the revenues from data services, which have grown as a result of the dissemination
of the services connected with the downloading of music and film clips. The low
dissemination of the third-generation services may be explained by the limited spending
capacity of the users (they are, in fact, very common only in countries, like Japan, that
have reached a high level of per capita income), as well as by the fact that the operators’
attention has been focused mainly on savings on voice calls rather than on the
introduction of value-added services.
An exception in this panorama is South Korea. In fact, this country stands out
for its use of multimedia content. In 2005 the mobile operator SK Telecom and TU
Media introduced a mobile television service that uses the satellite version of DMB
(Digital Multimedia Broadcasting) technology, based on the European Eureka 147
Digital Audio Broadcast (DAB) standard.
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1.1.2. Audiovisuals
The world television services sector
In late 2005, the world television services sector (Figure 1.13.) reached a total
value of around 235 billion euro, a 4.6% increase over the previous year.
Figure 1.13. The world television services sector (revenues in billion euro)
Source: IDATE
Africa/Middle
East
Latin America
Asia/Pacific
Europe
North America
As for the geographic areas, no substantial changes are registered. The North
American area confirms its leading position with around 44% of the resources, followed
by Europe, whose share (28.8%) decreases slightly.
Advertising is still the main source of financing, but the greatest growth in
percentage terms is registered with reference to the revenues from the pay-TV services.
The change in the distribution of the financing sources reflects a structural change of the
sector.
In fact, the digitalization of the networks enables the distribution of a
multiplicity of contents over a wide range of platforms: terrestrial (fixed and mobile),
satellite, cable (and fibre optics), and telephone network (copper and xDSL
technologies). This process of the gaining of ground by multichannel platforms has been
altering, for some years now, the competitive balances of the sector, determining a
greater fragmentation of the television viewing audience, with effects, in particular, on
the domestic television advertising collection markets.
Digitalization is, first of all, present in the traditional pay-TV networks: satellite
and cable, in which the operators are proceeding with renewed vigour in the transition
of their infrastructure to digital technology. It is also starting to gain ground in terrestrial
33

television, with the process of transition from analogue technology, concurrent with the
launching on the market of Internet Protocol television offerings (IPTV) by the fixed
telecommunications operators (cf. paragraph 1.1.1.).
The multiplication of the technological platforms for the dissemination of
television services is also connected with the greater availability of content on the
market. In particular, the content providers, which once viewed the new distribution
platforms with a certain diffidence (for example, the record companies, but also the
movie majors, which have always feared that the availability online of their contents
might entail numerous piracy risks), are starting to consider them as an opportunity for
their activities.
Furthermore, the launch of the PVR (Personal Video Recording) and VoD
(Video on Demand) services enable users to enjoy, on request, customized content,
unconstrained by the programme line-up logic of generalist television.
In short, the digitalization of the networks, with their resulting multiplication,
increase in channels, audience fragmentation, and new ways for viewers to enjoy
television content, tend to shrink the revenues deriving from generalist television,
producing the observed effects on the distribution of the sector’s financing sources.
The television market in the United States
In the United States, the satellite and cable platforms are the broadcast media of
choice to carry television services, in particular for pay TV. Suffice it to consider that, at
the end of 2005, there were around 96 million subscribers to cable and satellite services;
of these, 72% were cable users. As for digital subscribers, 56 million (a 12% increase
over the previous year) are distributed more or less equally between the two platforms.
With regard to the competitive structure, the cable platform is dominated by the
operator Comcast, followed, a number of points away, by Time Warner Cable; also
present are other operators such as Cox and Advance/Newhouse. On the other hand,
satellite digital is almost equally controlled by two companies: DIRECTTV and
Echostar, with a slight advantage of the former over the latter.
Cable and satellite operators have defined different competitive strategies,
focusing on the characteristics of their networks. As for the former, these have focused
on the offerings of integrated communication services (telephony, broadband Internet
access, and television). The expansion of the range is also concerning the mobile
services (quadruple-play offerings): worthy of note in this regard are the alreadymentioned
joint venture (cf. paragraph 1.1.1.) entered into by Comcast, Cox, Time
Warner and Advance/Newhouse, and the mobile operator Sprint Nextel, aiming for the
development and sale of converging services to users. The market strategies have also
concerned the switchover of the analogue users, who still represent 60% of the total
cable TV subscribers, to the digital platform. For this purpose the operators have
developed value-added services such as the digital video recorder (DVR) and video on
demand (VoD) in its various versions (by subscription or pay-per-view).
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On the other hand, satellite operators have focused on offerings that exploit the
almost complete digitalization of their subscriber base: the differentiation of the
television product has thus centred on the digital quality of the signal or on DVR
services. Moreover, the prices of the offerings of the satellite pay-TV services packages
have been lowered, also to compensate for the current difficulty, owing to technological
limits, of offering Video on Demand services. In this regard, VoD offerings are being
studied that would use hybrid set-top boxes connected to the broadband networks of
telecommunications operators.
As for the new media, worthy of note is the launch of the IPTV services, which
still account for a marginal share of the total pay-TV service subscribers: approximately
180,000 users at the end of 2005, totally attributable to the recent start-up of the Verizon
offering, which will be followed by that of AT&T (Lightspeed project, cf. paragraph
1.1.1.). In spite of the huge financial investments made by the telecommunication
operators, it is expected that in 2009 IPTV service subscribers will still be a minor
component of the total digital television subscribers: 6%, with around 5 million users,
Lastly, on the regulatory front, it is necessary to report the decision of the
Federal Communications Commission (FCC) not to appeal the sentence of the Court of
Appeals for the Third Circuit of Philadelphia, which, in 2004, had passed a negative
judgement against the new rules introduced by the FCC itself on the subject of
ownership of mass communication media. These rules would have eased the limits in
force on the ownership of television, radio, and newspapers, eliminating the ban against
possession by a single company of a newspaper and radio and television broadcasting
companies in the same geographic market.
The television sector in Western Europe
Last year the European television sector (Figure 1.14.) reached a total value of
approximately 80 billion euro, with a steady growth of 7.6%, higher than that registered
in 2004 (6%).
35

Figure 1.14. Europe: the television sector (revenues in billion euro)
Source: Italmedia Consulting
Advertising
Subscription fee
PPV subscriptions
The analysis of the distribution of the resources clearly shows the
abovementioned change taking place in the sector: on the one hand, the weight of
advertising is decreasing (from 46.5% in 2003 to 44.1% in 2005), which, however,
remains firm in its position as the main source of revenues, and that (23%) of state
financings (subscription fee); on the other, the share (32.8%) of the turnover from pay-
TV services (in all its forms: subscription, pay-per-view (PPV), and video on demand),
which represent the driving component in the sector’s growth, increases considerably
(+20% in one year).
The European pay-TV market is growing rapidly, with a total sales value of
more than 26 billion euro. The breakdown of the revenues shows a clear predominance
of the subscription sales (605%, of which 40% for basic packages and the remaining
20.5% for “premium” packages) and a significant, and growing, share of the pay-perview
product sales (32%); the percentage of the revenues from video on demand
services remains rather marginal (7.5%).
Considering the strong dependence of the advertising investments on the
economic cycle, the trend of the advertising market, albeit undergoing a continual
growth (+2.6% versus the +5.2% registered in 2004), has felt the effects of the
weakness that still characterizes the European economies. Also missing are major
events (such as sports events) that are capable of attracting advertising investments.
The slowdown of the advertising market growth has been perceived in all the
main European countries, with the exception of Spain, which has registered an increase
in advertising revenues of about10%.
36

The structure of the national television advertising collection markets is still
characterized by a considerable level of concentration, with the market share of the
main operator close to 50% (43% in Germany, 47% in the United Kingdom, 54% in
France, and 36% in Spain). Nevertheless, it appears that there is a structural change
taking place in the market, which inevitably translates into a process of deconcentration
of the advertising markets.
The availability of a plurality of digital platforms for content distribution and a
growing number of thematic channels that often manage to attract important user niches
(in particular from the standpoint of spending capacity) is, in fact, determining a
fragmentation of the television audience, with negative effects on the audience shares of
the generalist broadcasters of the chief television groups. The audience share of digital
platforms is growing significantly in all European countries: for example, in the past
five years, in the United Kingdom the shares of the multichannel television have grown
by ten percentage points (from 19.6% to 29.6%), and in France the increase, although
moderate, has been just as significant, rising from 8.5% in 2001 to 12.1% in 2005.
The development of the platforms that are alternative to analogue television is
also confirmed in the data concerning the penetration of digital television among
European households. At the end of 2005, 55.6 million households in Western European
countries had digital television, equal to 33% of the total, versus a value of 27.6% the
previous year.
With regard to the single distribution platforms, as can be seen in Figure 1.15.,
satellite is still the predominant digital medium, but its percentage weight is decreasing
(from 58% in 2004 to 53% in 2005), to the benefit of the digital terrestrial platform (the
second platform, with almost 26%) and cable (20%). Internet Protocol television still
only accounts for 1.4% of the total, a percentage that appears nonetheless destined to
increase in the coming years.
Figure 1.15. Western Europe: breakdown of households with digital television, broken
down by platform (%)
Source: Italmedia Consulting
Satellite
DDT
IPTV
Cable
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In greater detail, it can be seen that the past year was characterized by a
considerable increase in the penetration of digital terrestrial television, which now has
more than 14 million users, compared to the 9 million of 2004. The broadcasters that
provide digital terrestrial content have enriched their offerings with pay-for content also
(in particular, sports events and movies), determining an increase in user demand for
content broadcast using this technology.
Cable operators, following the restructuring carried out over the past three years
and the consolidation process (particularly evident in Spain, Germany, France, and the
United Kingdom), which led to the establishment of a few major operators, have
invested in the transition of their users from analogue to digital technology, also thanks
to the offering of innovative services such as Video on Demand.
Satellite television has continued to gain subscribers thanks to the extreme
variety of the range of channels offered the public, capable of attracting even those user
niches that do not find sufficiently well-targeted offerings in the context of traditional
television platforms. The offerings have generally been enriched with the launch, in
Europe also, of the “personal video recording” service, which helps make the enjoyment
of television content more flexible.
Lastly, the start-up of numerous IPTV offerings by telecommunication
operators, both incumbent and alternative (OLO), together with the enrichment of the
existing proposals, has determined an appreciable growth in the number of users of
television services on the Internet, whose total approaches one million at the end of
2005; these are particularly concentrated in Italy, France, and Spain.
The competition among operators for the supply of television services has thus
become livelier and, in addition to determining a process of consolidation in the sector
as far as satellite and cable platforms are concerned, has led broadcasters, especially
those operating on traditional distribution media, to seek new content exploitation
opportunities.
In this regard, it is worthwhile to mention the experiments started by the British
television broadcaster BBC. In February of this year, the experimentation of the IMP
(Interactive Media Player) system ended. This system permits users to search for
content, television and radio programmes up to seven days after their airing, using a
search engine, and to download them onto their own computer. The service is protected
by a digital rights management system that prevents the copying and mastering of the
content and which ensures that, after seven days, the downloaded file will no longer be
viewable by the users. This way, the television broadcaster has started to experiment the
on-demand supply of its content; once the system is in full swing, the intention is to
offer the service in a pay-for version.
Also with regard to the distribution of content on the various broadcasting
platforms, it should be observed how the Community and national Authorities are acting
to regulate the modes and procedures. In particular, the aim is to avoid single operators
38

having the availability, on an exclusive basis and on all distribution platforms, of
particularly attractive content (in particular, football and newly released films), thus
hindering the development of the competitive process taking place among the media.
Apropos of this, the case of the sale of the “Premier League” rights for the 2007-
2010 period is significant. The European Commission intervened, ordering the English
first division league to sell the rights of the matches, breaking them down into six
packets, thereby prohibiting the exclusive acquisition of all the matches by just a single
supplier. The aim of the action is to increase the availability of the rights, and therefore
to help competition among the various technological platforms. At the end of the
auction, the rights were won in part by BSkyB (for a total of 92 games) and in part by
the Irish pay-TV broadcaster Setanta. BSkyB, which since 1992 had always won the
exclusive rights for the Premier League, thus had to enter into an agreement with the
Irish operator to enable its business and residential users to have access to all the
matches. Setanta also intends to make the matches available in pay-per-view mode on
the Freeview (digital terrestrial) and NTL (cable) platforms.
Lastly, it is necessary to remember the revision process in course with regard to
the “TV without Frontiers” directive by the European Commission (cf. paragraph 3.1.).
The purpose is to create a harmonised regulatory context that also contemplates the
most innovative content distribution modes, at present governed by other Community
directives, and which also takes into account the new forms of advertising that are
gaining ground. The directive must create a regulatory context that fosters innovation
and competition in the offering of television content, preserving the principle of
technological neutrality among the broadcasting platforms.
Technological platforms and competitive dynamics
Cable television
Competition between the cable and the satellite platforms is a phenomenon
which characterizes both the US and the European television sectors.
The past three years have been characterized by a sector restructuring process,
following the financial difficulties which several actors of the market had encountered.
In particular, in 2004, the operators had carried out numerous amalgamation operations;
these had involved the German and the French markets, countries in which the high
geographic fragmentation of the cable offerings had prevented the technology from
being a nationwide alternative to the other platforms (in particular satellite).
The consolidation process also continued into 2005. Among the most important
events, worthy of mention is the merger between the two British operators NTL and
Telewest. The operation gave rise to a single cable operator with a portfolio of around 5
million customers, 2.5 million of whom are subscribers to digital television services.
For the purpose of further expanding its package of communication services, the
operator has also invested in the acquisition of the mobile virtual operator Virgin
Mobile.
39

In Spain, the consolidation involved the operators Auna and Ono: thanks to the
purchase of Auna, Ono was able to expand its territorial coverage, reaching almost 40%
of the entire national territory. The operator can count on a total number of around 2.2
million residential customers, of whom around 800,000 also subscribe to a television
offering. Following the acquisition, Ono became the country’s main cable operator and
chief competitor of Telefónica in the Spanish broadband market.
In Germany a group of cable operators, Unity Media, has been formed, which
heads the companies Arena, iesy, ish, and Telecolombus.
As for the services offered, the cable operators have implemented a series of
initiatives enriching their content portfolios (and related distribution services). In Spain,
Ono has launched the Video on Demand service called OJO TV, which is available in
various regions and cities where the company is present, and in the coming year it will
be extended to the areas covered by the Auna network. Furthermore, an agreement just
signed will enable the cable operator to distribute, on its own pay-per-view platform,
some of the most famous TV series of the commercial broadcaster Tele 5. Subscribers
to the OJO TV service will have access to such content one week earlier than their
airing on regular television.
In Germany, Arena, a company of the Unity Media group, has acquired the
rights for the live broadcasts of the Bundesliga matches, once held by the satellite
operator Premiere.
Digital terrestrial television
The rapid increase in the number of users of digital terrestrial television (DTT)
is, as stated above, one of the most significant events among those characterizing the
recent evolution of the European television sector. This phenomenon has been fed, on
the one hand, by the growth of the platform’s penetration in countries where it is
already present (United Kingdom and Italy, in particular) and, on the other, the launch
of the service in France and Spain.
40

Figure 1.16. Western Europe: breakdown of households with DDT devices (%)
Source: Italmedia Consulting
Germany
Italy
United Kingdom
Spain
Holland
Sweden
Finland
Belgium
France
The European Commission has indicated 2012 as the date by which the switchoff
of analogue terrestrial broadcasts (and the transition to digital ones) should be
completed.
Germany should be the first European country to complete the transition: seven
regions out of the 8 “landers” already broadcast digital terrestrial programmes regularly.
The completion of the switch-off in the country (planned for 2006-2007) is also aided
by the poor penetration of the terrestrial platform (around 9%, compared to 50% for
cable and 41% for satellite).
As for the other European countries, most of them have indicated the 2010-2012
period as the switch-off date. In Italy the date is set by regulations to be the end of 2008
(cf. paragraph 1.2.6.).
With reference to the current diffusion of DTT in the single European countries
(Figure 1.16.), growth has been particularly accentuated in Italy where, at the end of
2005, the service’s users had passed the 4 million mark, a figure that puts Italy in
second place, in absolute terms, after the United Kingdom, and in third place as far as
the penetration into households is concerned. Aiding the development of the DDT
diffusion have been the availability of government grants for the purchase of MHP settop
boxes and the launching of pay-per-view services (in particular, the possibility to
purchase single matches of the Italian “A Series” football championship) by national
broadcasters Mediaset and La7 (cf. paragraph 1.2.2.).
41

Great Britain is the European country that boasts the highest number of DTT
service numbers, and which stands in second place, after Finland, in terms of service
penetration. According to OFCOM, at the end of 2005, there were around 6.5 million
households using Freeview as the sole digital platform. The growth of the digital
terrestrial technology has been the main component contributing to the increase in the
diffusion of digital television in the country. At year end, 17.5 million households
(around 70% of all households with television) had access to digital terrestrial services.
As for the services offered on DDT, it is worthwhile to remember the launch, by Top
Up TV (an operator who, in March 2004, had started up a pay channel service on the
Freeview platform), of a pay-per-view service in partnership with Setanta. The Top Up
TB offering comprises 11 channels and the possibility to purchase, in pay-per-view
mode, the matches of the Scottish Premier League, for which Setanta has acquired the
rights.
With regard to this, OFCOM has decided to eliminate the rules, set in 2002, that
limited the supply of pay television services on the Freeview platform. Following the
OFCOM decision, these services will be able to be supplied also on the remaining
multiplexes prepared for digital terrestrial television. The broadcasters ITV, BBC,
Channel 4, and Channel Five have also initiated an experiment, to last six months, of
the supply of high-definition programmes on the digital terrestrial platform. The date for
the switch-off is set for the year 2012.
In Spain, after the period following the failure of the for-pay platform Quiero
TV, the Government drafted a new plan for the development of digital terrestrial
television. The service was relaunched from the month of November of last year. At the
present time there are around twenty channels available free of charge and over one
million DTT set-top boxes installed. To these must be added another 1.3 million
households that receive digital terrestrial television broadcasts through the local cable
operators, and around 200,000 who watch them through Telefónica’s IPTV service.
Catalonia is the first region in which the switch-off will be made (in 2009), and it is
planned to be carried out nationwide by the end of 2010.
In Sweden, the digital terrestrial pay-TV operator Boxer has, as of the end of
March of this year, 57,000 subscribers. The country is getting ready to pass quickly over
to DTT broadcasts: in fact, the switch-off is planned for 2008. With regard to this, it
should be considered that some zones (Northern Smaland, Gästrikland, and Gotland) are
already completely digitalized.
In France, the DTT offering took off in March of last year; later, in the autumn,
the free offering was joined by several for-pay channels provided by the operator
Canal+, which launched two packages (a basic and a premium package). At present
there are around 1.7 million households that have the equipment necessary for receiving
the digital terrestrial signal. To the DTT set-top boxes purchased must be added those of
the users of the IPTV services which also permit reception of the digital terrestrial
programmes.
42

It is interesting to note that the French regulatory body CSA has recently decided
to call a tender for the experimentation of high-definition digital terrestrial television.
The programmes involved in the experimentation will be those currently available on
the platform (both free of charge and for pay). For this purpose the CSA has made
available a frequency for each of the zones involved in the experiments (Paris, Lyon,
and Marseilles).
In early April of this year, the digital terrestrial television offering was launched
in Denmark, comprising free channels and some for-pay channels. In light of the
country’s structural and topographic characteristics, it is expected for the delay with
which the offering was launched will soon be compensated for, and that the transition
will take place in a fairly short period of time.
In Ireland, the Minister of Communications is developing a plan for digital
terrestrial television. Experiments should start towards the middle of the month of
August.
Lastly, in Finland the Ministry of Communications announced, in late March of
this year, the intention to assign new licences for DTT. One of the networks has been
reserved for DVB-H cell phone television (for which the operator Digita has already
obtained a licence).
Satellite television
During the past year, the competitive panorama of the satellite offering has been
further consolidated. It should, in fact, be remembered that in recent years numerous
amalgamation operations had been examined by the Community and national antitrust
Authorities; they had concerned, in particular, the German, Italian, and Spanish markets.
In 2005, the merger took place between the two French satellite platforms Canal+ and
TPS, after which this market, also, will be characterized by the presence of a sole
satellite provider. With regard to this, it is important to note that among the chief
European countries (United Kingdom, France, Spain, Germany, and Italy), France was
the only one in which two independent operators were still operating. Because of the
presence of just one satellite provider, the greatest competitive pressure on these
markets generally comes from the offerings of cable operators, as well as from Internet
and digital terrestrial television proposals.
The operators active on the satellite platform, like the companies providing cable
services, have enriched their package of services offered to users. The differentiation
and enlargement of the product range have not just followed the traditional channel of
satellite television, i.e. the simultaneous offering of premium content and thematic
channels, but have also been translated into new competitive strategies.
For example, some operators have focused on mobile telephony as an instrument
for enhancing their names and creating customer loyalty among their users. Part of this
strategy is the launch, by BSkyB, of “Sky by Mobile”, the service for SkyDigital
subscribers that enables them, thanks to a special application programme downloaded
43

onto their cell phones, to have free access to videos and news, and to place bets. BSkyB
also offers, in collaboration with the mobile operator Vodafone, a package called “Sky
Mobile TV”, which provides UMTS users of the latter with access to around 20 for-pay
BSkyB channels.
Satellite television operators have also decided to exploit the opportunities
deriving from broadband, the penetration of which, as has been seen, continues to
growth at considerable rates (cf. paragraph 1.1.1.). The use of broadband, in
combination with the satellite infrastructure, enables the operator to add to its television
services elements of interactivity that are a strong point of the cable television offering
and IPTV offerings, permitting it to compete with the content broadcast on other
platforms.
In this regard, it is interesting to mention the British operator BSkyB which,
after purchasing the Internet Service Provider (ISP) Easynet (which covers around 20%
of the national territory through unbundling), has confirmed its intention to use the
network to offer, by the end of the year, telephone and video-on-demand services to end
users. Pending the launch of the service, BSkyB has also proposed the “Sky By
Broadband” offering, which enables users, using a special application programme
downloaded onto computer, to see movies, news, and sports videos. The service,
available free of charge to the subscribers of Sky Digital’s bouquet, uses Kontiki peerto-peer
(PTP) technology for the distribution of content on the Internet: a digital rights
management system that protects the content and ensures that it will no longer be
available once the licence expires (after 30 days).
Moreover, News Corp., the company controlling BSkyB, made other
acquisitions in the Internet sector. In fact, the company bought the Myspace.com site
and several small Internet operators specialized in the development of application
programmes that enable users to find online, create, and share digital content.
The German satellite operator Premiere is also assessing the opportunities
offered by broadband; by the end of the summer it will launch a platform that will
enable users to make use of advanced interactive services. This service exploits satellite
broadband and IP technologies through the use of a hybrid set-top box. Furthermore,
Premiere has launched a satellite-based VoD service (called “Premiere Direct Plus”)
that envisages the possibility for users to have access to up to 30 movies a week, which
are downloaded by the operator beforehand onto the PVR hard disk (with a total
capacity of 160 GB, of which half is reserved for the VoD service and the rest is at the
user’s disposal for his own recordings).
All the operators that run the satellite platforms are also working on offering
high-definition (HD) content. High definition is a technology for television content
reproduction that can be used in all digital platforms. Nevertheless, by virtue of the
technical characteristics of the platform and the availability of broadcasting
technologies that make it possible to optimize the use of the broadcasting band, high
definition is the current strong point of the satellite medium. Various European satellite
operators already started to broadcast high definition content in 2005. The service will
44

undergo further acceleration in 2006 on the occasion of the world football
championships to be played in Germany (an event that will be broadcast in 16:9
quality).
In particular, Premiere offers a complete high definition package, called
“Premiere HD”, which includes, among other content, movies, sports events, and
documentaries. In Italy, Sky launched a high definition service in May, on the occasion
of the European Champions League final, and will produce high definition broadcasts
for the world football championships, using DVB S2 technology and the MPEG4
compression standard. Once it is in full swing, the operator will provide high definition
channels dedicated to movies, sports, and entertainment in general. French satellite
operators are also very active on the high definition front: TPS has started to provide
some of its subscribers with special set-top boxes and already offers several channels in
the new format.
Internet Protocol Television (IPTV)
Last year was very important also for the diffusion, among European
households, of Internet Protocol television (IPTV) services. Within the framework of
the already-existing services, the range of content made available to users was
expanded, especially on the basis of agreements signed by the telecommunication
operators and movie majors concerning the offering of video-on-demand films. There
were also a number of new services launched during the year.
At the end of 2005, it is estimated that approximately 1 million households in
Europe had access to an IPTV offering.
As for Italy, the Fastweb offering (around 160,000 users at the end of 2005) was
joined by that of Telecom Italia, which should be followed, during the year, by Tiscali
and Wind (cf. paragraph 1.1.1.).
The French market is being confirmed as one of the most active in Europe:
approximately 500,000 users have already taken out subscriptions for Internet television
services. At the present time there are four IPTV offerings: three provided by alternative
operators (Free, Neuf Telecom, and Alice), and one (called “Maligne TV”) by the
incumbent operator France Télécom (FT). FT’s service is currently the principal one,
with around 200,000 subscribers (compared to the 69,000 of the previous year);
moreover, France Télécom will provide an offering of high definition programmes
starting in June, and Free has prepared a new set-top box that supports high definition
broadcasts and reception of digital terrestrial channels.
In Spain, the main IPTV offering is that of Telefónica, which has around
250,000 subscribers, who enjoy 50 television channels, 15 radio stations, and a VoD
service. The service covers 25% of Spanish households, a percentage that should rise to
50% in 2008. The offering of the incumbent operator has been joined by those of the
competitive operators Grupalia Internet (under the name “Superbanda.net”), Jazztel
(called “Jazztelia TV”), and France Télécom España which launched the “Wanadoo
45

TV” service in several cities (Madrid, Valencia, and Zaragoza) at the end of May. This
service comprises over 40 channels and a video-on-demand service; the set-top box
provided by the operator also makes it possible to receive digital terrestrial channels.
In the United Kingdom, this coming autumn British Telecom will launch an
Internet television service called “BT Vision”, which will also include VoD services
and the possibility to receive digital terrestrial channels. The service follows by a
number of years the launch of HomeChoice by the alternative operator Video Networks,
whose offering still has only 37,500 subscribers. On the other hand, the other British
IPTV operator, Kingston Communications, has ceased providing the service. The
offering had never succeeded in reaching more than 10,000 subscribers, and recently
this number had fallen to a few thousand.
In Germany, Deutsche Telekom will launch its IPTV service during the second
half of the year. This follows, in chronological order, the recent launch of “Alice Home
TV”, offered by the alternative operator Hansenet (Telecom Italia group) in Lübeck and
Hamburg, which comprises 100 television channels, a premium package, and a VoD
service.
As for Holland, an IPTV service was launched this year by KPN under the
“Mine” name. The service includes around 50 television channels, radio stations, and a
VoD service. The operator offers a PVR capable of storing up to 100 programming
hours.
Lastly, IPTV services are present in Belgium (offered by Belgacom with around
20,000 subscribers), Finland (Alcom, with 1,000 subscribers), and Sweden (TeliaSonera
and Bredbandsbolaget, for a total of around 10,000 subscribers), while experiments are
being conducted in Portugal (Novis).
Mobile television (DVB-H and other technologies)
Alongside Internet Protocol television, a great deal of attention is also being
attracted by the possibility of distributing television content by cell phone. In Europe
the standard being experimented the most is DVB-H. For a detailed description of the
experiments taking place in Europe and Italy and the marketing status of the services,
refer to paragraphs 1.1.1. (for the world’s offerings) and 1.2.1. (for the service in Italy).
46

1.2. ITALY
1.2.1. Telecommunications
In 2005 TLC services (figure 1.17.) recorded a 4.3% growth, a value twice as much as
the increase in Gross Domestic Product (totalling 2%); once again the sector’s
dynamism is confirmed, in spite of the unfavourable economic trend.
The overall market value is 36.1 billion euros, which is envisaged to reach 36.8 billion
(with a 2% increase) in 2006.
The analysis of the two sector’s components – fixed line services (including Internet
services) 1 from the one hand and those on mobile network on the other – bears out the
gap which characterizes the trend of the two segments: a substantial stability for fixed
services (+0.4%) and a considerable growth (+7.8%) for mobile services. Therefore, the
overtaking, which took place in 2003, of fixed lines services by mobile telephony
services becomes more evident. This gap is expected to grow more marked in the future.
Figure 1.17. Fixed and mobile services: Italian market dynamics (revenues, €
billion)
Fixed network excl. OLO DC Mobile network
Source: IDC, 2006 | * Forecasts
The main factors which characterized the sector in 2005 are as follows:
1
The figure on revenues on fixed network does not include the segment of dedicated circuits (DC) resold to alternative operators
(OLO).
47

• Increase in the operators’ combined offers for voice and broadband Internet
(both on PSTN network and VoIP);
• With the convergence of services and networks, operators are focusing their
attention more and more on fixed-to-mobile integrated offers;
• Increased focus on the offer of audiovisual contents through fixed (IP TV) and
mobile (DVB-H) broadband networks;
• Development of the competitive pressures on every market of the sector (fixed,
mobile and the Internet), with positive effects on consumers in terms of
reduction of prices of final services and introduction of product innovation;
• In the market of fixed line services, the decrease in revenues from voice grows
more marked as against the previous year due to the increased decline in
revenues from traffic connected with the ongoing lively competition process;
• The growth of the mobile services is due mainly to the revenues from valueadded
services (VAS) – both traditional (SMS and MMS) and above all
innovative (Internet access, downloading, streaming) whereas the increase in
revenues from voice services was affected by price competition;
• Users of UMTS mobile services are growing significantly. With the result that
Italy is the first country worldwide as to service spread;
• The Internet market is characterized by the growth - beyond all expectations - of
broadband connections due to the sharp reduction in broadband access prices.
Therefore, the reduction in prices of TLC services continues. This aspect is particularly
marked out if we compare the general indexes of consumer prices and of charges of a
basket of public utilities services 2 (figure 1.18.).
2
The basket takes into account charges applied in the following sectors: electricity, gas, telephony, mail, radio and television,
railway, water and urban transport.
48

Figure 2.4. Trend of consumer prices and public utilities charges (1990=100)
Telephony Services Consumer prices
Source: Data from the Ministry of Economy and Finance processed by AGCOM
In 2005 a further decrease in telephony prices (-0.6%) has been recorded against a
significant increase in consumer prices (+1.9%) and in particular in those of public
utility services (+4.8%). More in general, in over fifteen years (1990-2005), the
consumer price index is up on the whole of more than 60%, whereas that of telephone
services decreased by 3.2%.
Moreover, if we divide this span into two intervals, 1990-1998 and 1999-2005, it
emerges how the second period taken into account - during which the AGCOM carried
out its activity - provides the greater contribution to curb inflation, with an average
annual cut in telephony service prices by 2.2%, against a 2.3% growth of the inflation
general index (table 1.1.).
Table 1.1. Annual average growth of public utilities charges and consumer prices
(%)
1990-1998 1999-2005
Electricity -0.2 1.2
Telephony 1.5 -2.2
Postal service 3.4 1.5
RAI/TV Licence fee 3.7 2.1
Railways 4.1 1.5
Drinking water 8.6 4.0
Gas 2.2 2.9
49

Local transport 8.7 3.2
Average
services
public utilities
3.1 2.1
Consumer prices 4.1 2.3
Source: Data from the Ministry of Economy and Finance processed by the AGCOM
As regards the development of investments in the sector (table 1.2.), the unfavourable
macroeconomic framework affected its trend, resulting in an average 2.8% decrease.
Table 1.2. Investments in fixed assets (€ million)
2004 2005 % Var. 05/04
Investments on fixed network 3,354 3,585 6.9
-of which OLO 957 1,247 30.2
% OLO 28.5 34.8
Investments on mobile network 3,730 3,303 -11.5
Total investments 7,084 6,887 -2.8
% fixed network 47.3 52.0
% mobile network 52.7 48.0
Source: Corporate data processed by the AGCOM
However, a more detailed analysis of such figure underlines a number of very
interesting factors. Firstly, the average decrease is considerably lower than that of the
previous year (-9.3%). Secondly, the figure on investments of alternative operators
(OLO) is in countertrend, investments in fixed lines performed well up 30%. In
particular, the latter figure clearly shows the transition to a competition model based on
investments in infrastructures; as it will be explained in detail below, alternative
operators are investing in access networks (mainly through unbundling) in order to
present themselves as single providers of communication integrated products.
The situation as aforementioned results from technological and market trends which
have been already outlined in the previous Annual Reports, as well as from new
scenarios which came to light during 2005.
The voice traffic increase on the mobile network is now a structural fact of the market:
the use of the mobile phone as increasingly widespread communication tool reflects
also the marketing policies pursued by mobile operators proposing very advantageous
packages, especially for telephone calls originated and terminated on their network (onnet
calls).
50

The shift of traffic to mobile services is also one of the causes of the falling revenues –
higher than expectations and of that recorded in 2004 - from voice traffic on fixed
network (5.4% against 4.8% in 2004). Among the factors contributing to this reduction
there are the cost cutting of calls to mobile phones – following the regulatory measures
adopted by AGCOM on mobile termination charges – as well as the ongoing
competitive process with the growing trend by fixed telephony operators to propose on
the market flat or semi-flat rates, both on PSTN network and through VoIP.
These offers are often launched in conjunction with broadband Internet access: the
growing trend of alternative operators to propose themselves to end users as single
operators (providers of Internet and voice services) in place of the incumbent (Telecom
Italia) was made possible by investments in the network (unbundling, in full and shared
access mode). The decision by the main competitors of the incumbent to adopt a
competition model based on the use of their own infrastructures derives from the
reduced margins from traditional services such as voice traffic on fixed lines and from
the simple resale of connectivity acquired from the incumbent operator.
AGCOM’s regulatory strategy, aiming at reducing the price of unbundled access to
Telecom Italia local network (it is worth mentioning that such cost is currently the
lowest at European level), contributed to an arousal of interest by alternative operators
towards such services as well as to direct the market to a competition model based on
network infrastructures and not on the simple resale of Telecom Italia wholesale
services.
However, the reduction of average revenues from the sale of broadband connections
speeded up the search - also by TLC national operators – for additional services to
offset this reduction. Such activities include the enrichment of contents on broadband
portals of leading operators and the launch of TV services on Internet protocol.
Therefore, the convergence between telecommunications and audiovisuals is finally
appearing with force.
Still talking about convergence, special attention is to be given to the development of
integrated fixed-to-mobile offers. Last year this issue was at the centre of attention also
due to the merger through incorporation of Telecom Italia Mobile in Telecom Italia.
This process will cause profound changes, some of which are already evident, not only
in the provision of services by operators, but also in the sector’s future competition
structure. Being aware of the importance of this factor, AGCOM, decided to start a factfinding
inquiry in the development of fixed-to-mobile convergent offers in order to
assess any biases to proper operation of market mechanism as well as the suitability of
the relevant regulatory system currently in force.
As preliminary step, it is useful to point out that the convergence between fixed and
mobile TLC services mirrors the passage of operators’ infrastructures to new generation
networks (NGN) based on Internet protocol (IP). In particular, the term NGN refers to
an infrastructure capable of carrying voice and data on the same physical network using
IP network technology: in this network architecture voice is processed as a set of data
packages. This model is completely different from the “historical” one of fixed TLC
51

operators’ infrastructures, characterized by a variety of different physical networks
(ATM, PSTN and IP), having different network technologies. Furthermore, this variety
of physical networks is accompanied by a multiplicity of specific applications for each
service.
With the passage to NGN this scenario is considerably streamlined. Operators are able
to reduce running and operating costs of infrastructures, as well as to make savings for
access equipment (such as telephone exchanges). The streamlining refers not only to the
physical structure (with a limited number of networks hubs) but also to the network’s
“logical” structure. The latter is divided into few functional sections: access core section
(containing the so-called network intelligence), a control level and a section containing
applications which will be based mainly on a platform called IMS (IP Multimedia
Subsystem) built on open technologies which favour the implementation - on the
network itself – of IP-based applications, both by TLC operators and third companies.
The adoption of new generation networks entails – as already mentioned – the
opportunity to provide value-added applications and services with a convergent
perspective: by reducing gradually the historical distinction between
telecommunications fixed and mobile services. The fixed-to-mobile convergence term is
currently used to define the different integration levels between fixed and mobile
services provided by a telecommunications operator. Starting from the minimum limit
of service integration, users can receive a single bill for fixed and mobile telephony
services. With a higher level of convergence the consumer can have a number of
integrated services (such as, for instance, the opportunity to access a single voice
mailbox, for calls received both on fixed and mobile phones); in such case the user still
uses two different access tools: fixed and mobile phones. The convergence on which
attention has been focused in the last year refers to a higher level of integration,
involving the network infrastructure and which enables end users to have a single
(dedicated) terminal on which they receive calls which, according to where they are, are
routed on fixed network (via a broadband network and a router installed at home or in
the office with which the mobile has a wireless connection, through Bluetooth or wi-fi
technologies), or on mobile network (when the user is outside the router’s coverage
range). Thanks to the smart network the call is not cut off but passes without a break
from one network to the other; moreover, the system applies different call prices
according to the type of network on which the call passes.
This type of convergence is carried out by mobile and fixed operators (mainly
integrated companies and fixed operators which enter into contracts with mobile
operators). As regards operators working in the mobile market only, they adopt
strategies aiming at limiting the good value of convergent proposals offered by fixed
operators. They consist of the offer to end users of charge solutions with savings for
mobile phone calls made to fixed network numbers, within a specific geographic area
(at home or in the office). The opportunity to make mobile to fixed calls at more
favourable conditions or, in any case, at competitive prices compared with those made
on the fixed network may persuade some types of users (for instance some residential
users) to cancel their fixed network contract (in order to save on the monthly fee, which
52

is a significant part of the consumer’s telephone bill). In order to do so, mobile
operators must intervene to overcome another barrier which often persuades users to
keep their fixed telephone, which is the possibility to use broadband Internet access. At
present mobile operators’ offers cannot compete – especially in terms of prices (cost per
Mbps) – with those of fixed operators.
Factors mentioned so far outline that significant technological changes are taking place
in the TLC sector. Such changes may alter considerably the competitive structure of all
the national markets involved.
Fixed line services
In 2005, the Italian market value of TLC fixed line services (Internet services not
included) totalled 13.3 billion euros (figure 1.19.), with a more than 3% decrease
compared to the previous year. Similarly to what happened in 2004, the growth of data
transmission services (1.4%) was not enough to offset the drop in voice services (3.9%).
In particular, the expense for voice telephony services totalled 11.9 billion euros, of
which 5.1 billion concerning the business segment and the remaining 6.8 billion the
residential one.
As already mentioned, the reduction of expenses for voice services on fixed network is
a structural fact, caused by the competitive pressure which characterized the market as
well as by the transfer of traffic to the mobile network. The spreading of voice services
on Internet protocol (VoIP) did not contribute to such process yet.
More specifically, the trend of each segment of voice services was the following.
Firstly, compared to the previous year a 1.2% reduction of revenues from activation and
telephone subscription fees occurred; this is due to the disconnection of lines especially
in the business segment with the replacement of ISDN lines with ADSL connections.
Secondly, a considerable reduction of 5.4% of revenues from traffic was recorded. This
was due mainly to the aforementioned context-related factors, i.e. competitive pressure
on prices and transfer of traffic to mobile network.
53

Figure 1.19. National market of fixed network services, voice and data* (€ billion)
Source: IDC, 2006 | * It does not include dial-up Internet access services which are
included in the "Internet services" area
Furthermore, the trend of revenues from voice traffic suffers from the significant
reduction of unit prices of fixed-to-mobile traffic as a consequence of the regulatory
measures adopted by AGCOM (within the market evaluation No. 16 among those
identified in the European Commission recommendation of 2003; cf. paragraph 2.1.)
during the year concerning the reduction of voice call termination maximum charges on
mobile operators’ networks. In particular, for the fixed-to-mobile traffic, AGCOM
assessed a benefit for end users equal to a reduction of expenses of about 1,835 million
euros in the period from 1 st September 2005 to 1 st July 2008. As shown in the table
concerning the trend of minutes of traffic below (table 1.3.), during 2005 the increase in
traffic volumes towards mobile was not enough to offset the reduction of unit prices.
Indeed, the reduced growth of this type of traffic, in conjunction with pressure on unit
prices, resulted in a drop in revenues of about 7%.
Still with reference to voice segment, last year was characterized also by the
introduction of a number of product innovations. First of all, there was a noticeable
increase in VoIP operators and offers, with the success of these services starting from
the last four-month period of 2005: the number of operators offering voice services on
Internet protocol increased and prices were cut many times. Most of VoIP operators
propose offers entirely based on consumption and offers in which the payment of a
monthly fee enables the user to make unlimited calls to numbers of national fixed
network. In order to boost the spreading of the service in an environment protecting
consumers’ interests AGCOM intervened with a light regulation which defined rights
and duties for VoIP service providers and envisaged changes for numbering plan and
use of numbers for VoIP, number portability and emergency services (cf. paragraph
2.2.).
54

Secondly, there has been an increase in integrated offers for voice and broadband access
(the so-called double play offers). In particular, for alternative operators, these packages
represent a significant opportunity to take the place of the incumbent operator: as a
matter of fact, unbundling enables to provide voice through either VoIP (hence on the
broadband connection provided by the alternative operator) or the regular PSTN
network; in both cases without the need to pay the subscription fee to Telecom Italia
any longer. In the first instance, shared access unbundling is used, within which the
alternative operator manages the data line in full freedom from the incumbent operator.
The alternative operator uses such line for the VoIP voice service. Whereas in the
second instance the alternative operator carries out the full unbundling managing freely
the entire telephone duplex cable (for both data and voice). Integrated offers for voice
and broadband access can be provided also by activating ASDL lines for data only –
acquired by the incumbent operator in wholesale mode – also in the absence of an active
voice line (PSTN). This mode has been recently regulated by AGCOM within the
market analysis for broadband wholesale services (market no. 12 among those identified
in the European Commission recommendation of 2003; cf. paragraph 2.1.). With this
system the alternative operator - which does not reach the end user through its on
network – can provide to consumers a VoIP service passing on the data line without the
need to pay the telephone subscription fee to the incumbent operator.
In this changing environment of the national competitive framework, the role played by
unbundling as competitive tool stands out: the opportunity for alternative operators to
propose themselves to end users as single providers of communication services (voice,
the Internet and value-added services) is turning out to be a key element for customer
acquisition and loyalty.
The spreading of unbundling is confirmed by data. At the end of 2005, the total number
of unbundled lines was 1.5 million against 900,000 at the end of 2004; Italy ranks
second in Europe, behind Germany which started two years in advance for lines
activated in full unbundling. In this connection it is important to point out that the
renewed interest showed by alternative operators in unbundled access to Telecom Italia
local network was determined by AGCOM’s regulatory strategy (recently confirmed in
the market evaluation No. 11 among those specified in the European Commission
recommendation of 2003; cf. paragraph 2.1.), which set the lowest price of the service at
European level.
These numbers – to which fibre optic connections are to be added (about 200,000 at the
end of 2005) – confirm the increased maturity of the Italian market in which finally a
competition model based not only on services but also and mainly on infrastructures
alternative to the incumbent’s ones has been achieved. The development of lines in
carrier pre selection (CPS) is a further proof of the choice made by alternative operators
to resort mostly to access infrastructures to acquire new customers: the increase in the
number of CPS lines has now come to a stop, reaching a value - steady compared to
2004 - totalling about 4 million. As to the distribution of CPS lines among OLOs
(figure 1.20.), with 50%, Tele2 is the operator which makes use of this mode of
telephone services provision more than all the others.
55

Figure 1.20. Distribution of lines in carrier pre selection among OLOs (March
2006) (%)
Source: Corporate data processed by AGCOM
The movement towards a competitive equilibrium based on infrastructure competition
represents an essential factor for the growth of the Italian market: indeed this is a
prerequisite for the development of value-added innovative services, such as, for
instance, TV on Internet protocol (IP TV). Unbundling enables operators to control the
quality of the connection supplied and thus to provide value-added services (such as
voice or video services) ensuring a certain service quality level.
Within this framework, also in 2005, Wind and Fastweb are the operators investing
more in unbundling in Italy, joined, during the year, by Tiscali and Tele2. These two
companies revised their strategies, after considering too limited the margins from the
resale of traffic and from the sale of connections bought in wholesale mode from
Telecom Italia; therefore they committed themselves mostly to investments in
infrastructures.
In 2005, voice traffic volumes (table 1.3.) decreased by 2.7% in total, as a result of the
following main factors:
• Decrease by 2.8% and 4.5% respectively, of local and national calls, due to the
competitive pressure, to the adoption of flat and semi-flat rates and to the
migration to mobile network;
• Reduction by 1% for international calls, also as a consequence of the adoption
of VoIP solutions enabling the end user to save considerably for calls to the
main foreign countries;
• Slight increase in the fixed-to-mobile traffic (0.5%), considerably lower than
that recorded in 2004 (4.5%), above all because of the increased use of mobile
phone as main means of communication towards mobile traffic;
• The growth of the “Other” component (1.7%), including a series of services
among which:
56

– “Smart” services characterised by a special price determination system based
on the smart network of each operator. This category includes premium services,
shared charge services, free phone numbers and one-number services;
– Information services (such as directory assistance or information retrieval) and
the so-called STS (Supplementary Telephony Services, such as Memotel,
personal numbers, etc.).
Table 1.3. Traffic of fixed voice services by type (million/minutes)
Type of traffic 2004 2005
Local * 53,790 52,281
% Var. -3.7 -2.8
Long distance – National 42,060 40,167
% Var. -4.5 -4.5
Fixed-to-mobile 20,041 20,142
% Var. 4.5 0.5
International 3,633 3,596
% Var. -0.7 -1.0
Other ** 3,244 3,299
% Var. 1.3 1.7
Total 122,768 119,484
% Var. -2.5 -2.7
Source: IDC, 2006 | * Internet dial-up access excluded. ** Smart services, information
services and STS included
In this regard, it is important to point out that in 2005, following the opening of the
market to competitors many operators launched their information services for
subscribers. The liberalization of the service, decided at community level and envisaged
in the Code of electronic communications, produced the entry into the market of many
operators as well as the launch of massive advertising campaigns. AGCOM intervened
on the liberalization of the information service not only with the opening to the
provision of the service by a plurality of economic agents but also by laying down rules
and monitoring their effectiveness in order for the market to be really competitive: such
activity introduced interventions such as the reduction of the ceiling prices of calls for
directory assistance information services from fixed lines and the introduction of
restrictive regulations for call completion (cf. paragraph 2.2.).
As regards telephones lines installed, it can be estimated that in 2005, in Italy, there
were about 27.4 million lines (PSTN/ISDN) (figure 2.6.). In the same way as it occurred
in 2004, last year as well there has been a significant drop in the number of ISDN lines
(-6%, totalling about 400,000 lines), which have been replaced by the adoption of
broadband accesses, especially in ADSL technology. PSTN lines (figure 1.21.) show a
slight decrease (-0.7%).
57

Data mentioned so far outline a national fixed TLC market with its traditional
component (voce traffic) showing a structural decline. In order to cope with this process
as well as to meet consumers’ needs - as described in detail in the previous paragraph -
integrated fixed-to-mobile offers have been introduced.
Figure1.21. National market of fixed line services, installed lines (million)
Source: IDC, 2006 | * Forecasts
Telecom Italia has currently adopted some convergent initiatives by launching
combined call charge plans (for fixed to mobile and from mobile to fixed calls
respectively) both for residential and business users.
Based on what is happening abroad, in the future, these pricing promotions could be
followed by real integrated offers by fixed operators envisaging the use of a mobile
phone with UMA (Unlicensed Mobile Access) technology. Such standard was
developed within the group having the same name, composed of a number of TLC
operators and companies selling mobile phones (among which British Telecom, Alcatel,
Motorola and Siemens) in order to develop convergent services using radio frequency
bands for which licenses were not allocated (such as Bluetooth and wi-fi).
Still with regard to fixed-to-mobile integration, strategies of operators working in the
mobile sector are to be mentioned. For instance, Vodafone Italia launched an offer with
cheap prices for calls from mobile phones to fixed network numbers (up to an agreed
amount of airtime) in a specific place chosen by the user (such as home or office). The
application of different pricing plans (preferential prices for calls to fixed network made
in the place chosen by the user and regular pricing plan for calls made outside such
place) is made possible by the fact that the mobile network can identify the user
position.
Taking into consideration data transmission services (comprising Managed Data
Network Services – MDNS – which include ATM, Frame Relay, X.25 and IPVPN) and
dedicated circuits for business users, it is estimated that in 2005 the market (figure
1.19.) exceeded on the whole 1.3 billion euros, with a 1.4% increase compared to 2004.
58

The growth did not live up to expectations since the persisting difficult economic
situation encouraged companies to defer their investment in the modernization of
transmission networks.
As to each segment of data transmission services, trends were as follows:
• MDNS services (Managed Data Network Services) increased by 5.6%, thanks
mainly to IP VPN (virtual private networks on Internet protocol) increased in
one year by 18% (reaching a turnover of 408 million euros). The spreading of IP
VPN can be explained by their flexibility and efficiency and by the features of
safety and service quality, which recently improved considerably. In particular,
the presence of VoIP offers - complementary to IP VPN - enables companies to
converge all TLC services on a single IP infrastructure thus obtaining increased
rationalization and optimisation of its infrastructures as well as the reduction of
operating costs. Trends of growth of IP VPN revenues have been revised
downwards in the light of the replacement, which is slower than expected, of
traditional solutions of data connectivity (ATM/Frame Relay in particular) by IP
VPN. As a matter of fact, ATM/Frame Relay solutions continue to offer very
reliable services to companies;
• The dedicated circuits segment was characterized, on the whole, by a 6%
decrease; this reduction is however lower than expectations and can be ascribed
mostly to a drop in prices.
As far as the competitive framework is concerned, in 2005 a pick up in the
merger&acquistition activity has been recorded. The merger through incorporation of
Telecom Italia Mobile in Telecom Italia; the acquisition by British Telecom of the
entire Albacom shares of stock, the transaction with which BTAlbacom has
subsequently taken over 100% of Atlanet and the acquisition of 62.75% of Wind by the
Weather Investments fund are to be mentioned. With reference to the breakdown of
operators in terms of specialization of offer of TLC services no significant change has
been recorded. In addition to a group of operators completely or mainly focused on
services for companies (Colt, BTAlbacom, Elitel), there are operators carrying out their
activity mainly in the residential market (Tele2 and Tiscali) as well as operators catering
for both business and residential customers (Eutelia, Fastweb, Telecom Italia and
Wind).
59

Table 1.4. Market shares in voice telephony * (%)
Total
revenues
(Access,
Voice)
Total Voice Local National Internation
al
Fixed to
Mobile
‘04 ‘05 ‘04 ‘05 ‘04 ‘05 ‘04 ‘05 ‘04 ‘05 ‘04 ‘05
Telecom 78.9 78.0 69.3 67.4 74. 71.3 72.9 73.2 52.9 46.8 65.1 65.4
Italia
9
Wind 6.8 6.0 10.8 9.6 10.
3
11.7 8.4 9.8 8.5 8.2 14.1 11.1
Tele2 4.7 4.8 7.4 7.8 8.6 9.8 6.6 6.8 7.2 7.4 8.9 9.3
BT
Albacom
3.1 3.9 4.9 6.4 2.2 1.8 8.6 6.3 10.0 15.7 5.1 6.4
Fastweb 2.4 2.9 1.2 1.8 0.4 0.6 0.8 0.7 7.3 9.2 1.9 2.7
Others 4.1 4.4 6.4 7.0 3.6 4.8 2.7 3.2 14.1 12.7 4.9 5.1
Total 100. 100. 100. 100.0 10 100. 100. 100. 100. 100. 100.0 100.0
0 0 0 0.0 0 0 0 0 0
Source: corporate data processed by AGCOM | * Due to some changes in the
calculation methods made by companies, to reclassifications and, in other cases, to
changes in the range of activities carried out, market shares relating to 2004 are not
perfectly comparable with the corresponding values indicated in the previous Report to
Parliament.
Within this framework, the structure of market shares remains essentially unchanged
(table 1.4.), even if changes are expected in the future due to the effect, for instance on
the revenues of access, of the infrastructure strategies of alternative operators as
aforementioned. In particular, a small decrease in Telecom Italia market share in terms
of both total turnover (including access), and above all of revenues of voice services is
recorded. Taking into account each type of traffic, the slight recovery of Telecom Italia
for national traffic, the substantial stability in fixed to mobile traffic, the loss in local
traffic and above all, in international traffic where the share dropped for the first time
below 50% are to be pointed out.
Mobile services
Data concerning the Italian market of mobile services confirm the significant dynamism
which characterized this sector in 2005. There was a yearly growth of the market of
7.8%, for an overall value of the mobile services market of 19.6 billion euros (figure
1.22.). Revenues of the voice segment increased by 5.3%. This figure, which is lower
than last year, can be ascribed to the strong competitive pressure on prices and to
60

AGCOM’s regulatory intervention concerning ceiling prices for termination of calls to
the networks of mobile operators as aforementioned. The segment of value-added
services increased by 21.8% reaching a total turnover of 3.4 billion euros at year’s end.
This is a very significant figure: this segment outstripped several segments of the fixed
telephony market (such as data transmission). The more traditional component (SMS
messaging and peer-to-peer MMS) confirms itself as the leading one among valueadded
services (VAS): however, an increase has been recorded in the percentage of
innovative VAS, which reached about 32.5% of the total revenues from mobile VAS
(from 23% in 2004).
Figure1.22. National market of mobile services (€ billion)
Source: IDC, 2006
SIM reached 71.5 million units compared to about 63 million units in 2004. This figure
is very high, even higher than the growth recorded in the previous year, which confirms
the presence on the market of double and triple SIM. The growth is expected to slow
down in the following years, at the end of 2007. The total number of SIM is envisaged
to stabilize around 79.6 million units.
The most significant figure refers to the growth, exceeding expectations, of UMTS
connections (from 2.6 million users at the end of 2004 to about 10 million at the end of
2005; figure 1.23.). The increase is due also to the extremely advantageous launch
policies of mobile operators. The spreading of the 3G mobile technology places Italy at
the forefront worldwide, outstripping not only the other European countries but also the
United States and Japan. UMTS technology is expected to continue to grow at fast pace
in the coming years. In 2007, over 25 million of 3G mobile lines are envisaged.
61

Figure 1.23. UMTS users (million)
Source: IDC, 2006 | *Forecasts
In this regard, it is necessary to dwell shortly on the technological prospects of the
service. As a matter of fact, mobile operators expressed their interest in developing a
new technology: HSDPA (High Speed Download Packet Access). This is an UMTS
upgrade which enables increased data download speed (in theory up to about 14 Mbps,
in real terms about 900Kbps). One of the advantages of HSDPA is that the upgrade is
carried out by means of a relatively simple intervention on the software and, to a lesser
extent, on the hardware. The first HSDPA services, launched in Rome at the beginning
of March, enable a speed of 1.8 Mbps and use a data card for data traffic. By year-end at
least three mobile operators are expected to launch HSDPA services on a commercial
basis. Finally, by the end of 2008 HSUPA (High Speed Upload Packet Access)
technology should be put on the market. This technology supports high speed for upload
as well (up to 6 Mbps).
As regards the market structure (table 1.5.), an ongoing and progressive decreased
concentration, in terms of both values (revenues) and volumes (lines) is taking place. In
particular, the market share of the leading operator - Telecom Italia Mobile - continues
to decrease, whereas new operators are more and more playing a major role: in
particular, in three years only, H3G reached 6.7% of total revenues and 7.8% of the total
number of lines. This situation confirms the presence of a lively competition process.
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Table 1.5. Market shares in mobile networks* (%)
Revenues Active lines
2004 2005 2004 2005
TIM 45.7 42.4 41.8 40.0
VODAFON 37.1 35.7 35.3 33.1
E
WIND 14.3 15.2 18.5 19.1
H3G 2.9 6.7 4.5 7.8
Total 100.0 100.0 100.0 100.0
Source: corporate data processed by AGCOM | *Due to some changes in the calculation
methods made by companies, to reclassifications and, in other cases, to changes in the
range of activities carried out, market shares relating to 2004 are not perfectly
comparable with the corresponding values indicated in the previous Report to
Parliament.
In this market scenario, results of voice revenues suffered from the competitive pressure
in prices and, thus from strategies implemented by mobile operators aiming at taking
away customers from competitors. In particular, many efforts were made to acquire new
customers thanks to mobile number portability (MNP). With this mechanism an
operator replaces entirely the previous operator of the user, without limiting itself, as it
was in the past, to be added to the original operator as service provider on another SIM.
In this connection, it is necessary to point out that - thanks also to the ongoing
interventions of AGCOM aiming at first introducing and then improving the portability
service effectiveness (cf. paragraph 2.3.) - Italy ranks second in Europe as to MNP
spreading, with over 8 million numbers brought from one operator to another (figure
updated as at April 2006). In a situation in which the penetration of the mobile
telephony service is close to saturation, number portability contributed to reduce
barriers to entry and change (so-called switching costs), encouraging the competition
process for the full benefit of consumers. During the year operators launched offers
proposing mobile phones at very attractive prices and advantageous rates provided that
users commit themselves not to change operator for a limited time; in this case as well
AGCOM intervened in order to protect end users, by regulating the SIM lock practice
(cf. paragraph 2.3.).
The competition of mobile operators does not entail only prices, but it focuses also on
the introduction of product innovation. In addition to the considerable growth of 3G
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services, in 2005 solutions based on push-to-talk technology were launched. This
technology enables the user to make one-to-one (to a single user) and one-to-many (i.e.
to a community of users) voice communications simply by pressing a button. This
service is addressed mainly to users who need to make short communications to many
users (taxi-drivers, people working in the emergency sector, others). In Italy, these
services were proposed to both business and residential users (in particular to
communities of young people). The launch of this service is an example of the existing
passage to all IP networks: the push-to-talk service uses the aforementioned IMS (IP
Multimedia SubSystem) platform.
As regards the segment of value-added mobile services, operators launched many
initiatives to encourage the use of convergent services. Examples are special offers
enabling users to watch all the TV programmes on the operator’s portal at fixed prices,
free navigation within the operator’s portal and promotions on data card for the
navigation on the web using a laptop, offers including free video calls together with the
possibility to download a fixed number of songs. In their offer portfolio mobile
operators directed many energies into the increase of the catalogue of songs to be
downloaded directly on the mobile phone.
Moreover, as to the telecommunications and audiovisual convergence, the innovative
services launched during the year, include:
• Videosharing services, on UMTS network, making it possible to videocall and at
the same time, in real time, to combine the call with a data flow such as, for
instance, an image, a text or a song, in other terms to share contents with the
user called;
• Services to access movies on mobile phone. This is made possible by an
advanced system of streaming enabling the user to watch it also in different
parts, by interrupting and resuming the watching of the film at will.
The introduction of the DVB-H (Digital Video Broadcasting over Handheld)
technology improved considerably the convergence between telecommunications and
audiovisual. By the end of the year, three mobile operators are expected to launch their
commercial offers. This will bring the Italian market to the forefront as to the provision
of this service at European level. The DVB-H technology is an adjustment of the
standard in use for fixed terrestrial digital TV (DVB-T) conceived to use contents on
handheld terminals (and therefore with changes taking into account features such as
limited screen and battery life). Compared to UMTS mobile networks already used to
supply TV services to the public, this technology has the advantage to support pointmultipoint
distribution (in contrast to UMTS services which are point-to-point).
Therefore, this technology provides a more efficient solution than the UMTS mobile
network, to provide TV services at the same time to a large number of users.
The launch of DVB-H services fuelled a heated debate related to the regulation of the
TV services on mobile phones (cf. paragraph 1.1.1.). The European Commissioner to
information society and media, Viviane Reding, has recently underlined that mobility
64

TV services might become the next killer application for mobile communication
systems. Therefore, AGCOM decided to spur product innovation by defining a light
regulation which will go with the development of the market and that, at the same time,
will be in line with the European regulatory project and its own institutional targets
(connected in particular with the respect of pluralism and competition). Therefore the
regulation aims at spurring the spreading of the service, by directing it towards a
development which is ideal for the well-being of the national community (cf. paragraph
2.6.).
Italy is the only European country in which almost all mobile operators are about to
start commercial DVB-H-related projects. These operators have adopted different
strategies. For instance, the H3G mobile operator chose to have its own network to
transmit DVB-H contents and to this end, in November 2005, it acquired Canale 7, a
TV station having a licence for digital terrestrial broadcasting on the national territory.
Thanks to this and to other minor acquisitions H3G launched mobility TV services on
part of the national territory. Whereas other operators (Vodafone and TIM in particular)
decided to lease part of the transmission band of the DVB-H network which is being
developed by Mediaset following the acquisition of the terrestrial analogue frequencies
of Europa TV. In any case, also the other mobile operators will soon be ready to make
available mobility TV services for their users.
Internet market
The number of Internet users in Italy is close to 28 million; most of them – 23 million –
belong to the residential segment, which, over the year, had the highest increase
(14.5%). In the business segment and in the “school and public education”, increases
were by 10.5% and 8% respectively.
Revenues from Internet services – access services as well as web housing and web
hosting services – reached 3.3 billion euros (figure 1.24.) and make up for 19.7% of
fixed line services.
Figure 1.24. Trend of revenues from Internet services in Italy (€ billion)
65

Source: IDC, 2006 | * Forecasts
The most significant phenomenon in the national Internet market is undoubtedly the
growth of broadband accesses: as at March 2006 (figure 1.25.) in Italy there were 7.1
million broadband connections, with 6.9 million using ADSL technology (97% against
93% in 2004), which proves to be by far as the prevailing platform on the market.
Figure 1.25. Broadband lines in Italy (million)
Total accesses Adsl
Source: Corporate data processed by AGCOM
As pointed out in figure 1.26., Italy is the fourth market in Europe for the spreading of
broadband, with a growth rate as much as 187% for broadband lines, over the last two
years; such growth rate is higher than the one of other major European countries: in
order to have an idea, in the same reference period, the average increase in broadband
lines in “Euro-15” Countries was considerably lower and equal to 144%. After all, data
show a clear turn-around, with a significant recovery for Italy, which appears both in
absolute value and in terms of growth, as one of the most dynamic markets in Europe.
The considerable growth recorded during the year can be explained by the strong
commercial boost by TLC operators. The launch on the market of unlimited ADSL
connections with a monthly price below € 20 played a major role in this environment.
The introduction of these offers contributed to cut considerably the average cost of
66

connections in the Italian market and interested mainly users’ groups which are more
sensitive to the price of connections than to their performance in terms of bandwidth.
As far as the market structure is concerned, in 2005 a significant decrease in the share of
Telecom Italia (over 3%) was recorded, in terms of both revenues and lines, which
declined steadily below 70%. At the same time, its major competitors strengthened their
position, with Fastweb and Wind holding shares over 10% and 5% respectively.
Figure 1.26. Shares in the broadband sector in Europe, December 2005 (%)
Source: COCOM
Table 1.6. Market shares in broadband (%)
Revenues Lines
2004 2005 April 2005 April 2006
TELECOM
ITALIA
65.5 62.8 73.2 69.6
MAIN 4 OLOs * 30.5 32.2 23.5 27.2
OTHERS 4.0 5.0 3.3 3.2
TOTAL 100.0 100.0 100.0 100.0 (a)
Source: Corporate data processed by AGCOM | * Colt, Fastweb, Tiscali and Wind in
revenues; Fastweb Tele2, Tiscali and Wind in lines
Furthermore, in 2005, operators introduced considerable diversification of the
offer in terms of connections’ bandwidth. In particular, connections with a band higher
than those in the wholesale list of Telecom Italia were made available. This process was
favoured by the introduction in Italy of the shared access. This type of unbundling has
rental costs lower than those of full unbundling and enables the alternative operator
(contrary to what occurs in the wholesale model) to manage completely high-speed
Internet connectivity services, leaving the provision of voice services to the incumbent
67

operator. Moreover, as previously mentioned, the shared access encouraged the offer of
VoIP solutions in the Italian market. On ADSL connections activated by providers in
shared access mode the alternative operator can activate VoIP lines offering a voice
quality which is by far better than that of VoIP lines activated on wholesale connections
acquired from the incumbent.
The transition to a competition model based on the use of infrastructures
alternative to those of the incumbent operator (not only shared access but above all full
unbundling) is - as previously explained - a signal of the maturity of the Italian market.
As a matter of fact this is, inter alia, a prerequisite for the development of innovative
services, such as IP TV. The opportunity allowed by unbundling to control the
connection enabling the use of IP TV services is considered by TLC operators as key
element for the success of their offers.
In this connection, it is to be pointed out that, at the end of 2005, Telecom Italia
launched its offer of television on Internet protocol which, in addition to a section of
free contents (included in the basic subscription), includes for-pay contents available in
pay-tv mode (Sky Italia packages) and in pay-per-view and video on demand modes.
The service joins the one offered by Fastweb, the first Italian triple play operator, and,
by the end of 2006, it should be followed by the launch of similar services by Wind and
Tiscali.
Significant changes occurred for broadband connectivity via wi-fi (Wireless
Fidelity) and wi-max (Worldwide Interoperability for Microwave Access) technology.
At the beginning of October 2005, the Ministerial Decree of May 2003 on wi-fi was
changed considerably. The main change refers to the removal of the operativeness limit
of wi-fi in places open to public and in public-attended confined areas. This change
enables authorized operators to provide wi-fi services throughout Italy, by allowing the
interconnection of access points of their own network without any geographic
restriction. One of the most interesting applications of this technology consists in the
possibility to provide broadband connectivity in areas not reached by ADSL. In this
connection, it is to be pointed out that Italian cities announced many contracts for the
carrying out of broadband infrastructures by means of wi-fi technology in order to reach
the most inaccessible towns.
Furthermore, in July 2005, tests on wi-max technology were stared on
frequencies made available by the Ministry of Defence. This technology has a
transmission standard enabling connectivity at high speed on wireless networks having
a theoretical maximum capacity of 50 km in rural areas and real speed between 8 and 20
Mbps. Tests were supposed to be completed at the end of the year, however, due to a
respite, the deadline is now set at the end of June 2006. Once tests have been completed,
a public consultation among operators will take place in order to consider the
willingness to invest in this technology. Upon completion of the consultation the
procedure for the allocation of licences will be defined. This technology allows a
number of applications; wi-max (in the standard wi-max 802.16-2004 version) can be
used as: a) broadband wireless access in fixed or nomadic mode (i.e. enabling a limited
68

mobility), as an alternative to other technologies (fibre, DSL, etc.); b) a hot-spot (with
service quality and speed/coverage higher than wi-fi); c) a backhaul for fixed and
mobile networks. Moreover this technology may have applications also in the mobile
sector; however, the wi-max 802.16e standard, which extends the fixed to nomadic
access mode to mobile, is still under definition. It was ratified at the end of 2005 by
IEEE whereas the tests for the certification of the equipment will not start before the
end of 2006. Since the two technologies (“fixed” wi-max – 802.16-2004 version – and
“mobile” wi-max – 802.16e version) are not interoperable between them operators will
have to decide whether to launch the “fixed” wi-max” or wait for the arrival of the
“mobile” wi-max.
1.2.2. Television
Acquisitions in the TV market
2005 was characterized by a large number of acquisitions in the sector of digital
terrestrial television. These operations aimed mainly at developing the digital
transmission network.
In this connection, it is pointed out that as to the terrestrial network, the existing
system (the so-called switch-over) is characterized by the simultaneous presence of the
two infrastructures of analogue and digital networks. The coexistence of the two
networks aims at enabling, on the one hand, the technical upgrading of the transmission
facilities of existing network operators and, on the other hand, to give users time to be
equipped with the necessary set-top box to receive transmissions with the new standard.
Law no. 66 of 20 March 2001, set 2006 as deadline to stop the terrestrial analogue TV
transmission; decree-law no. 273 of 22 December 2005 changed this deadline,
indicating the date for the switch-off of analogue transmission by the year 2008 (cf.
paragraph 1.2.6.). During the transition stage, the development of digital terrestrial
networks can take place both through the acquisition of facilities and frequencies from
third parties and by means of the conversion into digital technique of facilities and
frequencies already owned by the broadcaster. Therefore, during 2005, the leading
operators started a policy of acquisitions aimed at enhancing their transmission network.
In parallel, new operators entered the market, such as L’Espresso Publishing Group, that
bought the Rete A TV station.
The growth of pay-tv offers
In 2005 the gradual introduction of TV offers on platforms different from the
terrestrial analogue network took place in the Italian television market. This enables end
users to receive contents in digital mode via the terrestrial network, satellite and cable.
69

As regards contents, the main novelty for end users was the launch – via the
digital terrestrial platform – of pay-per-view offers using the DVB-T (Digital Video
Broadcasting -Terrestrial) standard. This service is based on a commercial offer which,
by purchasing a prepaid card, allows the viewer to access different contents, upon the
payment of each event. Mediaset and Telecom Italia Media are the operators currently
offering this service on the market. They market their products with “Mediaset
Premium” and “La 7 Cartapiù” respectively. As to the quality, these contents fall into
the category of the so-called premium rights consisting of the offer of movies and sports
events.
As shown in the table below, the overall offer - through digital terrestrial
networks - is made up of a wide range of free-to-air TV programmes. Programmes can
be divided into three categories: programmes broadcast on analogue networks and
repeated on digital networks (simulcast), new programmes broadcast on digital
networks and pay-tv offers. Obviously the offer on digital terrestrial networks causes an
increase in the total number of programmes as opposed to the case in which only the
offer available on analogue networks is considered. It is to be pointed out that unlike
what happens on analogue networks where a frequency can carry only one programme;
in digital networks, signal compression enables each frequency to carry from four to six
programmes by using the MPEG-2 encoding.
Table 1.7. List of national TV programmes available on digital terrestrial networks
Mux Analogu
e
Simulca
RAI MUX A Rai Uno
Rai Due
st
Rai Tre
Digital
programme
s
Rai Utile
RAI MUX B Rai Sport
Rai News 24
Rai Doc-
Futura
Sat 2000
CCTV9
RTI MUX 1 24ore TV
Class News
Coming
Soon
BBC World
RTI MUX 2 Canale 5
Boing
Media
Shopping
Pay Services
Mediaset
Primium
70

DFREE Rete 4
Italia 1
Sport
Italia
TI MEDIA
BROADCASTING
La 7
MTV
Telemar
ket
Rete
Capri
L’ESPRESSO PUBLISHING All
GROUP
Music
Source: DGTVi, update as at May 2006
24ore TV
Class News
Coming
Soon
BBC World
SI Live 24
SI Solo
Calcio
La Chaine
Info
La 7 Sport La 7 Cartapiù
In brief, some operators of the digital terrestrial television market are
introducing a special offer in which the new platform makes available a mix of free-toair
and pay-TV products. In any case, in this business model too, premium products
play the role of killer application, in the same way as it happens for platforms working
solely with conditional access. It follows that, regardless of the business model adopted
by operators, the scarce resource on the television market remains the availability of
contents with a higher added value.
A further significant factor in 2005 was the consolidation of the Sky Italia
satellite platform, which in March 2006 reached 3.9 million subscribers. In its previous
Reports to Parliament AGCOM had already pointed out the importance of the growth of
the satellite platform. In the following paragraph, the analysis of the market shares
makes it possible to have a closer look at the economic value of satellite offers.
The size of the television market in 2005
In 2005, total television market resources (as shown in the following table)
increased by 7.8%, with a slight drop compared to the result in 2004 (+10%). The
growth in 2004 was influenced by the good performance of the advertising revenues,
which had a limited increase (3.7%) in 2005. Revenues from RAI licence fee - whose
unit value was the same as 2004 - show a moderate increase by 0.6%. Pay-tv offers
71

ecord the highest growth rate in 2005, both in terms of absolute value (+344 million
euros), and percentage points (+31%), whereas the same item had a 20% increase in
2004. As to pay offers it is to be pointed out further the growth of revenues from pay
per view (PPV) services increased by 65% in 2005; these services benefited from the
spreading of offers on digital terrestrial platform, which, in 2005, reached 45 million
euros.
Table 1.8. Resources of the television market (€ million)
2004 2005 % Var.
Advertising 3,746 3,885 3.7
Licence Fee 1,474 1,483 0.6
Pay Offers, of which 1,093 1,437 31.5
- subscriptions 949 1,199 26.4
- PPV 144 238 65.0
Agreements and provisions 46 46 0.5
Total 6,359 6,851 7.7
Source: Corporate figures processed by AGCOM
In 2005 advertising revenues continue to be the main resource of the market,
contributing with 56.7% (table 1.9.) to the total value of resources even if the weight of
this item is lower than the previous year. The RAI licence fee, which as public subsidy
is not connected with the trend of the business cycle, further reduces its incidence on
total resources 3 . In terms of trends, perhaps the most significant figure is the substantial
equivalence between the value of the RAI licence fee and that of pay offers with the
latter reaching 21% of total resources, only 0.6% below the licence fee.
3 In 1998 the value of the RAI licence fee was 27.7% of the resources in the television sector.
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Table 1.9. Resources breakdown of the television sector (%)
2004 2005
Advertising 58.9 56.7
Licence Fee 23.2 21.6
Pay Offers 17.2 21.0
Agreements and provisions 0.7 0.7
Total 100.0 100.0
Source: Corporate figures processed by AGCOM
As regards data relating to each company (table 1.10.), RAI and RTI, recorded
growth rates of 1% and 5% respectively, whereas Sky and Telecom Italia Media,
showed an increase in revenues by 29% and 21% respectively, thanks to the growing
spreading of pay offers.
In 2005, the public service concessionaire confirms itself as the leading operator
in the market in terms of overall revenues. But, after a significant increase in the
advertising turnover (totalling 10.5) recorded in 2004, revenues from advertising
increased by 1.5% only in 2005, with a performance lower than market average. In the
2004-2005 period, revenues from licence fee remained unchanged as well as those from
agreements, which represent a share of the marginal revenues of the concessionaire for
the public service. Unlike its competitors, RAI does not offer pay-tv products on the
digital terrestrial platform.
On the whole, RTI grows more than RAI thanks to a more dynamic growth of
advertising revenues and to the contribution - even if still moderate (36 million in 2005)
- of revenues from pay-per-view services on the digital terrestrial network.
As regards pay-tv offers, Sky Italia closed as at 30 June 2005 the first year in
which the company ran regularly 4 after the acquisition of Telepiù. The trend of revenues
confirms that the single platform, represented by Sky Italia, recorded the highest growth
rates, both in percentage points (+29%) and absolute value (+326 million euros). In
detail, the overall value of subscriptions increased by 28% compared to the figure in
2004, whereas advertising revenues increased by 44% reaching 84 million euros, even
if, considering the business model of the pay platform, this item is still of minor
importance compared to overall revenues.
In 2005, La 7 group, controlled by Telecom Italia, increased by 21%, improving
its performance compared to 2004, when the growth was 17%. This result, as in the case
of RTI, benefits from the launch of pay services on the digital terrestrial platform which
allow to reach revenues of 9 million euros as at 31 December 2005.
4 For Sky Italia s.r.l. the closing of the corporate year is as at 30 June of each year according to the practice of The NewsCorp Ltc,
its leading shareholder which adopts the English fiscal year system. For homogeneity with other operators, data supplied by the
company for the Report are adjusted to the calendar year.
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Table 1.10. TV broadcasters, typical revenues (€ million), variation (%) and
market shares for 2005 (%)
Revenues
2004 2005 Var.
05/04
2005
Market
Shares
RAI – TOTAL 2,545 2,570 1.0 37.5
Advertising 1040 1,056 1.5
Licence Fee 1,474 1,483 0.6
Agreements 31 31 -
RTI – TOTAL 2,157 2,264 5.0 33.5
Advertising 2,157 2,228 3.3
Pay-tv offers - 36 n.s.
SKY ITALIA –
1,125 1,450 28.9 21.2
TOTAL
Advertising 58 84 44.4
Pay-tv offers 1,067 1,366 28.0
T. I. MEDIA (La Total
7/MTV) – TOTAL
113 137 21.2 2.0
Advertising 113 128 12.9 2.0
Pay-tv offers - - 9 n.s.
FASTWEB
TOTAL
–
27 27 0.0 0.4
Pay-tv offers 27 27 0.0
OTHER
BROADCASTERS –
TOTAL
392 403 3.0 5.9
Advertising 377 388 3.0
Agreements
Provisions
and 15 15 -
Total 6,359 6,851 7.7 100.00
Source: Corporate data processed by AGCOM
With reference to the trend of market shares, RAI is still the leading operator
with a share of 37% out of the overall resources. However, in terms of trend, the
concessionaire of the public service shows a poor performance, losing 2.5% of its
market share in 2005. Taking into account a longer time span - from 1998 to 2005 - RAI
lost 12% of its share market out of the overall resources, with an average annual loss of
1.5%. Under the circumstances, in the absence of changes to the business model of the
public concessionaire, it seems difficult that, in the short run, this negative trend can be
reversed.
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In 2005, RTI holds a market share of 30%, with a decrease by 0.9% compared
to 2004. In this regard, it is pointed out that RTI had a market share of 35.4% in 1998;
therefore, between 1998 and 2005, a decrease by 5.4% has been recorded, to be put
down to the growth of the weight of pay offer out of the total of TV market resources.
Sky Italia records the highest growth as to market share for 2005 with 21% of
the resources of the sector. The increase (equal to 3.5%) is essentially double compared
to the one recorded in 2004 (equal to 1.7%), which was a transitional year for the single
platform due to the merger with the Telepiù group. Shares of Telecom Italia Media and
Fastweb stay steady.
The following table shows the percentage of market shares of the TV
broadcasters on typical revenues for 2004 and 2005.
Table 1.11. TV broadcasters, market shares on typical revenues (%)
2004 2005
RAI 40.0 37.5
RTI 33.9 33.0
SKY ITALIA 17.7 21.2
TELECOM ITALIA MEDIA (LA 7 GROUP) 1.8 2.0
FASTWEB 0.4 0.4
OTHER BROADCASTERS 6.2 5.9
Total 100.0 100.0
Source: Corporate data processed by AGCOM
1.2.3. Radio
During 2005, compared to the previous year and with reference to the listening
of public and private radio stations (in terms of general frequency and, more in detail,
over seven days) a substantial holding of the listening of programmes of national radio
stations has been recorded.
Radio listening is measured by means of the Audiradio survey, carried out over
the year on a sample of 72,000 interviews representative of the Italian population aged
over 11 years and refers to the listening of public radio stations and of the most
important private ones, both at national and regional level.
The survey enables the gathering of information to assess the number, the
composition of listening and the profile of listeners at national level both by geographic
area and with reference to each Region. The survey is carried out by Istituti Unicab in
Rome and Doxa in Milan.
As far as RAI radio networks are concerned, the slight decrease in the audience
of RADIOUNO and RADIOTRE is counterbalanced by the positive result of
RADIODUE, due to the presence of some extremely successful radio programmes.
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With regard to private national radio stations included in the survey by
Audiradio, in 2005, the average growth of radio audience in the seven days is about
10%.
Table 1.12. Audience of main national radio stations – in the seven days (thousand)
Public radio stations 2005 2004 2003
Rai Radiouno 12,288 12,473 10,580
Rai Radiodue 9,707 9,298 7,888
Rai Radiotre 4,653 4,718 3,732
Isoradio 4,367 3,871 2,916
Notturno Italiano (from 0:00 to 6:00 am only)
713 769 749
Private national radio stations surveyed 2005 2004 2003
RMC Radio Montecarlo 6,931 6,406 5,287
Radio Capital 6,279 5,605 4,097
Radio Deejay 13,143 12,701 11,220
Radio Kiss Kiss Network 5,639 5,090 4,140
Radio Maria 4,477 4,108 3,435
Radio Radicale – Organo della lista Marco Pannella 1,733 1,761 1,536
Radio 105 Network 10,350 9,196 7,881
RDS Radio Dimensione Suono 100% Grandi Successi 12,831 11,889 10,713
Radio Italia Solo Musica Italiana 11,677 10,341 9,354
Rtl 102.5 Hit Radio 12,075 10,661 9,281
Radio 24 - Il Sole 24 Ore 4,114 3,683 3,072
Radio m2o 2,761 2,233 1,088
Source: Audioradio data processed by AGCOM
In 2005, the radio sector reached 37 million listeners in the average day. This
means a level of penetration of the population, aged over 11 years, in the order of 72%.
Radio listening in the average day is defined, by convention, as the one
preceding the interview, inclusive of the 24 hours between 6:00 of the preceding
morning and 6:00 of the morning of the day in which the interview takes place.
The unit of time-measurement used in the survey is a quarter of an hour. It is
considered as a listener in the quarter of an hour the one who declares to have listened
to the radio for at least 5 minutes in a given quarter of an hour.
The length of the listening is rounded off to the closest quarter of an hour.
In detail, during 2005, data concerning the average audience show a decrease for
RAI, whereas national private radio networks consolidate the results achieved in 2004.
76

Table 1.13. Audience of main national radio stations - average day (thousand)
Public radio stations 2005 2004 2003
RAI Radiouno 6,399 7,212 7,114
RAI Radiodue 4,213 4,502 4,796
RAI Radiotre 1,858 2,125 1,997
Isoradio 1,086 1,212 1,412
Notturno Italiano (from 0:00 to 6:00 am only)
141 158 178
Private national radio stations surveyed 2005 2004 2003
RMC Radio Montecarlo 2,075 2,083 2,185
Radio Capital 1,980 1,941 1,642
Radio Deejay 5,587 5,576 5,250
Radio Kiss Kiss Network 1,355 1,283 1,153
Radio Maria 1,829 1,787 1,573
Radio Radicale – Organo della lista Marco Pannella 449 492 463
Radio 105 Network 3,547 3,378 3,257
RDS Radio Dimensione Suono 100% Grandi Successi 4,505 4,420 4,220
Radio Italia Solo Musica Italiana 3,260 3,416 3,933
Rtl 102.5 Hit Radio 4,125 4,105 4,248
Radio 24 – Il Sole 24 Ore 1,572 1,575 1,566
Radio m2o 1,007 907 493
Source: Audioradio data processed by AGCOM
On the whole, the analysis of listening data confirms that radio is becoming
more and more popular. Leading publishing groups are looking with increased interest
into this sector as vehicle to convey their messages.
The stakeholders and the resources of the radio system
In 2005, with the acquisition of the national radio station “One o One”, carried
out through the subsidiary Monradio s.r.l., the Mondatori group joined the other major
publishing groups already belonging to the national private radio sector such as RCS,
Gruppo L’Espresso and il Sole 24 Ore.
Over time, the presence in the radio sector of the leading publishing groups
caused the expansion of the advertising market both in absolute value and with regard to
the different products categories.
77

Furthermore, it is pointed out that since radio has a considerable capacity to gain
the loyalty of its users, it is possible to identify exactly the recipients of the advertising
message, this protects the radio market from any heavy drop in advertising investments.
Moreover, the entry in the radio sector of the major publishing groups has
widened the advertising market both in absolute value and with reference to commodity
categories.
In 2004 advertising investments in the radio system reached 400 million euros,
with a 21.7% growth compared to 2003 5 . The following table shows the revenues from
the sale of advertising spaces obtained by the major national radio broadcasters.
Table 1.14. Revenues from the sale of advertising spaces of the major national
radio broadcasters (thousand)
2002 2003 2004
RAI 65,788 63,804 67,768
Elemedia 45,914 53,945 64,912
Radio Dimensione Suono 23,875 24,603 32,380
RTL 102,500 Hit Radio 22,718 28,774 31,656
Radio Studio 105 12,829 14,023 15,727
Radio Italia 13,762 13,364 14,982
Nuova Radio 13,637 13,401 13,716
Radio Kiss Kiss 4,317 5,495 6,034
RCS Broadcast 4,003 5,229 5,198
Source: Data of the Informativa Economica di Sistema (Media & Communications
Industry Database) processed by AGCOM
Future scenarios
Law no. 112 of 3 May 2004 on the structure of the radio and television system
prescribed specific provisions for digital radio broadcasting, which subsequently
converged in the Consolidation Act (Testo unico) on radio and television.
With its resolution No. 149/05/CONS of 9 March 2005 AGCOM issued
regulations to regulate the starting stage of digital radio broadcasting according to
procedures for the issuance of licenses and authorizations to operators already working
in the analogue radio system according to streamlining criteria.
The development of the digital radio broadcasting is the natural evolution of the
analogue system. The passage to digital technology represents a major opportunity for
radio mainly if it is considered in relation to competitiveness with other media.
The passage to digital technology will entail the need for radio enterprises to
take on themselves the burden of huge investments to develop the new technology.
5 Such value could not be homogeneous with terms specified in the decision No. 341/06/CONS.
78

Until now, such investments have been focused on the development of analogue
networks and on the improvement of the quality of the radio programme schedule.
1.2.4. Publishing
The daily press
As usual, the analysis on daily publishing is carried out starting from data on the
circulation of each newspaper processed based on the statements made every year by
the companies in compliance with law no. 650 of 23 December 1996.
The analysis of data concerning circulation - carried out on 140 daily
newspapers shows, with reference to 2004, last year for which data of the Informativa
Economica di Sistema (Media & Communications Industry Database) are available, a
small decrease of copies sold compared to the previous year. The overall value amounts
to 2080 million copies.
The average daily sale is 5.92 million copies; the average value of publication
per year is 324 issues.
Table 1.15. Circulation of daily newspapers (million of copies)
Year Circulated copies
1997 2,114
1998 2,107
1999 2,088
2000 2,143
2001 2,184
2002 2,095
2003 2,133
2004 2,080
Source: Informativa Economica di Sistema (Media & Communications Industry
Database)
The following table shows the figure concerning the average daily sale, in
thousands of copies, processed for the type of newspapers specified therein for 2003
and 2004.
79

Table 1.16. Average circulation of daily newspapers by main types (thousands of
copies)
2004 2003 % Var.
Economics 453 471 -3.82
Top ten information dailies 2.685 2.737 -1.90
Sports 783 818 -4.28
Source: Informativa Economica di Sistema (Media & Communications Industry
Database)
As shown in the following table, average circulation for free press daily newspapers was
1.59 million copies in 2004.
Table 1.17. Average circulation of free-press daily newspapers (thousands of
copies)
2004 2003 % Var.
Leggo 622 625 -0.48
City 515 482 6.85
Metro 311 324 -4.01
Source: Informativa Economica di Sistema (Media & Communications Industry
Database)
As regards data concerning the distribution of publishing product on sale it is to
be pointed out the growth of copies sold through sales channels different from
newsagents and subscriptions, namely by shops. In 2004 dailies sold through alternative
sales channels were 84 million, with an increase from 2% to 4% of the total of copies
sold.
However, the newsagent is still the main sales channel with a percentage on total
sales of 86.26%. Subscriptions account for 8.46% of the total copies sold in Italy.
Finally, on average, total copies sold account for 61% of published copies net of
printing rejects. This value goes up in relation to the growth of copies sold: for the first
10 newspapers as to circulation, the average ratio is 74%.
80

From the viewpoint of the economic result, figures concerning firms publishing
daily newspapers are to be examined with reference both to revenues from the sale of
copies and to the sale of advertising spaces.
In spite of the small drop in copies sold, total revenues for circulation, including
collateral products, go up to 1,740 million euro in 2004.
The further growth of the optional sale of products together with the daily,
confirms the positive trend recorded in 2004 and 2005.
In 2004, revenues from the sale of collateral products amount to 29.8% of the
overall value referred to the sale of the publishing product.
For “Corriere della sera” and “La Repubblica”, the two leading national
information newspapers, revenues from the sale of collateral products account by now
for a share equal to that deriving from the sale price of the daily newspaper.
Data provided by the companies for 2005 pointed out a considerable drop in
revenues for the sale of book collateral products, due to the saturation of some types of
offers concerning series whereas is on the rise the value of the turnover for the sales of
video products coupled with the daily newspaper.
In 2004, reversing the trend over the last few years, also the revenues for the sale
of advertising spaces went up with an increase around 3%. The positive trend continues
in 2005 with a further 2.7 % growth.
The revenues for the sale of advertising spaces of the free press continue their
positive performance. For this category of daily newspaper, economic data show a
further increase in the sale of advertising spaces over the last two-year period as well.
The overall revenues from the circulation of the main free press newspapers
“Leggo”, “Metro” and “City” account for 3.58% in 2004 and 4.40% in 2005 of the total
turnover for the sale of advertising in the daily newspaper sector.
As regards strategies to improve the business profitability referred to the
circulation of the daily newspapers, the leading groups are investing strongly in product
renewal.
In the 2004-2005 period full colour has been introduced in the two major
national information newspapers. This resulted in an increase in the maximum number
of pages and in the ensuing increase in the colour foliation for advertising users as well.
Moreover, investments are allocated to improve magazines in support of dailies
as well as to develop further the sale of collateral products thanks to intra-group
agreements, and agreements with publishing companies of collection products and to
joint initiatives among media belonging to different sectors: books and dailies,
periodical dailies and broadcast.
The improvement of sale effectiveness for adverstising aims also at increasing
the growth rate of spaces sold at local level.
81

With regard to the latter aspect, the strategy adopted by the Italian leading
publishing groups is very clear. They are working on national or supra-regional editions
rooted in limited territories, going beyond the typical local page, in an attempt to
characterize more and more the daily newspapers as strong and competitive medium
which can ensure good penetration in the socio-economic fabric of the territory in which
it is circulated. The ways in which these strategies are carried out are different.
The initiative recently adopted by Poligrafici editoriale is very interesting. It
consists in managing leading daily newspapers strongly rooted in some Regions such as
“Il Giorno” in Milan, “Il Resto del Carlino” in Bologna and “La Nazione” in Florence,
by combining a national editorial office with a brand named “Quotidiano Nazionale”.
For quite some time the L’Espresso Publishing Group has been publishing
within “La Repubblica” a daily supplement included in the newspaper, having as
territorial reference the provincial capitals and, through Finegil, it has been managing a
series of local daily newspapers with its own name, some having a limited circulation,
in a large number of areas, with a single national desk and many local editorial offices.
More recently “Il Corriere della Sera” created newspapers having regional
editorial offices and topics (such as, for instance, “Corriere del Mezzogiorno” and
“Corriere del Veneto”).
Finally, agreements have been entered into for the creation of the so-called
“sandwich-newspapers”. This is a local newspaper strongly rooted in a territory sold in
compulsory combination with a national daily having a limited circulation in the area,
since, even being national it is being circulated almost entirely in the region of
publication. This is the path followed by “La Stampa”, “Il Giornale” and “Il
Messaggero”.
As already mentioned in previous reports, the publishing companies of the two
most important free dailies in Italy, “”Leggo” and “City”, are under the control the
former of the Caltagirone group, publisher also of the dailies “Il Messaggero” and “Il
Mattino”, the latter to the RCS group, publisher of the dailies “Il Corriere della Sera”
and “La Gazzetta dello Sport”.
The circulation of free daily newspapers appears to be of strategic importance
for these groups in order to identify users not covered by the circulation of traditional
daily newspapers.
Free press is creating new readers of daily newspapers, since a very high
percentage of them do not read other dailies, i.e. they are not readers taken away from
traditional daily newspapers on sale.
According to many observers free dailies are likely to introduce a different use
which is distinct from the reading of traditional daily newspapers, with a structure
similar to web navigation, using a publishing format in which the increased news
essentiality brings these newspapers close to press agencies and on-line press.
82

The readers of this product are mostly young people. The publishing format is
strongly oriented towards this category of consumers.
It can be maintained that considering the significant circulation of free dailies in
the cities, the growth of the investments in this type of publishing product will continue
in future. The wide circulation of free dailies is attributable also to the type of
distribution adopted which (sometimes similar to leaflet distribution) makes it possible
to reach different types of users in a simple and direct way.
Finally, with regard to the relation between daily publishing and the Internet it is
easy to observe how the leading publishing groups showed an increased interest in the
multimedia sector, focusing on the integration between the tradition information model
and the one of the new communication lines offered by the emerging digital media.
The web-sites of daily newspapers offer the on-line version of the printed
newspaper and make use of all the advantages offered by the Internet compared to
traditional publishing such as real-time update, files containing articles and news, links
to have more detailed information on the various topics.
Also for on-line newspapers special attention is paid to local news, that Internet
users seem to enjoy very much.
With regard to the economic aspect, revenues for the sale of advertising spaces
of on-line daily newspapers are still not very significant in terms of absolute value even
if the percentage increase between 2004 and 2005 is considerable.
At the end of this paragraph, tables showing the newspapers of the main
publishing groups and those concerning the circulation of the daily newspapers at
national and interregional level referred to the year 2005 are included.
Table 1.18. Caltagirone Group
Name Net Italy North- North- Centre South
circulation West East
Il Mattino 41,956,265 1.20 - - - 11.34
%
Il Messaggero 112,151,045 3.21 - - 10.65 -
Leggo 145,863,274 4.17 - - 13.85 -
Nuovo
Puglia
Quotidiano di 9,036,123 0.26 - - 2.44%
Quotidiano di Lecce, 700.00
- - - 0.00%
Brindisi, Taranto
0.00
Tuttomercato 2,347,665 0.07
311.355.072 8.90
- - - 0.63%
Source: Data from AGCOM’s IES – Informativa Economica di Sistema (Media &
Communications Industry Database)
83

Table 1.19. L’Espresso Publishing Group
Name Net Italy North- North- Centre South
circulation
West East
Gazzetta di Mantova 14,563,716 0.42% 0.86%
Gazzetta di Reggio 6,567,598 0.19% 1.76%
Il Centro 10,560,585 0.30% 1.00%
Il Lunedì de La 37,297,022 1.07% 3.54%
Repubblica
Il Mattino di Padova 13,727,584 0.39% 3.67%
Il Piccolo 15,978,870 0.46% 4.28%
Il Piccolo del Lunedì 2,410,300 0.07% 0.65%
Il Tirreno 37,541,569 1.07% 3.56%
La Nuova di Venezia e 5,869,992 0.17% 1.57%
Mestre
La Nuova Ferrara 5,443,028 0.16% 1.46%
La Nuova Sardegna 25,624,808 0.73% 6.92
%
La Provincia Pavese 8,472,430 0.24% 0.50%
La Repubblica 241,493,289 6.91% 22.92
%
La Tribuna di Treviso 8,545,413 0.24% 2.29%
Messaggero del Lunedì 2,766,462 0.08% 0.74%
Messaggero Veneto 19,115,465 0.55% 5.12%
Nuova
Modena
Gazzetta di 5,576,818 0.16% 1.49%
Total 461,554,949
13.20%
Source: Informativa Economica di Sistema (Media & Communications Industry
Database)
84

Table 1.20. Monti Group (Poligrafici Editoriale)
Name Net
circulation
Italy North-West North-East Centre South
Il Giorno 42,251,906 1.21% 2.48%
Il Resto del Carlino 75,376,103 2.16% 20.17%
La Nazione 63,917,869 1.83% 6.07%
QS Quotidiano
Sportivo
41,832,568 1.20% 2.46%
Total 223,378,446 6.39%
Source: Informativa Economica di Sistema (Media & Communications Industry
Database)
Table 1.21. RCS Group
Name Net Italy North- North Centre South
circulation
West -East
City Bari 5,535,400
0.33%
0.16%
City Bologna 6,692,800
0.39%
City Firenze
0.19%
6,698,000 0.19% 0.39%
City Genova 3,411,000 0.10% 0.20%
City Milano 37,323,800 1.07% 2.19%
City Napoli 10,598,000 0.30% 0.62%
City Roma 40,104,400
1.15%
2.36%
City Torino 9,046,000 0.26% 0.53%
City Verona 2,587,500 0.07% 0.15%
Corriere del Mezzogiorno 10,626,257 0.30% 2.87%
Corriere del Mezzogiorno
Bari e Puglia
10,472,607 0.30% 2.83%
Corriere del Veneto 17,359,790 0.50% 4.65
%
Corriere della Sera 298,347,65
7
8.53% 17.55%
Corriere Economia Corriere
del Mezzogiorno
1,596,623 0.05% 0.43%
La Gazzetta dello Sport 192,274,27
2
5.50% 11.31%
Total 652,674,10 18.66
6 %
Source: Informativa Economica di Sistema (Media & Communications Industry
Database)
85

Table 1.22. Percentage values of the leading daily newspapers based on national
net circulations net of circulations of free newspapers
Newspaper
Company
Gross Net On
Name
Name Circulation Circulation national
net
circulation
Corriere Della Sera R.C.S. Editori s.p.a. 314,463,49 298,347,65 9.61%
2 7
La Repubblica Gruppo Editoriale
241,493,28 7.78%
L’Espresso s.p.a. 256,108,67
3
9
La Gazzetta dello R.C.S. Editori s.p.a. 203,989,82 192,274,27 6.20%
Sport
9 2
Il Sole 24 Ore Il Sole 24 Ore s.p.a. 164,046,11 149,961,11 4.83%
8 3
La Stampa Editrice La Stampa s.p.a. 160,933,58 149,497,25 4.82%
8 5
Corriere dello Sport Corriere dello Sport s.r.l. 151,193,54 142,132,97 4.58%
Stadio
2 8
Il Messaggero Il Messaggero s.p.a. 118,068,21 112,151,04 3.61%
8 5
Il Giornale Società Europea di 116,600,60 108,959,92 3.51%
Edizioni s.p.a.
1 8
Il Resto Del Carlino Poligrafici Editoriale s.p.a. 87,123,738 75,376,103 2.43%
Tuttosport Nuova Editoriale Sportiva
s.r.l.
72,366,047 67,927,409 2.19%
Source: Informativa Economica di Sistema (Media & Communications Industry
Database)
As usual, following are the tables showing the circulation of both national and
interregional daily newspapers.
86

TABLE 1
DAILY NEWSPAPERS: NATIONWIDE CIRCULATION – 2005
Name Publisher Gross
circulation
Net
circulation
% of
nationwide
circulation
Abruzzo Oggi Editoriale Abruzzo soc. coop. 785,099 697,864 0.2
Altoadige/Corriere delle Alpi/Trentino
S.e.t.a.
Società Editrice Tipografica Atesina
Società per Azioni, in Sigla S.e.t.a.
s.p.a.
Artigianato e Piccola-Media Imprese Editoriale Artigianato e Piccola
Impresa dell’Emilia Romagna
Avvenire
Emilia Romagna s.r.l.
Avvenire Nuova Editoriale Italiana
s.p.a.
16,759,231 16,079,352 0.46
1,299,510 1,227,245 0.04
50,028,340 46,661,211 1.33
Bresciaoggi Edizioni Brescia s.p.a. 6,816,685 5,764,000 0.16
City Bari City Italia s.p.a. 5,932,623 5,535,400 0.16
City Bologna City Italia s.p.a. 7,437,607 6,692,800 0.19
City Firenze City Italia s.p.a. 7,510,323 6,698,000 0.19
City Genova City Italia s.p.a. 3,958,567 3,411,000 0.10
City Milano City Italia s.p.a. 38,494,779 37,323,800 1.07
City Napoli City Italia s.p.a. 11,237,114 10,598,000 0.30
City Roma City Italia s.p.a. 41,739,496 40,104,400 1.15
City Torino City Italia s.p.a. 9,614,152 9,046,000 0.26
City Verona City Italia s.p.a. 2,862,550 2,587,500 0.07
Conquiste del Lavoro Conquiste del Lavoro s.r.l. 19,475,891 19,475,891 0.56
Corriere Cooperativa Editoriale Giornali 17,601,376 15,262,876 0.44
Associati a r.l.
Corriere Editoriale Quotidiani s.r.l. 6,383,800 6,383,800 0.18
Corriere Adriatico Società Editoriale Adriatica s.p.a. 10,357,054 9.385.633 0.27
Corriere del Giorno di Puglia e Lucania Cooperativa 3,661,282 3,563,220 0.10
Corriere del Mezzogiorno Editoriale Vesuvio s.r.l. 11,470,579 10,626,257 0.30
Corriere del Mezzogiorno - Bari e Puglia Editoriale Vesuvio s.r.l. 11,278,348 10,472,607 0.30
Corriere del Trentino Editoriale Trentino Alto Adige s.r.l. 3,304,924 2,823,935 0.08
87

Corriere del Veneto Editoriale Veneto s.r.l. 19,782,425 17,359,790 0.50
Corriere della Sera R.C.S. Editori s.p.a. 314,463,492 298,347,657 8.53
Corriere dell'Ato Adige Editoriale Trentino Alto Adige s.r.l. 2,404,697 1,846,501 0.05
Corriere dell’Irpinia Edizioni Proposta Sud 964,180 597,367 0.02
Corriere dello Sport Stadio Corriere dello Sport s.r.l. 151,193,542 142,132,978 4.06
Corriere di Caserta Libra Editrice Piccola soc.coop. a r.l. 5,153,291 4,639,624 0.13
Corriere di Como Editoriale s.r.l. 6,245,037 5,292,404 0.15
Corriere Economia - Corriere del Editoriale Vesuvio s.r.l. 1,692,824 1,596,623 0.05
Mezzogiorno
Corriere Mercantile Giornalisti e Poligrafici coop. r.l. 5,611,102 4,317,605 0.12
Cronaca Editoriale Argo Società Cooperativa 16,666,465 16,153,504 0.46
Cronache di Napoli Libra Editrice piccola soc. coop. a r.l. 6,752,672 6,035,044 0.17
Democrazia Cristiana Balena Bianca piccola s.c.a.r.l. 941,000 941,000 0.03
Die Neue Suedtiroler Tageszeitung Die Neue Suedtiroler Tageszeitung
s.r.l.“G.m.b.h”
2,908,540 2,770,040 0.08
Dolomiten Athesia Druck s.r.l. 17,947,558 16,932,342 0.48
Dossier News di Caserta Il Giornale Dossier soc. coop. d'Inf. Serv. e 909,500 909,500 0.03
Pub.Relaz.
Editoriale Oggi Nuova Editoriale Oggi s.r.l. 7,790,101 7,790,101 0.22
Europa Edizioni Dlm Europa 14,888,656 13,151,516 0.38
Finanza & Mercati Edizioni Vittoriane s.r.l. 11,310,863 11,310,863 0.32
Gazeta Shqiptare Società P.A. Editrice del Sud - 1,668,036 1,668,036 0.05
Edisud s.p.a.
Gazzetta Aste e Appalti Pubblici Editrice S.i.f.i.c. Società Italiana
Finanziaria Immobiliare e
Commerciale s.r.l.
1,121,833 1,089,333 0.03
Gazzetta del Lunedì Giornalisti e Poligrafici coop. r.l. 1,498,800 1,226,760 0.04
Gazzetta del Sud Società Editrice Siciliana 28,853,452 26,202,098 0.75
Gazzetta di Mantova Finegil Editoriale s.p.a. 15,215,912 14,563,716 0.42
Gazzetta di Reggio Finegil Editoriale s.p.a. 6,903,267 6,567,598 0.19
Giornale di Brescia Editoriale Bresciana s.p.a. 22,173,347 22,173,347 0.63
Giornale di Sicilia Giornale di Sicilia Editoriale 33,421,884 29,984,801 0.86
Poligrafica s.p.a.
Guida Normativa Il Sole 24 Ore Il Sole 24 Ore s.p.a. 4,679,150 4,302,240 0.12
Il Campanile Nuovo Società Cooperativa Editrice Il 918 669 0.00
88

Il Centro
Campanile Nuovo a r.l.
Finegil Editoriale s.p.a. 11,314,731 10,560,585 0.30
Il Cittadino Editoriale Laudense s.r.l. 4,371,400 3,497,120 0.10
Il Cittadino Oggi Editrice Grafic coop. Società
336,100 336,100 0.01
Cooperativa Di Giornalisti a r.l.
Il Corriere Editoriale 2000 s.r.l. 6,581,575 5,621,949 0.16
Il Crotonese
Editoriale Crotonese s.r.l. 620,119 549,828 0.02
Il Denaro Edizioni del Mediterraneo S. C.
Giornalistica a r.l.
2,933,151 2,706,521 0.08
Il Domani T. & P. Editori s.r.l. 2,527,900 2,527,900 0.07
Il Domani di Bologna Editoriale Bologna s.r.l. 1,485,700 1,485,700 0.04
Il Foglio Quotidiano Il Foglio Quotidiano s.c.a.r.l.
25,235,595 22,093,173 0.63
Il Gazzettino Società Editrice Padana s.p.a. 51,291,595 48,405,097 1.38
Il Giornale Società Europea di Edizioni s.p.a. 116,600,601 108,959,928 3.12
Il Giornale dell'Umbria Gruppo Editoriale Umbria 1819 s.r.l. 1,825,000 1,825,000 0.05
Il Giornale di Calabria Editoriale '91 S.c.r.l. 283,090 269,500 0.01
Il Giornale di Vicenza Società Athesis s.p.a. 19,880,900 18,618,200 0.53
Il Giornale Nuovo della Toscana Società Toscana di Edizioni s.p.a. 5,500,800 5,500,800 0.16
Il Giorno Poligrafici Editoriale s.p.a. 47,953,700 42,251,906 1.21
Il Lunedì De La Repubblica Gruppo Editoriale L'espresso s.p.a. 39,578,526 37,297,022 1.07
Il Manifesto Quotidiano Comunista Il Manifesto Cooperativa Editrice 29,624,371 28,284,008 0.81
s.c.r.l.
Il Mattino Edi.me. Edizioni Meridionali s.p.a. 44,164,006 41,956,265 1.20
Il Mattino di Padova Finegil Editoriale s.p.a. 14,425,109 13,727,584 0.39
Il Messaggero Il Messaggero s.p.a. 118,068,218 112,151,045 3.21
Il Nuovo Giornale di Bergamo Bergamo Iniziative Editoriali s.r.l. 2,114,959 1,762,466 0.05
Il Nuovo Riformista Edizioni Riformiste Pic. soc. coop a 9,361,508 9,361,508 0.27
r.l.
Il Piccolo Editoriale Fvg s.p.a. 16,782,970 15,978,870 0.46
Il Piccolo del Lunedì Editoriale Fvg s.p.a. 2,521,250 2,410,300 0.07
Il Quotidiano Finanziaria Editoriale s.r.l. 8,739,761 8,015,476 0.23
Il Quotidiano del Golfo soc. coop. a r.l. Giornalisti Stampa
Locale Ischia
121,600 115,300 0.00
89

Il Resto del Carlino Poligrafici Editoriale s.p.a 87,123,738 75,376,103 2.16
Il Romanista I Romanisti s.r.l. 5,520,715 4,502,712 0.13
Il Salernitano Arcadio Società Cooperativa 1,423,260 582,778 0.02
Il Sannio Quotidiano Pagine Sannite s.c.r.l. 3,683,254 2,928,079 0.08
Il Sardegna Quotidiani Sardi s.r.l. 19,598,511 17,909,642 0.51
Il Secolo XIX Società Edizioni e Pubblicazioni 51,252,370 46,860,797 1.34
s.p.a.
Il Sole 24 Ore Il Sole 24 Ore s.p.a. 164,046,118 149,961,113 4.29
Il Tempo Società Editrice Il Tempo s.p.a. 31,151,936 27,853,644 0.80
Il Tirreno Finegil Editoriale s.p.a. 41,477,775 37,541,569 1.07
Impresa Artigiana Editart s.r.l. 22,055 22,055 0.00
In Città Trieste e dintorni Imprese Tipografiche Venete s.p.a. 5,084,522 4,090,610 0.12
Incittà e dintorni Nuova Editoriale s.r.l. 3,469,515 2,864,800 0.08
In città Verona Nuova Editoriale s.r.l. 3,575,160 3,091,900 0.09
Italia Sera Giornalisti & Poligrafici Associati
s.c.r.l.
1,323,349 1,106,704 0.03
Italiaoggi Italia Oggi Editori Erinne s.r.l. 35,862,055 35,862,055 1.03
La Città-Quotidiano di Salerno e Provincia Editoriale La Città s.p.a. 4,124,911 3,632,482 0.10
La Cronaca Cooperativa Nuova Informazione a
r.l.
3,809,200 3,809,200 0.11
La discussione - Quotidiano dell'UDC Editrice Europa Oggi s.r.l. 2,938,500 2,584,400 0.07
La Gazzetta del Mezzogiorno Società P.A. Editrice del Sud -
Edisud s.p.a.
24,841,897 23,661,990 0.68
La Gazzetta del Norbarese Edisud S.p.a 1,687,384 1,579,593 0.05
La Gazzetta dello Sport R.C.S. Editori s.p.a. 203,989,829 192,274,272 5.50
La Gazzetta di Bari Società P.a. Editrice del Sud - Edisud
s.p.a.
11,062,743 10,667,948 0.31
La Gazzetta di Basilicata Società P.a. Editrice del Sud - Edisud
s.p.a.
2,174,000 1,968,231 0.06
La Gazzetta di Brindisi Società P.a. Editrice del Sud - Edisud
s.p.a.
1,777,090 1,667,841 0.05
La Gazzetta di Capitanata Società P.a. Editrice del Sud - Edisud 3,120,560 2,988,648 0.09
s.p.a.
La Gazzetta di Lecce Società P.a. Editrice del Sud - Edisud
s.p.a.
3,186,630 3,070,192 0.09
90

La Gazzetta di Taranto Società P.a. Editrice del Sud - Edisud
s.p.a.
1,833,490 1,719,537 0.05
La Nazione Poligrafici Editoriale s.p.a. 74,050,732 63,917,869 1.83
La Nuova Basilicata Alice Multimediale s.r.l. 1,174,955 1,174,955 0.03
La Nuova di Venezia e Mestre Finegil Editoriale s.p.a. 6,750,140 5,869,992 0.17
La Nuova Ferrara Finegil Editoriale s.p.a. 5,759,626 5,443,028 0.16
La Nuova Sardegna Editoriale La Nuova Sardegna s.p.a. 27,201,746 25,624,808 0.73
La Padania – La Voce del Nord Editoriale Nord soc. coop. a r.l. 19,914,215 18,920,972 0.54
La Prealpina La Prealpina s.r.l. 11,113,294 9,383,334 0.27
La Provincia La Provincia di Como Editoriale
s.p.a.
20,119,894 18,617,923 0.53
La Provincia S.e.C. Socetà Editoriale Cremonese
s.p.a.
10,149,290 10,149,290 0.29
La Provincia Pavese E.A.G. S.p.a. 8,910,385 8,472,430 0.24
La Provincia Quotidiano Effe Cooperativa Editoriale a r.l. 3,294,503 3,294,503 0.09
La Repubblica Gruppo Editoriale L'espresso s.p.a. 256,108,673 241,493,289 6.90
La Sicilia Domenico Sanfilippo Editore s.p.a. 28,404,439 26,445,629 0.76
La Stampa Editrice La Stampa s.p.a. 160,933,588 149,497,255 4.27
La Tribuna di Treviso Finegil Editoriale s.p.a. 9,066,131 8,545,413 0.24
La Verità Editoriale La Verità s.c. giorn. r.l. 2,370,320 1,945,839 0.06
La Voce della Città Taranto Le News della L'Editoriale s.r.l.
Sera
1,383,238 1,207,790 0.03
La Voce di Cerveteri Impegno Sociale Piccola soc. coop
giorn. a r.l.
709,286 562,625 0.02
La Voce di Mantova Vidiemme s.c.r.l. 2,051,800 2,051,800 0.06
La Voce di Romagna Editrice La Voce s.r.l. 6,949,659 5,149,659 0.15
La Voce Nuova Cooperativa Editoriale Informazione
Stampa C.E.I.S. soc. coop. a r.l.
2,000,090 1,091,551 0.03
La Voce Repubblicana Nuove Politiche Editoriali Picc. soc.
Coop Giorn. a r.l.
600,521 376,180 0.01
L'adige S.I.E. s.p.a. Società Iniziative 11,476,656 11,151,320 0.32
L'agenzia di Viaggi
Editoriali
Liberi Editori s.r.l. 650,923 650,923 0.02
L’Altro Fax Edigiornalisti - Società Cooperativa
Giornalistica a r.l.
121,300 121,300 0.00
91

L'arena Società Athesis s.p.a. 22,733,345 21,451,850 0.61
L'avanti! International Press s.c.r.l. 4,349,134 3,582,211 0.10
L'avvisatore Marittimo L'avvisatore Marittimo s.r.l. 443,250 352,546 0.01
L’Aco di Bergamo Sasaab D.p.a. 24,053,684 23,207,349 0.66
Leggo Sigma Editoriale s.p.a. 154,175,708 145,863,274 4.17
Liberazione Giornale Comunista M.r.c. s.r.l. 19,234,300 18,370,870 0.53
Libertà, Libertà Lunedì Settimo Numero di Stabilimento Tipografico Piacentino 13,667,770 12,848,965 0.37
Libertà
Sapa
L'indipendente Edizioni del Mezzogiorno s.r.l. 5,520,229 4,603,085 0.13
L'informatore Sportivo L'unione Sarda s.p.a. 19,598,761 19,035,821 0.54
L’Informazione Editoriale Tricolore s.r.l. 2,845,754 2,081,957 0.06
L’Irpinia Associazione L’irpinia 5,500 1,100 0.00
Lo Sportsman Cavalli & Corse Coedip s.c.r.l. 9,291,110 7,699,061 0.22
L'opinione delle Libertà Amici De L’opinione soc.coop.giorn. 1,459,643 1,112,642 0.03
a r.l.
Lucania Quotidiano di Vita Regionale Ditiesse S.C. a r.l. 274,907 266,900 0.01
L'Umanità Edizioni Riformiste s.c.r.l. 378,981 314,939 0.01
L'Unione Sarda L'unione Sarda s.p.a. 27,611,250 26,194,839 0.75
L'Unità Nuova Iniziativa Editoriale s.p.a. 50,070,300 44,415,520 1.27
Messaggero del Lunedì Editoriale Fvg s.p.a. 3,064,763 2,766,462 0.08
Messaggero Veneto Editoriale Fvg s.p.a. 21,247,144 19,115,465 0.55
Metro Edizioni Metro s.r.l. 111,342,294 109,159,112 3.12
Metropoli Day (Già Metropoli) Sette Mari piccola s.c.a.r.l. 1,168,700 1,168,700 0.03
Mf Milano Finanza Milano Finanza Editori s.p.a. 22,165,128 22,165,128 0.63
Metropolis Stampa Democratica 95 s.c.r.l. 2,463,377 2,463,377 0.07
Notizie Verdi (Agenzia Quotidiana Di
Informazione Dei Verdi Italiani)
Undicidue s.r.l. 14,873,800 14,873,800 0.43
Nuova Gazzetta di Caserta Edizioni Giornali Quotidiani Piccola
soc. coop. a r.l.
1,144,875 1,144,875 0.03
Nuova Gazzetta di Modena Finegil Editoriale s.p.a. 6,034,730 5,576,818 0.16
Nuovo Corriere Barisera Editoriale Giornalisti Associati 981,139 686,797 0.02
s.c.r.l.
Nuovo Oggi Editoriale Ciociaria Oggi s.r.l. 4,231,444 4,231,444 0.12
Nuovo Quotidiano di Puglia Alfa Editoriale s.r.l. 9,735,918 9,036,123 0.26
Opinione Nuove Libero Quotidiano C.e.l. Cooperativa Editoriale Libero 58,764,155 50,632,311 1.45
92

Piccola s.c.r.l.
Ore 12 Centro Stampa Regionale soc.coop a
r.l.
455,711 378,881 0.01
Ottopagine L'approdo s.r.l. 1,766,710 1,766,710 0.05
Primorski Dnevnik Prae Promozione Attività Editoriale s.r.l. 3,379,890 3,217,600 0.09
Puglia Press (Già Martina Sera) Promoset s.r.l. 1,752,000 1,752,000 0.05
Puglia Quotidiano di Vita Regionale Essepi s.c.a.r.l. 1,154,777 1,121,143 0.03
Qs - Quotidiano Sociale di Angeli Angeli Editori Picc. soc. coop. giorn.
a r.l.
731,700 613,200 0.02
Qs Quotidiano Sportivo Poligrafici Ed.le S.p.a 46,018,551 41,832,568 1.20
Quotidiano di Foggia e Bari Editoriale Nuova Comunicazione 7,800,000 6,800,000 0.19
s.r.l.
Quotidiano di Lecce, Brindisi, Taranto Alfa Editoriale s.r.l. 1,170 700 0.00
Quotidiano di Sicilia Ediservice s.r.l. 3,733,140 3,506,658 0.10
Rinascita Rinascita soc. coop. Ed a r.l. 5,136,563 4,727,063 0.14
Roma Edizioni del Roma soc. coop. a r.l. 7,223,418 6,684,792 0.19
Scuola e Insegnanti Editoriale Bm Italiana s.r.l. 369,500 369,500 0.01
Scuola S.n.a.l.s. Editoriale Bm Italiana s.r.l. 9,067,400 9,067,400 0.26
Secolo D'italia Secolo D'italia 6,890,257 6,076,684 0.17
Sicurezza Sociale Impegno Sociale piccola coop. giorn. 169,247 140,104 0.00
a r.l.
Staffetta Quotidiana Rip Rivista Italiana Petrolio s.r.l. 473,000 437,040 0.01
Tuttomercato Alfa Editoriale s.r.l. 2,460,840 2,347,665 0.07
Tuttosport Nuova Editoriale Sportiva s.r.l. 72,366,047 67,927,409 1.94
Ultime Notizie Reggio Giornale di Reggio s.r.l. 2,516,349 2,510,784 0.07
Vivere Domenico Sanfilippo Editore s.p.a. 4,205,243 3,915,593 0.11
3,755,659,58
7
3,497,548,406 100.00
93

TABLE 2
DAILY NEWSPAPERS: NORTH-WEST INTERREGIONAL CIRCULATION – 2005
PIEDMONT, VALLE D’AOSTA, LOMBARDY, LIGURIA
Name Publisher Gross Net circulation % of circulation in
circulation
the area
Avvenire Avvenire Nuova Editoriale Italiana s.p.a. 50,028,340 46,661,211 2.74
Bresciaoggi Edizioni Brescia s.p.a. 6,816,685 5,764,000 0.34
City Bari City Italia s.p.a. 5,932,623 5,535,400 0.33
City Bologna City Italia s.p.a. 7,437,607 6,692,800 0.39
City Firenze City Italia s.p.a. 7,510,323 6,698,000 0.39
City Genova City Italia s.p.a. 3,958,567 3,411,000 0.20
City Milano City Italia s.p.a. 38,494,779 37,323,800 2.19
City Napoli City Italia s.p.a. 11,237,114 10,598,000 0.62
City Roma City Italia s.p.a. 41,739,496 40,104,400 2.36
City Torino City Italia s.p.a. 9,614,152 9,046,000 0.53
City Verona City Italia s.p.a. 2,862,550 2,587,500 0.15
Corriere della Sera R.C.S. Editori s.p.a. 314,463,492 298,347,657 17.55
Corriere di Como Editoriale s.r.l. 6,245,037 5,292,404 0.31
Corriere Mercantile Giornalisti e Poligrafici coop. r.l. 5,611,102 4,317,605 0.25
Cronaca Editoriale Argo Società Cooperativa 16,666,465 16,153,504 0.95
Finanza & Mercati Edizioni Vittoriane s.r.l. 11,310,863 11,310,863 0.67
Gazzetta di Mantova Finegil Editoriale s.p.a. 15,215,912 14,563,716 0.86
Giornale di Brescia Editoriale Bresciana s.p.a. 22,173,347 22,173,347 1.30
Il Cittadino Editoriale Laudense s.r.l. 4,371,400 3,497,120 0.21
Il Foglio Quotidiano Il Foglio Quotidiano s.c.a.r.l. 25,235,595 22,093,173 1.30
Il Giornale Società Europea di Edizioni s.p.a. 116,600,601 108,959,928 6.41
Il Giorno Poligrafici Editoriale s.p.a. 47,953,700 42,251,906 2.48
Il Nuovo Giornale di Bergamo Bergamo Iniziative Editoriali s.r.l. 2,114,959 1,762,466 0.10
Il Secolo XIX Società Edizioni e Pubblicazioni s.p.a. 51,252,370 46,860,797 2.76
Il Sole 24 Ore Il Sole 24 Ore s.p.a. 164,046,118 149,961,113 8.82
Italiaoggi Italia Oggi Editori Erinne s.r.l. 35,862,055 35,862,055 2.11
La Cronaca Cooperativa Nuova Informazione a r.l. 3,809,200 3,809,200 0.22
La Gazzetta dello Sport R.C.S. Editori s.p.a. 203,989,829 192,274,272 11.31
La Padania – La Voce del Nord Editoriale Nord soc. coop. a r.l. 19,914,215 18,920,972 1.11
La Prealpina La Prealpina s.r.l. 11,113,294 9,383,334 0.55
La Provincia La Provincia di Como Editoriale s.p.a. 20,119,894 18,617,923 1.09
La Provincia S.e.C. Socetà Editoriale Cremonese s.p.a. 10,149,290 10,149,290 0.60
La Provincia Pavese E.A.G. S.p.a. 8,910,385 8,472,430 0.50
La Stampa Editrice La Stampa s.p.a. 160,933,588 149,497,255 8.79
La Voce di Mantova Vidiemme s.c.r.l. 2,051,800 2,051,800 0.12
94

L'avvisatore Marittimo L'avvisatore Marittimo s.r.l. 443,250 352,546 0.02
L’Eco di Bergamo Sasaab D.p.a. 24,053,684 23,207,349 1.36
Lo Sportsman Cavalli & Corse Coedip s.c.r.l. 9,291,110 7,699,061 0.45
Metro Edizioni Metro s.r.l. 111,342,294 109,159,112 6.42
Mf Milano Finanza Milano Finanza Editori s.p.a. 22,165,128 22,165,128 1.30
Opinione Nuove Libero Quotidiano C.e.l. Cooperativa Editoriale Libero Piccola
s.c.r.l.
58,764,155 50,632,311 2.98
Qs Quotidiano Sportivo
Poligrafici Ed.le S.p.a 46,018,551 41,832,568 2.46
Tuttosport Nuova Editoriale Sportiva s.r.l. 72,366,047 67,927,409 3.99
Ultime Notizie Reggio Giornale di Reggio s.r.l. 2,516,349 2,510,784 0.15
Vivere Domenico Sanfilippo Editore s.p.a. 4,205,243 3,915,593 0.23
1,816,912,558 1,700,408,102 100.00
95

TABLE 3
DAILY NEWSPAPERS: NORTH-EST INTERREGIONAL CIRCULATION – 2005
TRENTINO ALTO ADIGE, VENETO, FRIULI VENEZIA GIULIA, EMILIA ROMAGNA
Name Publisher Gross Net circulation % of circulation in
circulation
the area
Altoadige/Corriere delle Alpi/Trentino S.e.t.a. Società Editrice Tipografica Atesina Società
per Azioni, in Sigla S.e.t.a. s.p.a.
16,759,231 16,079,352 4.30
Artigianato e Piccola-Media Imprese Editoriale Artigianato e Piccola Impresa
dell’Emilia Romagna Emilia Romagna s.r.l.
1,299,510 1,227,245 0.33
Corriere Cooperativa Editoriale Giornali Associati a
r.l.
17,601,376 15,262,876 4.09
Corriere del Trentino Editoriale Trentino Alto Adige s.r.l. 3,304,924 2,823,935 0.76
Corriere del Veneto Editoriale Veneto s.r.l. 19,782,425 17,359,790 4.65
Corriere dell'Ato Adige Editoriale Trentino Alto Adige s.r.l. 2,404,697 1,846,501 0.49
Die Neue Suedtiroler Tageszeitung Die Neue Suedtiroler Tageszeitung 2,908,540 2,770,040 0.74
Dolomiten
s.r.l.“G.m.b.h”
Athesia Druck s.r.l. 17,947,558 16,932,342 4.53
Gazzetta del Lunedì Giornalisti e Poligrafici coop. r.l. 1,498,800 1,226,760 0.33
Gazzetta di Reggio Finegil Editoriale s.p.a. 6,903,267 6,567,598 1.76
Il Domani di Bologna Editoriale Bologna s.r.l. 1,485,700 1,485,700 0.40
Il Gazzettino Società Editrice Padana s.p.a. 51,291,595 48,405,097 12.96
Il Giornale di Vicenza Società Athesis s.p.a. 19,880,900 18,618,200 4.98
Il Mattino di Padova Finegil Editoriale s.p.a. 14,425,109 13,727,584 3.67
Il Piccolo Editoriale Fvg s.p.a. 16,782,970 15,978,870 4.28
Il Piccolo del Lunedì Editoriale Fvg s.p.a. 2,521,250 2,410,300 0.65
Il Resto del Carlino Poligrafici Editoriale s.p.a 87,123,738 75,376,103 20.17
In Città Trieste e dintorni Imprese Tipografiche Venete s.p.a. 5,084,522 4,090,610 1.09
In città e dintorni Nuova Editoriale s.r.l. 3,469,515 2,864,800 0.77
In città Verona Nuova Editoriale s.r.l. 3,575,160 3,091,900 0.83
La Nuova di Venezia e Mestre Finegil Editoriale s.p.a. 6,750,140 5,869,992 1.57
La Nuova Ferrara Finegil Editoriale s.p.a. 5,759,626 5,443,028 1.46
La Tribuna di Treviso Finegil Editoriale s.p.a. 9,066,131 8,545,413 2.29
La Voce di Romagna Editrice La Voce s.r.l. 6,949,659 5,149,659 1.38
La Voce Nuova Cooperativa Editoriale Informazione Stampa
C.E.I.S. soc. coop. a r.l.
2,000,090 1,091,551 0.29
L'Adige S.I.E. s.p.a. Società Iniziative Editoriali 11,476,656 11,151,320 2.98
L'Arena Società Athesis s.p.a. 22,733,345 21,451,850 5.74
Libertà, Libertà Lunedì Settimo Numero di Libertà Stabilimento Tipografico Piacentino Sapa 13,667,770 12,848,965 3.44
L’Informazione Editoriale Tricolore s.r.l. 2,845,754 2,081,957 0.56
96

Messaggero del Lunedì Editoriale Fvg s.p.a. 3,064,763 2,766,462 0.74
Messaggero Veneto Editoriale Fvg s.p.a. 21,247,144 19,115,465 5.12
Metropoli Day (Già Metropoli) Sette Mari piccola s.c.a.r.l. 1,168,700 1,168,700 0.31
Nuova Gazzetta di Modena Finegil Editoriale s.p.a. 6,034,730 5,576,818 1.49
Primorski Dnevnik Prae Promozione Attività Editoriale s.r.l. 3,379,890 3,217,600 0.86
412,195,185 373,624,383 100.00
97

TABLE 4
DAILY NEWSPAPERS: CENTRE INTERREGIONAL CIRCULATION – 2005
TUSCANY, MARCHES, UMBRIA, LAZIO, ABRUZZO
Name Publisher Gross Net circulation % of circulation
circulation
in the area
Abruzzo Oggi Editoriale Abruzzo soc. coop. 785,099 697,864 0.07
Conquiste del Lavoro Conquiste del Lavoro s.r.l. 19,475,891 19,475,891 1.85
Corriere Editoriale Quotidiani s.r.l. 6,383,800 6,383,800 0.61
Corriere Adriatico Società Editoriale Adriatica s.p.a. 10,357,054 9.385.633 0.89
Corriere dello Sport Stadio Corriere dello Sport s.r.l. 151,193,542 142,132,978 13.49
Editoriale Oggi Nuova Editoriale Oggi s.r.l. 7,790,101 7,790,101 0.74
Europa Edizioni Dlm Europa 14,888,656 13,151,516 1.25
Gazzetta Aste e Appalti Pubblici Editrice S.i.f.i.c. Società Italiana Finanziaria
Immobiliare e Commerciale s.r.l.
1,121,833 1,089,333 0.10
Guida Normativa Il Sole 24 Ore Il Sole 24 Ore s.p.a. 4,679,150 4,302,240 0.41
Il Campanile Nuovo
Società Cooperativa Editrice Il Campanile
Nuovo a r.l.
918 669 0.00
Il Centro Finegil Editoriale s.p.a. 11,314,731 10,560,585 1.00
Il Cittadino Oggi Editrice Grafic coop. Società Cooperativa Di 336,100 336,100 0.03
Giornalisti a r.l.
Il Corriere Editoriale 2000 s.r.l. 6,581,575 5,621,949 0.53
Il Giornale dell'Umbria Gruppo Editoriale Umbria 1819 s.r.l. 1,825,000 1,825,000 0.17
Il Giornale Nuovo della Toscana Società Toscana di Edizioni s.p.a. 5,500,800 5,500,800 0.52
Il Lunedì De La Repubblica Gruppo Editoriale L'espresso s.p.a. 39,578,526 37,297,022 3.54
Il Manifesto Quotidiano Comunista Il Manifesto Cooperativa Editrice s.c.r.l. 29,624,371 28,284,008 2.68
Il Messaggero Il Messaggero s.p.a. 118,068,218 112,151,045 10.65
Il Nuovo Riformista Edizioni Riformiste Pic. soc. coop a r.l. 9,361,508 9,361,508 0.89
Il Romanista I Romanisti s.r.l. 5,520,715 4,502,712 0.43
Il Tempo Società Editrice Il Tempo s.p.a. 31,151,936 27,853,644 2.64
Il Tirreno Finegil Editoriale s.p.a. 41,477,775 37,541,569 3.56
Impresa Artigiana Editart s.r.l. 22,055 22,055 0.00
Italia Sera Giornalisti & Poligrafici Associati s.c.r.l. 1,323,349 1,106,704 0.11
La Discussione - Quotidiano dell'UDC Editrice Europa Oggi s.r.l. 2,938,500 2,584,400 0.25
La Nazione Poligrafici Editoriale s.p.a. 74,050,732 63,917,869 6.07
La Provincia Quotidiano Effe Cooperativa Editoriale a r.l. 3,294,503 3,294,503 0.31
La Repubblica Gruppo Editoriale L'espresso s.p.a. 256,108,673 241,493,289 22.92
La Voce di Cerveteri Impegno Sociale Piccola soc. coop giorn. a 709,286 562,625 0.05
r.l.
L'agenzia di Viaggi Liberi Editori s.r.l. 650,923 650,923 0.06
L'avanti! International Press s.c.r.l. 4,349,134 3,582,211 0.34
98

Leggo Sigma Editoriale s.p.a. 154,175,708 145,863,274 13.85
Liberazione Giornale Comunista M.r.c. s.r.l. 19,234,300 18,370,870 1.74
L'opinione delle Libertà Amici De L’opinione soc.coop.giorn. a r.l. 1,459,643 1,112,642 0.11
L'Umanità Edizioni Riformiste s.c.r.l. 378,981 314,939 0.03
L'Unità Nuova Iniziativa Editoriale s.p.a. 50,070,300 44,415,520 4.22
Notizie Verdi (Agenzia Quotidiana Di Informazione Undicidue s.r.l. 14,873,800 14,873,800 1.41
Dei Verdi Italiani)
Nuovo Oggi Editoriale Ciociaria Oggi s.r.l. 4,231,444 4,231,444 0.40
Ore 12 Centro Stampa Regionale soc.coop a r.l. 455,711 378,881 0.04
Qs - Quotidiano Sociale di Angeli Angeli Editori Picc. soc. coop. giorn. a r.l. 731,700 613,200 0.06
Rinascita Rinascita soc. coop. Ed a r.l. 5,136,563 4,727,063 0.45
Scuola e Insegnanti Editoriale Bm Italiana s.r.l. 369,500 369,500 0.04
Scuola S.n.a.l.s. Editoriale Bm Italiana s.r.l. 9,067,400 9,067,400 0.86
Secolo D'italia Secolo D'italia 6,890,257 6,076,684 0.58
Sicurezza Sociale Impegno Sociale piccola coop. giorn. a r.l. 169,247 140,104 0.01
Staffetta Quotidiana Rip Rivista Italiana Petrolio s.r.l. 473,000 437,040 0.04
1,128,182,008 1,053,452,907 100.00
99

TABLE 5
DAILY NEWSPAPERS: INTERREGIONAL AREA – SOUTH CIRCULATION – 2005
MOLISE, CAMPANIA, APULIA, BASILICATA, CALABRIA, SICILY, SARDINIA
Name Publisher Gross Net circulation % of circulation in
circulation
the area
Corriere del Giorno di Puglia e Lucania Cooperativa 3,661,282 3,563,220 0.96
Corriere del Mezzogiorno Editoriale Vesuvio s.r.l. 11,470,579 10,626,257 2.87
Corriere del Mezzogiorno - Bari e Puglia Editoriale Vesuvio s.r.l. 11,278,348 10,472,607 2.83
Corriere dell’Irpinia Edizioni Proposta Sud 964,180 597,367 0.16
Corriere di Caserta Libra Editrice Piccola soc.coop. a r.l. 5,153,291 4,639,624 1.25
Corriere Economia - Corriere del Mezzogiorno Editoriale Vesuvio s.r.l. 1,692,824 1,596,623 0.43
Cronache di Napoli Libra Editrice piccola soc. coop. a r.l. 6,752,672 6,035,044 1.63
Democrazia Cristiana Balena Bianca piccola s.c.a.r.l. 941,000 941,000 0.25
Dossier News di Caserta Il Giornale Dossier soc. coop. d'Inf. Serv. e Pub.Relaz. 909,500 909,500 0.25
Gazeta Shqiptare Società P.A. Editrice del Sud - Edisud s.p.a. 1,668,036 1,668,036 0.45
Gazzetta del Sud Società Editrice Siciliana 28,853,452 26,202,098 7.08
Giornale di Sicilia Giornale di Sicilia Editoriale Poligrafica
s.p.a.
33,421,884 29,984,801 8.10
Il Crotonese
Editoriale Crotonese s.r.l. 620,119 549,828 0.15
Il Denaro Edizioni del Mediterraneo S. C. 2,933,151 2,706,521 0.73
Il Domani
Giornalistica a r.l.
T. & P. Editori s.r.l. 2,527,900 2,527,900 0.68
Il Giornale di Calabria Editoriale '91 S.c.r.l. 283,090 269,500 0.07
Il Mattino Edi.me. Edizioni Meridionali s.p.a. 44,164,006 41,956,265 11.34
Il Quotidiano Finanziaria Editoriale s.r.l. 8,739,761 8,015,476 2.17
Il Quotidiano del Golfo soc. coop. a r.l. Giornalisti Stampa Locale
Ischia
121,600 115,300 0.03
Il Salernitano Arcadio Società Cooperativa 1,423,260 582,778 0.16
Il Sannio Quotidiano Pagine Sannite s.c.r.l. 3,683,254 2,928,079 0.79
Il Sardegna Quotidiani Sardi s.r.l. 19,598,511 17,909,642 4.84
La Città-Quotidiano di Salerno e Provincia Editoriale La Città s.p.a. 4,124,911 3,632,482 0.98
La Gazzetta del Mezzogiorno Società P.A. Editrice del Sud - Edisud s.p.a. 24,841,897 23,661,990 6.39
La Gazzetta del Norbarese
Edisud S.p.a 1,687,384 1,579,593 0.43
La Gazzetta di Bari Società P.a. Editrice del Sud - Edisud s.p.a. 11,062,743 10,667,948 2.88
La Gazzetta di Basilicata Società P.a. Editrice del Sud - Edisud s.p.a. 2,174,000 1,968,231 0.53
La Gazzetta di Brindisi Società P.a. Editrice del Sud - Edisud s.p.a. 1,777,090 1,667,841 0.45
La Gazzetta di Capitanata Società P.a. Editrice del Sud - Edisud s.p.a. 3,120,560 2,988,648 0.81
100

La Gazzetta di Lecce Società P.a. Editrice del Sud - Edisud s.p.a. 3,186,630 3,070,192 0.83
La Gazzetta di Taranto Società P.a. Editrice del Sud - Edisud s.p.a. 1,833,490 1,719,537 0.46
La Nuova Basilicata Alice Multimediale s.r.l. 1,174,955 1,174,955 0.32
La Nuova Sardegna Editoriale La Nuova Sardegna s.p.a. 27,201,746 25,624,808 6.92
La Sicilia Domenico Sanfilippo Editore s.p.a. 28,404,439 26,445,629 7.15
La Verità Editoriale La Verità s.c. giorn. r.l. 2,370,320 1,945,839 0.53
La Voce della Città Taranto Le News della Sera L'Editoriale s.r.l. 1,383,238 1,207,790 0.33
La Voce Repubblicana Nuove Politiche Editoriali Picc. soc. Coop
Giorn. a r.l.
600,521 376,180 0.10
L’Altro Fax
Edigiornalisti - Società Cooperativa 121,300 121,300 0.03
Giornalistica a r.l.
L'indipendente Edizioni del Mezzogiorno s.r.l. 5,520,229 4,603,085 1.24
L'informatore Sportivo L'unione Sarda s.p.a. 19,598,761 19,035,821 5.14
L’Irpinia Associazione L’irpinia 5,500 1,100 0.00
Lucania Quotidiano di Vita Regionale Ditiesse S.C. a r.l. 274,907 266,900 0.07
L'Unione Sarda L'unione Sarda s.p.a. 27,611,250 26,194,839 7.08
Metropolis Stampa Democratica 95 s.c.r.l. 2,463,377 2,463,377 0.67
Nuova Gazzetta di Caserta Edizioni Giornali Quotidiani Piccola soc. 1,144,875 1,144,875 0.31
coop. a r.l.
Nuovo Corriere Barisera Editoriale Giornalisti Associati s.c.r.l. 981,139 686,797 0.19
Nuovo Quotidiano di Puglia Alfa Editoriale s.r.l. 9,735,918 9,036,123 2.44
Ottopagine L'approdo s.r.l. 1,766,710 1,766,710 0.48
Puglia Press (Già Martina Sera) Promoset s.r.l. 1,752,000 1,752,000 0.47
Puglia Quotidiano di Vita Regionale Essepi s.c.a.r.l. 1,154,777 1,121,143 0.30
Quotidiano di Foggia e Bari Editoriale Nuova Comunicazione s.r.l. 7,800,000 6,800,000 1.84
Quotidiano di Lecce, Brindisi, Taranto Alfa Editoriale s.r.l. 1,170 700 0.00
Quotidiano di Sicilia Ediservice s.r.l. 3,733,140 3,506,658 0.95
Roma Edizioni del Roma soc. coop. a r.l.
7,223,418 6,684,792 1.81
Tuttomercato Alfa Editoriale s.r.l. 2,460,840 2,347,665 0.63
399,154,935 370,063,014 100.00
101

Magazines
Data analysis carried out for weekly magazines for 2004, with reference to the
top magazines in terms of circulation, shows an average setback of copies sold
compared to the previous year of about 2%.
As regards monthly magazines, the sample extrapolated from the Informativa
economica di sistema (Media & Communications Industry Database), annually
transmitted by operators in 2004 shows a substantial stability of sales compared to
2003.
In 2005, the analysis of revenues from the sale of copies net of collateral
products, shows a 1.5% decrease compared to 2004.
As pointed out for daily newspapers, the contribution from the sale of collateral
products appears as significant. The overall value is about 29.75% of the revenues from
circulation.
Unlike daily newspapers, by making a comparison between the last two financial
years, the figure concerning revenues for optional products increased significantly
(+8.79%). This can be explained by the increased integration of the collateral publishing
product in magazines, mainly in specialized ones.
Also in magazines the higher share of revenues from the sale of collateral
products refers to the book sector (50.51% in 2005). In 2005, the significant increase -
compared to 2004 - of the digital video product (+20%) is to be pointed out.
In 2005, revenues from the sale of advertising spaces show an average increase
by 1%. The growth rate, below expectations, is due to the unspectacular results of some
among the leading publishing companies of magazines such as Arnoldo Mondatori
Editore, RCS Periodici, Hachette Rusconi which, in 2005, recorded a decrease in the
revenues from the sale of advertising spaces on their magazines.
1.2.5. Advertising
The international and European framework
In 2005, with a 4.9% growth, worldwide advertising investments exceeded 300
billion euros (table 1.23.). The performance was therefore good, even if in 2004 the
growth was 7.4%.
With reference to each geographical area, North America and Europe, the most
significant markets, which together make up for the 70% of the total investments
worldwide, show growth rates of 3% and 3.7% respectively, a bit lower than the
average rate, which was positively influenced by the increased dynamism of the areas
(Latin America +16%, Africa and the Middle East +17%) characterized by much less
developed situations as to the advertising market. In terms of value, North America
records the higher increase with a growth of 4 billion euros.
102

Table 1.23. Advertising investments by geographical area (€ billion)
2003 2004 2005
North America 126.9 134.6 138.6
Europe 78.7 83.7 86.8
Asia\Oceania 59.2 63.0 66.5
Latin America 11.0 12.4 14.4
Africa and Middle East 11.4 14.5 17.0
Total 287.0 308.3 323.3
Source: processing on Zenith Optimedia data
The breakdown of investments by geographical area (table 1.24.) shows an
overall stability in the period under examination. In 2005, North America confirms its
leadership in investments with a share of 42.9%. Investments in Europe show a small
decrease whereas the share for the Asian area stays steady. Vice versa, the share of less
developed areas (Latin America, Africa and the Middle East) is slightly up: in 2005
these areas total almost 10% of overall investments.
Table 1.24. Investment breakdown by geographical area (%)
2003 2004 2005
North America 44.2 43.7 42.9
Europe 27.4 27.1 26.8
Asia\Oceania 20.6 20.5 20.6
Latin America 3.8 4.0 4.5
Africa and Middle East 4.0 4.7 5.2
Total 100.0 100.0 100.0
Source: processing on Zenith Optimedia data
The breakdown of investments by medium for Europe (table 1.25.) shows that
the press – as a whole – confirms itself as the main medium in investment obtained
reaching 43 billion euros in 2005. However, if data on daily newspapers and magazines
are considered separately, starting from 2003, television outpaced daily press in terms
of investments volume. The total growth rate of investment was 3.7% in 2005, with a
drop compared to the result in 2004 (6.4%).
Among traditional media, radio proves to be the most dynamic one with a 5.2%
growth, whereas the Internet shows growth rates considerably higher than other media,
reaching – in the period taken into account - an average growth of 38.6%.
103

Table 1.25. Advertising investments in Europe (€ billion)
2003 2004 2005
Television 26.1 28.2 29.1
Press, of which 40.7 42.4 43.3
- daily newspapers 25.4 26.5 27.2
- magazines 15.3 15.9 16.2
Outdoor advertising 5.3 5.5 5.7
Radio 4.4 4.8 5.1
Internet 1.5 2.0 2.8
Cinema 0.7 0.7 0.8
Total 78.7 83.7 86.8
Source: processing on Zenith Optimedia
The analysis of the percentage composition of investment shares (table 1.26.)
shows some stability in investors’ preferences, in particular, television remains stable,
the press records a slight drop, whereas the Internet increases significantly its market
share, even if it remains - as total weight - marginal compared to traditional media. As
against values in 2003 and 2004, outdoor advertising, radio and cinema do not record
any change as to their position in the period taken into consideration.
Table 1.26. Advertising investments in Europe
2003 2004 2005
Television 33.2 33.7 33.5
Daily newspapers 32.3 31.7 31.3
Magazines 19.5 19.0 18.6
Outdoor advertising 6.7 6.6 6.6
Radio 5.6 5.7 5.8
Internet 1.9 2.4 3.2
Cinema 0.9 0.9 0.9
Total 100.0 100.0 100.0
Source: processing on Zenith Optimedia data
Investments in the Italian market
In 2005 investments in the Italian market (table 1.27.) 6 reached 8.6 billion euros,
and in the period taken into consideration they account for about 10% of the total value
of advertising investments at European level. The overall growth of investments almost
6
Researches to census investments on the Italian market may have – also due to the different methodological approaches -
differences in terms of investments value which, in some cases, can be significant. However, for the analysis of the Italian market it
was deemed as appropriate to use, in the first instance, the same source reported for the assessment of the world and European
environment in order to be able to make international comparisons on a homogeneous basis.
104

eached 3%. Television stands out as the medium which catalyses more than all the
others investors’ choices with 4.7 million euros in 2005. As it happens at European
level, for the press, daily newspapers prevail even if with a 2.4% growth as against
4.4% of magazines.
The figure for outdoor advertising stays steady for the period. After significant
growth rates in the 2003-2004 two-years’ period, radio shows some difficulties in 2005,
year in which investments stay essentially steady. Advertising through cinema channels
is firm as well, whereas, even starting from low values, the Internet shows exponential
growth rates (+4% in 2003, +7% in 2004, +17% in 2005).
Table 1.27. Advertising investments in Italy (€ million)
2003 2004 2005
Television 4,224 4,647 4,770
Press, of which 2,681 2,711 2,803
- daily newspapers 1,581 1,606 1,649
- magazines 1,100 1,105 1,154
Outdoor advertising 306 312 322
Radio 440 529 530
Internet 103 111 129
Cinema 70 76 70
Total 7,824 8,386 8,624
Source: processing on Zenith Optimedia data
The analysis of the differential between Italian and European growth rates (table
1.28.) shows that, on average, in 2005, investments in Italy increased at a lower rate
than European ones. This trend concerns also investments with good performance in the
Italian market, such as those in the Internet, which, however, compared to the European
situation, have a slower growth from a structural viewpoint (-34% in 2003, -30% in
2004, -22% in 2005).
Vice versa, for press and television the average performance is in line with the
other European countries. Investments in radio and cinema have on average growth
rates higher than European ones even considering the drop recorded in 2005.
Table 1.28. Differential in growth rates between Italy and Europe
2003 2004 2005
Television 2.1 2.0 -0.4
Daily newspapers 0.6 -2.9 0.0
Magazines 1.9 -3.0 2.5
Outdoor advertising 1.4 -2.6 -1.1
Radio 7.3 10.5 -5.0
Internet -34.6 -30.9 -22.6
105

Cinema 12.0 7.6 -11.2
Total 2.2 0.8 -0.9
Source: processing on Zenith Optimedia data
The breakdown of investments (table 1.29.) 7
shows that television receives more than 50% of total investments, unlike what happens
in Europe where this value is 33%, with a differential of 20 percentage points compared
to the press which is the second channel of investment. In a mirror-like way the press,
which in Europe obtains about 50% of advertising resources, records values slightly
over 30% in Italy.
Shares of investments obtained by outdoor
advertising and radio are around 6%, a figure in line with the European average. The
Internet with a share of 1.4% is well below the European average where advertising
investments on the net cover 3.4% of the total value.
Table 1.29. Advertising investments in Italy (%)
2003 2004 2005
Television 52.3 53.6 53.6
Press 33.9 32.1 32.2
Outdoor advertising 6.1 6.0 5.9
Radio 5.6 6.1 6.0
Internet 1.2 1.2 1.4
Cinema 0.9 0.9 0.8
Total 100.0 100.0 100.0
Source: processing on Zenith Optimedia data
From the analysis of the investments by product category (tables 1.30 and 1.31.),
first of all, it appears some stability in the customers portfolio of the various means of
communication. Food constitutes the main source of revenue, contributing for nearly
15% to overall investments, followed by cars with 12% and TLC services having a
share of 8%.
From the examination of the portfolio composition of each means, it emerges
that food invests most of its resources in television (87%) and weights about 22% on the
overall investments obtained by this mean. Whereas other investors, such as those of the
clothing sector, are more oriented towards magazines and outdoor advertising.
7 Since some differences in the market shares of the various media according to the research used are observed, in order to process
these data an average value resulting from Zenith Optimedia and UPA researches has been calculated.
106

Table 1.30. Percentage breakdown of investments by product categories (product
categories/means) 2004
Total TV Radio Dailies Magazines Outdoor
Advertising
Cinema
Food 14.7 21.7 6.5 1.8 5.9 7.1 15.3
Cars 12.1 11.7 23.5 14.7 6.1 10.7 22.0
Telecommunication
s
8.0 9.9 6.3 5.9 3.1 11.1 8.6
Beverage /Alcohol 6.9 9.6 5.0 1.8 2.2 9.1 9.1
Media/Publishing 6.6 7.4 18.0 4.4 2.3 6.3 6.0
Clothing 5.5 2.7 2.3 3.0 18.8 14.8 6.5
Toiletries 4.3 6.3 1.5 0.4 3.0 0.8 3.3
Grooming 4.1 3.5 1.8 0.8 11.5 1.4 3.0
Household 3.8 5.8 0.7 0.3 1.9 0.6 0.2
Finance
Insurance
& 3.6 3.0 5.0 6.6 2.1 3.6 4.8
Other categories 30.4 18.4 29.4 60.4 43.0 34.5 21.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: processing on Nielsen data
Table 1.31. Percentage breakdown of investments by product categories
(means/product categories) 2004
TV Radio Dailies Magazines Outdoor
advertising
Cinema Total
Food 87.1 2.3 2.1 6.1 1.2 1.2 100.0
Cars 56.9 10.1 21.0 7.7 2.2 2.1 100.0
Telecommunication
s
72.7 4.1 12.7 5.8 3.4 1.3 100.0
Beverage /Alcohol 82.1 3.7 4.5 4.8 3.3 1.6 100.0
Media/Publishing 65.8 14.1 11.4 5.3 2.4 1.1 100.0
Clothing 28.5 2.2 9.5 51.8 6.7 1.4 100.0
Toiletries 84.8 1.8 1.6 10.5 0.5 0.9 100.0
Grooming 50.2 2.3 3.3 42.4 0.8 0.9 100.0
Household 89.7 0.9 1.2 7.6 0.4 0.1 100.0
Finance &
Insurance
48.8 7.1 31.2 8.9 2.5 1.5 100.0
Source: processing Estimates on Nielsen data
107

The investment breakdown in 2005 (tables 1.32. and 1.33.) shows that the first
ten product categories remained unchanged compared to 2004. The relative weight of
each category is essentially the same; as a matter of fact, there is simply the growth of
investments by the Finance and Insurance sector which goes up from the tenth to the
seventh place. At quality level, Nielsen analyses for 2005 show that investments on the
Internet, even with high growth rates, remain marginal in the choices of most investors.
A different sign arrives from communication and finance operators, namely
those offering high technology products and oriented towards a target of young people.
During 2005, they started to increase the share of advertising revenues for the Internet
sector.
Table 1.32. Percentage breakdown of investments by product categories (product
categories/means) 2005
Total TV Radio Dailie
s
Magazine
s
Outdoor
advertisin
g
Cinem
a
Internet
Food 13.9 20.7 6.0 1.8 6.5 5.8 17.9 1.5
Cars 11.9 11.5 21.8 15.5 5.6 12.5 28.3 4.9
Tlc* 8.7 11.0 6.9 5.3 3.8 12.1 5.4 12.1
Media/Publishin
g
6.7 7.4 17.9 4.8 2.5 5.0 2.8 10.9
Beverage
/Alcohol
6.1 8.7 5.1 1.7 2.0 4.2 7.4 1.3
Clothing 5.5 2.2 2.1 3.7 19.7 17.7 5.6 1.0
Finance & 4.8 3.9 8.2 7.5 3.1 3.0 6.1 11.3
Insurance
Toiletries 4.0 5.9 1.5 0.3 2.8 0.7 2.6 0.8
Grooming 4.0 3.8 1.9 0.7 10.3 0.7 2.5 0.9
Household 3.6 5.6 1.3 0.3 1.5 0.3 0.7 0.2
Other categories 30.9 19.3 27.3 58.4 42.0 38.0 20.7 55.1
Total 100. 100. 100.0 100.0 100.0 100.0 100.0 100.0
0 0
Source: Estimates on Nielsen data | * Telecommunications
108

Table 1.33. Percentage breakdown of investments by product categories
(means/product categories) 2005
TV Radio Dailie
s
Magazine
s
Outdoor
Advertisin
g
Cinem
a
Internet Total
Food 86.1 2.1 2.2 7.1 1.0 1.3 0.2 100.
0
Cars 55.8 9.1 22.2 7.2 2.6 2.4 0.7 100.
0
Telecommunicati 72.8 3.9 10.4 6.6 3.4 0.6 2.3 100.
ons
0
Media/Publishin 63.8 13.3 12.1 5.7 1.8 0.4 2.8 100.
g
0
Beverage 82.8 4.1 4.8 4.9 1.7 1.3 0.4 100.
/Alcohol
0
Clothing
1.9 11.5 54.1 7.9 1.0 0.3 100.
23.3
Finance &
8.6 26.7 9.9 1.6 1.3 4.0 100.
Insurance 47.9
0
Toiletries 84.9 1.8 1.2 10.6 0.4 0.7 0.4 100.
0
Grooming 54.3 2.3 3.1 38.9 0.4 0.6 0.4 100.
0
Household 89.8 1.8 1.3 6.6 0.2 0.2 0.1 100.
0
Source: Estimates on Nielsen data
1.2.6. The development of the regulatory framework
Audiovisual
In the reference period the most significant legislative intervention in the
audiovisual sector was the approval of legislative decree no. 177 of 31 July 2005, on
“Consolidated radio and television broadcasting act”, issued in the pursuance of the
delegation granted to the Government in compliance with article 16 of law no. 112 of 3
May 2004 on “Regulations governing the structure of the radio and television
broadcasting system and RAI”.
The Consolidation Act contains a methodical reconstruction of provisions in
force on radio broadcasting and conforms to the principles of coordination,
simplification, harmonization and effectiveness governing the writing of consolidation
acts. Such act completes the intervention for the reorganization of communication
0
109

(except for press, entertainment and electioneering) started by the Government in 2003
with the issuing of the Code of electronic communications (legislative decree no. 35 of
1 August 2003).
The Consolidation Act is made up of ten Titles, divided into Parts and Articles.
In Title I , the principles of the subject-matter taken from the Constitution and from
primary legislation are defined. Title II specifies the parties which constitute the
Government bodies concerning radio broadcasting (Ministry of Communications,
Communications Regulatory Authority, Presidency of the Council of Ministers,
Parliamentary Commission for general guidance and inspection of radio and television
services, Commission for the protection of personal data, Antitrust Authority (AGCM),
Regions and Regional Committees for communications). Special attention has been
devoted to the areas of competence of AGCOM, updated based on the regulation
enforced since 1997 in the radio and television sector. They are in conjunction with
competence concerning electronic communications, notified to the European
Commission in compliance with provisions set forth in the Code of electronic
communications. Title III specifies provisions on the activities of radio and television
network operator, of TV contents provider on cable, satellite and terrestrial frequencies
and of radio contents provider on terrestrial frequencies, at national and local level, as
well as of service provider. Title IV refers to regulations for the protection of the user:
right to rectification, protection of minors in TV programming, across-border
transmissions, advertising. In Title V provisions on frequency planning and spectrum
are specified. Title VI contains provisions on the protection of competition and of the
market, also with regard to aspects concerning pluralism of information, whereas title
VII deals with regulations on the promotion of the circulation and the production of
European works. Title VIII contains organic provisions on RAI radiotelevisione italiana
s.p.a., the concessionaire of the general radio and television public service. Title IX
describes the powers of the Parliamentary Commission of inspection, whereas title X
includes, in addition to regulations on abrogation and final ones, those on sanctions.
Moreover with regard to the audiovisual sector, it is pointed out the adoption of
law no. 37 of 6 February 2006 (Official Journal of the Italian Republic no. 38 of 15
February) on “Amendments to article 10 of law no. 112 of 3 May 2004, concerning the
protection of minors in TV programming” which removed the ban, introduced by the
so-called Gasparri law, on using minors aged under fourteen years in radio and
television commercials.
Finally, still as regards the audiovisual sector, it is pointed out the postponement,
by article 19 of decree-law no. 273 of 30 December 2005, converted with law no. 51 of
23 February 2006, of the deadline for the switch off of analogue transmissions
postponed from 31 December 2006, as at first provided for by article 2-a, paragraph 5,
of decree-law no. 5 of 23 January 2001, extended, with amendments, by law no. 66 of
20 march 2001, to 31 December 2008.
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Surcharged services
By decree of the Ministry of Communications no. 145 of 2 March 2006
(published in the Official Journal of the Italian Republic no. 84 of 10 April 2006, in
force as at 25 April 2006) the new “regulations on surcharged services” have been
introduced.
The core elements of these new provisions are as follows: a) introduction of an
expense ceiling for call of € 12.50 (VAT excluded), without any limitation as to the
maximum number of calls; b) the inclusion of the rule of “express consent” of the
interested party for the provision of surcharged services (except for social-information
services); c) the setting, upon request, of a monthly ceiling for surcharged services, with
the possibility to choose between the two maximum thresholds of € 50.00 or 100.00; e)
the introduction of the ban on advertising breaks of information provided during
services charged based on call duration; f) the strengthening of the protection of minors
by means of the ban to provide information and services having contents that can
threaten the minor’s health, safety and growth or that appeal to their needs of affection
and protection.
Protection of consumers
In the reference period legislative decree no. 206 of 6 September 2005, on “Code
of consumption” has been adopted. This legislative decree put together in a single text
provisions of 21 measures (4 state laws, 2 Italian President’s Decree (DPR), 14
legislative decrees and 1 implementing regulation), summarizing in 146 articles the
content of 558 provisions concerning the protection of consumption.
This measure aims at reorganizing and simplifying the regulation on consumers’
protection, in coordination with principles and guidelines specified at Community level.
The Code regulates many sectors: labelling, general safety of products, deceptive
advertising and unlawful provisions, door-to-door sale, remote selling (including
contracts entered into in the sector of electronic communications) tourist agreements
and multiple ownership, guarantees of consumer goods and actions for inhibition.
2006 Finance Act
Article 1, paragraph 65 of Law no. 266 of 23 December 2005 (the so-called
2006 Finance Act) provides that expenses for the functioning of the National
Commission for Listed Companies and the Stock Exchange (Commissione nazionale
per le società e la borsa, CONSOB), Authority of inspection on public works, the
Supervisory Commission on pension funds as well as of the Communications
Regulatory Authority “are financed by the market of competence, for the amount which
is not covered by the financing included in the national budget, according to terms
specified in the regulations in force and contribution size specified with its own
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esolution by each Authority, in observance of the ceilings provided by law, paid
directly to AGCOM itself.” Such provision, in the part in which identifies the source of
financing of AGCOM in the “market of competence”, raises serious doubts about its
compliance with principles specified by the Community law-maker in article 3 and
above all in whereas no. 11 of the directive 2002/21/EC, where it is provided that,
Member States are to guarantee to national regulatory authorities all the necessary
resources, not only in terms of staffing and expertise, but also as to financial means for
the performance of their tasks.
In the aforementioned article 1 of the so-called 2006 finance act, the subsequent
paragraph 66 provides also that: “during its first enforcement, for the year 2006, the
amount of the contribution to be paid by subjects working in communications sectors as
specified in article 2, paragraph 38, clause b), of law no. 481 of 14 November 1995 is
set at 1.5 per thousand of the revenues resulting in the last balance sheet approved prior
to the date in which this law came into force.”
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2. ACTIONS UNDERTAKEN BY AGCOM
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2.1. ELECTRONIC COMMUNICATIONS MARKET ANALYSES
Introduction
Over the last year AGCOM continued the analysis of the relevant markets
identified at a European level by the European Commission Recommendation of 11
February 2003, while also working at setting out the new package of regulatory
obligations (the so-called “remedies”) ensuing from the identification of undertakings
which enjoy a position of significant market power.
In particular, AGCOM adopted resolutions bringing the regulatory procedure to
an end for 15 out of 18 markets identified by the European Commission. AGCOM also
adopted draft regulations as regards the remaining 3 markets, and immediately notified
them to the Antitrust Authority – under article 19 of the Code of Communications, and
pursuant to the joint-work agreement entered into with the above-mentioned Authority –
as well as to the European Commission and to other Member States’ Regulatory
Authorities – under article 12, paragraph 3 of the Code of Communications – in order to
obtain their relevant advice.
In the last twelve months AGCOM also published 4 documents undertaking
public consultations on the preliminary investigations results relating to the
identification and analysis of 5 markets, to the assessment and existence of a significant
market power for undertakings operating therein, and to the regulatory obligations
imposed on undertakings which hold such a power.
As far as electronic communications market analyses are concerned, AGCOM
completed its action by setting up three panels in charge of dealing with unbundling
customer migration procedures, wholesale line rental, and bitstream service provision
procedures.
Actions carried out by AGCOM with respect to access markets, calls over the
fixed public telephone line, leased lines, mobile telephony and radio and television
infrastructures are described in detail hereinafter. As to markets that are included in the
new regulatory framework but have not been approved yet, AGCOM is about to adopt
final regulations.
By next summer (2006) AGCOM will have completed the regulatory process
which is under way throughout Europe, and once this is over the telecommunications
regulatory framework will be substantially amended consistently with the targets of new
EU rules and regulations that aim at fostering an open and competitive market for
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electronic communications networks and services, developing the internal market and
protecting European citizens’ interests.
Access markets
Access to the fixed public telephone line for residential (market no. 1) and non-
residential customers (market no. 2).
On 19 January 2006 AGCOM adopted Resolution no. 33/06/CONS which
regulates retail markets for access to the fixed public telephone line, namely the market
intended for residential customer and the market for non-residential customers (markets
no. 1 and 2 among those identified by the European Commission Recommendation of
11 February 2003). Each market is composed of access services provided by analog
(PSTN) and digital (ISDN) lines.
Telecom Italia was identified as the dominant operator in the markets being
analyzed.
AGCOM confirmed in its resolution what had been laid down in the draft regulation
notified to the European Commission and to the Antitrust Authority in October 2005
and on which both institutions had advised for.
For end-user protection purposes, in its resolution AGCOM confirmed the
implementation methods of the long-term price control system (the so-called “price
cap”), and limited itself, at the most, to setting out unchanging prices for access services
intended for residential users and the recovery of inflation for access services offered to
non-residential users. AGCOM also imposed on Telecom Italia the obligations not to
unfairly privilege some given end users and not to unduly unify the services offered.
Thanks to the introduction of the WLR (Wholesale Line Rental) service on the
market, this regulation will allow telecommunications operators to debit users, by a
single bill, with all services they provide (including the subscription fee). Notably,
AGCOM imposed on Telecom Italia the obligation to provide WLR at the stadi di linea
(line stages) currently not opened to full unbundling and shared access services. This
service shall be offered to competitors on transparent and non-discriminatory terms and
the price shall be set by applying the retail minus methodology, the minus being set at
12%.
In laying down the obligation to provide the WLR service, AGCOM pursued
both the aim to guarantee end users the existence of a wide range of operators to choose
their access service provider from, and the long-term aim to make competition grow
among infrastructured operators.
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Imposing on the notified operator to provide the WLR service in areas where
unbundling has not been developed yet is considered by AGCOM as the necessary
factor for competitors to be able to climb the so-called ladder of infrastructural
equipment and achieve even higher infrastructure levels. By shaping the obligation
according to the level of development of the unbundled access to the local loop, the
WLR service is assured not to be in conflict with the unbundling service, in the sense
that WLR shall not prevent the latter from developing, so discouraging investments by
alternative operators.
On the other hand, taking account of the innovative nature of the WLR, under
article 21 of said resolution AGCOM has provided for the setting up of a panel
participated in by operators, in order to clarify and explain all technical, economical and
accounting aspects which are a prerequisite to the implementation of the service at
issue. 16 undertakings participate in the panel, which was set up by AGCOM decision
no. 11/06/SG and started work in March 2006.
The wholesale market for unbundled access to copper loops and sub-loops
(market no. 11)
On 12 January 2006, with Resolution no. 4/06/CONS, AGCOM passed the final
regulation relating to the analysis of the wholesale market for unbundled access
(including shared access) to copper loops and sub-loops, for broadband and voice
service provision purposes (market no. 11 among those identified by the European
Commission Recommendation of 11 February 2003).
This regulation comes after public consultation Resolution no. 415/04/CONS,
whose market analysis it deals with again by better setting out the obligations identified
by the resolution.
Resolution no. 4/06/CONS confirmed both the market definition identified by the public
consultation, according to which the extent is limited to copper networks, and Telecom
Italia having been notified as an operator enjoying a significant market power because
of its substantially monopolistic position in the copper access market.
With respect to the obligations imposed on the operator with a significant market
power, in line with the provisions set forth in the regulations previously in force and in
the proposed regulations submitted to public consultation, the above regulation confirms
transparency and non-discrimination obligations as well as the requirement to publish
an annual reference offer inclusive of services supplementary to the supply of
unbundled access.
The Resolution also confirms the accounting and administrative separation and
cost-accounting obligations, as well as price-control obligations.
With special reference to the latter, Resolution no. 4/06/CONS amends the policy
proposed by the public consultation by setting out a long-term price control system with
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an 1PC-4.75% reduction restriction for the years 2006 and 2007. The system also breaks
down services into 4 baskets according to the need to avoid cross-subsidies to the
detriment of fast-growing services with smaller volumes.
Each basket also includes activation fees and service management special oneoff
charges, which fall within the same price-variation restriction. By supplementing the
draft regulation, Resolution no. 4/06/CONS sets out structured offer obligations
covering not only unbundling access services but also the relevant additional services,
requires that a Service Level Agreement (SLA) be entered into, imposes provision and
reactivation penalties and sets out offer terms for the co-location service, which is no
more linked solely to the unbundled access but is supplementary to all intermediate
services which Telecom Italia is required to offer.
Among the major supplements proposed by Resolution no. 4/06/CONS are
methods to migrate among operators as regards unbundled access services. Under article
18 of said resolution new and more complete methods are set forth for users to switch
among different unbundled access services, in order to allow the migration between two
alternative operators with the least service discontinuance, while keeping the number
previously allocated. Another supplement involves the possibility for users of
alternative operators to switch from the unbundling operator and go back to Telecom
Italia by directly advising the latter of their intention.
These provisions transversely cover also broadband service markets and WLR
access service markets (market no. 12, no. 1 and no. 2 among those identified by the
European Commission Recommendation of 11 February 2003) for the purpose of
setting out homogenous migration methods among all access services in order to protect
end-users’ will to choose freely among different offers, regardless of the intermediate
access services used by each operator.
With respect to these procedures, which require that agreements be signed
among all operators, including Telecom Italia, for such aspects as number portability,
rejection reasons and call redirection AGCOM has decided that they shall come into
force exclusively subject to a previous agreement between the parties, while reserving
its intervention by a binding decision on conflicting aspects. In order to supervise the
implementation procedure AGCOM has set up a special panel with decision no.
11/06/SG for the purpose of involving all operators and causing discussion to occur
with consumer associations.
The wholesale market for broadband access services (market no. 12)
By publishing Resolution no. 34/06/CONS in the Official Journal of the Italian
Republic no. 44 of 22 February 2006, AGCOM concluded the analysis of the wholesale
market for broadband access services (market no. 12 among those identified by the
European Commission Recommendation of 11 February 2003) undertaken in March
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2005 with Resolution no. 117/05/CONS, by which AGCOM’s position was submitted
to a national public consultation with regard to the wholesale market for broadband
access. After carrying out the public consultation, on 29 September 2005 AGCOM had
adopted a draft regulation which was submitted to the Antitrust Authority – under
article 19 of the Code and pursuant to the joint-work agreement entered into with the
Antitrust Authority – and also notified to the European Commission and to Member
States regulatory authorities, under article 12, paragraph 3 of the Code of Electronic
Communications.
Having regard to the substantial agreement of opinions expressed by the
Antitrust Authority and by the European Commission, in its final regulation, while
confirming the previous provisions, AGCOM identified a nationwide market which
includes wholesale connectivity services offered by different technologic platforms,
such as xDSL, fibre optics and satellite. AGCOM also confirmed Telecom Italia as an
undertaking with a significant market power, and maintained the imposition of network
access, transparency, non-discrimination, price control and cost accounting regulatory
obligations (as previously identified).
In the context of this regulation AGCOM deemed it appropriate to specify,
though, that in the period between its coming into force and the approval of the
reference offer for bitstream services, Telecom Italia is still required to disclose the
technical (including SLAs) and price terms and conditions of each new retail and
wholesale offer of broadband services, with at least 90 days’ notice before their roll-out
(a 30 days’ notice is required if the new offer differs from the previous ones only in
price terms). This requirement, on which verification of the minus correctness is based,
if applied to wholesale offers would discourage Telecom Italia’s adopting exclusive
policies during the transition phase from the cost-recovery system based on the retail
minus to the one based on cost-orientation under the above regulation.
In order to implement article 14 of Resolution no. 34/06/CONS, on 3 April
2006, with decision no. 11/06/SG, AGCOM started off the work of the bitstream service
implementation panel of experts in charge of clarifying and explaining all technical,
pricing and accounting aspects which are a prerequisite to service implementation.
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Markets for fixed calls over the public telephone line
Markets for fixed-line local and/or national telephone services available to the public
for residential and non-residential users (markets no. 3 and 5)
On 3 January 2005, with Resolution no. 410/04/CONS AGCOM undertook a
public consultation on a proposed regulation concerning the following aspects: the
identification and analysis of markets for fixed-line local, national and fixed-to-mobile
telephone services available to the public for residential and non-residential users, the
assessment and existence of a significant market power for undertakings operating
therein, and the regulatory obligations imposed on undertakings which enjoy such a
power (markets no. 3 and 5 among those identified by the European Commission
Recommendation of 11 February 2003 on the relevant products and services markets).
The public consultation was aimed at gathering comments, information and
documentation by parties interested in the markets being examined.
In reply to the public consultation the following operators submitted their comments:
Albacom, Associazione Italiana Internet Provider (AIIP, the Italian Internet Provider
Association), Colt Telecom, Eutelia, Fastweb, H3G, MCI, Telecom Italia, Tele 2,
Tiscali, Vodafone, Welcome Italia, Wind. Reply documents were set forth during
hearings held on 3 February 2005, jointly for Albacom, Colt Telecom, Eutelia, Fastweb,
Tiscali and Wind Telecomunicazioni, and in separate hearings for Telecom Italia and
for Vodafone.
In the consultation document, according to supply and demand characteristics,
AGCOM considered the existence of a residential and non-residential market for fixedline
calls broken down per sector. Once the relevant market was set according to sectors
and user categories, it was set out from a geographic viewpoint. AGCOM then
identified the following nationwide markets:
a) the market for fixed local telephone services for residential users;
b) the market for fixed local telephone services for non-residential users;
c) the market for fixed national telephone services for residential users;
d) the market for fixed national telephone services for non-residential users;
e) the market for fixed-to-mobile telephone services over the fixed line for
residential users;
f) the market for fixed-to-mobile telephone services over the fixed line for nonresidential
users.
In view of Telecom Italia’s dominance position in all sectors of markets for
residential and non-residential telephone services, in the document submitted to public
consultation AGCOM set forth its intention both to confirm current regulations
governing markets for retail telephone services, and, inter alia, to maintain control over
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the maximum rates through the price cap system and over the minimum rates through
price tests.
However, in order to gather additional facts for the purpose of assessing the
significant market power, in November 2005 AGCOM deemed it appropriate to request
an update on traffic data for retail telephone services broken down per user segment and
per local, national, and fixed-to-mobile sector for the years 2003-2005.
Moreover, in view of the recent developments of Voice over Internet Protocol (VoIP)
services, in February 2006 AGCOM requested operators to supply it with traffic data on
such services, in order to gather information about the development of traffic-based
services offered by VoIP technologies on special numbers beginning with “0”.
Lastly, in view of the comments expounded by operators in the context of the
public consultation pursuant to Resolution no. 410/04/CONS, AGCOM considered it
necessary to investigate some positions that had been set forth in the consultation
document with regard to retail service price control measures, to offer submission and
assessment procedures, and to proposed measures relating to the assessment of bundling
offers by Telecom Italia. To that end, on 17 March 2006, with Resolution no.
87/06/CONS AGCOM launched a public consultation supplementing the provisions
proposed in Resolution no 410/04/CONS, for the purpose of gathering operators’
comments as to the proposed policies. Albacom, Colt, Eutelia, Fastweb, Tele 2, Tiscali
and Wind replied to the consultation supplement by submitting a joint document, while
Telecom Italia replied on its own. Operators set forth their documents during two
hearings held on 18 April 2006.
In the light of the analysis and assessments carried out, of comments gathered
both during the public consultation called with Resolution no 410/04/CONS and during
the public consultation supplement launched with Resolution no. 87/06/CONS, and of
additional data gathered with regard to the trend of markets under consideration,
AGCOM is going to set out the final regulation relating to the analysis of markets no. 3
and 5.
Markets for fixed-line international telephone services available
to the public for residential and non-residential users (markets
no. 4 and 6)
In its draft regulation relating to the analysis of markets for fixed-line
international telephone services available to the public for residential and nonresidential
users (markets no. 4 and 6 among those identified by the European
Commission Recommendation of 11 February 2003) – which was notified to the
Antitrust Authority and to the European Commission in May 2006 pursuant to the
European regulatory framework and to the Code of Electronic Communications –
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AGCOM confirmed the position set forth in the public consultation document
(Resolution no. 414/04/CONS), according to which Telecom Italia enjoys a dominant
position in the relevant markets submitted to the preliminary investigation.
In adopting the draft regulation, besides taking account of comments expounded
by operators which participated in the public consultation, AGCOM also considered
market data collected until December 2005 and showing that Telecom Italia holds a
market share above 50%.
As to the development of markets under consideration, international traffic measured in
terms of minutes has progressively grown until 2002. This increase proved significant in
the 2000-2001 period, with a growth approximately equal to 13%. In the following year
the increase slowed down and then a decreasing trend started, mostly in the residential
market.
On the other hand, in the international sector a decreasing trend was reported in
terms of revenues in the 2000-2005 period, both in the residential and non-residential
markets. Such a drop was mostly due to the progressive cut in call rates. As a matter of
fact, while the international traffic dropped approximately by 4%, revenues decreased
approximately by 40% on the whole.
Therefore, based on Telecom Italia’s notification as an operator enjoying significant
market power in the markets for fixed-line international telephone services available to
the public for residential and non-residential users, AGCOM has set out the new
regulations it intends to impose on the dominant operator. In particular it has provided
for the following:
1. confirming the decision made with Resolution no. 289/03/CONS to exclude
Telecom Italia’s international residential and non-residential calls from control
by the price cap system;
2. lifting the obligation, pursuant to Resolution no. 152/02/CONS, to submit
international residential and non-residential call rates to control also by the price
test;
3. maintaining other obligations pursuant to Resolution no. 152/02/CONS with
regard to methods and deadlines according to which price terms of services
offered to residential and non-residential users shall be disclosed;
4. as to transparency obligations relating to commercial offers proposed by the
dominant operator, imposing the obligation to publish on the latter’s web site the
information about pricing and supply terms and about the terms of all
commercial offers, either on the same day a new offer is rolled out on the
market, or on the date of effect of changes to offers already launched on the
market. Rates, terms and conditions of supply shall be those for which the exante
verification procedure has been concluded, and shall be published by
reporting the date they came into force. The obligation is then maintained, under
article 70, paragraph 4 of the Code of Electronic Communications aimed at
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protecting end users, to inform subscribers, whatever qualification they may
have, with adequate prior notice, not shorter than a month before the date of
implementation, about the change in the contractual terms currently in force for
them, also including any changes in rate patterns.
Fixed-line interconnection wholesale markets (markets no. 8, 9
and 10)
On 20 April 2006 AGCOM passed the draft regulation relating to the analysis of
wholesale markets for collection, termination and transit (markets no. 8, 9 and 10
among those identified by the European Commission Recommendation of 11 February
2003) for the purpose of subsequently notifying it to the Antitrust Authority, the
European Commission and other Member States’ regulatory authorities.
The proposed regulation substantially confirms all major aspects submitted to
public consultation with Resolution no. 30/05/CONS as to the setting out of the markets
at issue, the identification of operators holding significant market power and the
relevant regulatory obligations.
As to the setting out of markets, while confirming the provisions submitted to
consultation, the draft regulation highlights more clearly that Telecom Italia’s packetswitching
network telephone services fall within the identified markets, due to their
replaceability with conventional technology services.
As to the identification of operators with significant market power, also on the
basis of 2005-revised data the draft regulation confirms the identification of Telecom
Italia as the dominant operator in the markets for collection, termination and transit, as
well as that of each operator equipped with an access network in the individual market
for termination on the operator’s network. The draft regulation also stresses the need to
lift Telecom Italia’s and Wind’s notifications in the dial-up Internet termination market,
as it is considered to be a competitive market, and Telecom Italia’s notification for the
termination of calls towards foreign areas, as the introduction of ex-ante regulations
does not appear to be required.
With regard to the obligations imposed on Telecom Italia, the draft regulation
confirms what has already been submitted to public consultation, and better specifies
obligations involving transparency, non discrimination, access to given network
resources, publication of the reference offer, accounting and administrative separation,
cost accounting and price control.
With special reference to the latter, on the basis of additional accounting data the
draft regulation changes network cap implementation schedules (to be applied to
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eference offers relating to the 2007-2009 period instead of those covering the 2006-
2008 timeframe), variation restrictions relating to collection and termination baskets
(IPC-13.2% for 2007 and IPC-9.9% for 2008 and 2009, instead of the value previously
provided for, which was equal to IPC-11.3%), as well as variation restrictions for transit
and accessory services baskets (IPC-13.2% for 2007 and IPC-9.9% for 2008 and 2009,
instead of the IPC-IPC value). The draft regulation also provides for the introduction of
two separate baskets of services, relating to billing and access from public phones, for
which a variation restriction equal to IPC-IPC was proposed.
Among Telecom Italia’s obligations stemming from the outcome of the closer
examination carried out with respect to the public consultation, those falling within the
draft regulation are as follows:
• provisions relating to the redirection of calls in case of “subsequent” number
portability between third party operators, in order to allow an efficient
portability of fixed-line numbers between alternative operators;
• supplements to provisions covering carrier pre-selection, whose activation and
deactivation methods were revised in order to take account of distance contracts
rules, by introducing, following the signature of a contract between operator and
user, the obligation to require that an order form be signed in order to curb the
impact of unwanted activations;
• obligations concerning interconnection to nodes of Telecom Italia’s broadband
network for access to voice collection, termination and transit services;
• introduction of a wholesale service to access billing systems from public phones
with special billing cards.
As to the obligations imposed on termination operators different from Telecom
Italia, besides setting out transparency and non-discrimination obligations for the voice
termination service offer, the draft regulation sets a rate ceiling equal to € 0.0154 per
minute. In actual cases though, it is possible to derogate from this value as, pursuant to
the draft regulation, operators can apply to AGCOM by proving their costs with
documents and by supplying, upon AGCOM’s request, an accounting systems audit for
AGCOM to be able to issue a decision on the termination service price.
Markets for leased lines
Wholesale markets for leased lines (markets no. 13 and 14)
In January 2006 (Resolution no 45/06/CONS) AGCOM ended preliminary
investigations relating to the analysis of markets for terminating and trunk segments of
leased lines (markets no. 13 and 14 among those identified by the European
Commission Recommendation of 11 February 2003). In this framework AGCOM
precisely set out the geographic and product boundaries of the relevant markets,
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identified operators holding a significant market power and imposed the relevant
regulatory obligations.
In the course of the investigation AGCOM undertook a public consultation on its
own draft regulations. Following the outcome of this consultation, it then requested an
opinion on the final regulation both to the Antitrust Authority and to the European
Commission, and received a positive feedback on the whole structure of the market
analysis.
With Resolution no 45/06/CONS AGCOM then confirmed the draft regulations
submitted to public consultation (Resolution no 153/05/CONS) with regard to the
geographic and product setting out of relevant markets no. 13 and 14, Telecom Italia’s
identification as the single operator holding a significant market power, and the
imposition of obligations with respect to the use of resources, transparency, nondiscrimination,
accounting separation, cost accounting and price control.
In particular, the wholesale offer of leased lines shall be broken down into
terminating segments and long-distance trunk segments according to (approximately 20)
regional transmissive areas to be set out on the basis of Telecom Italia’s actual network
topology. Differently from what was provided for by the old regulatory framework,
both services can be used by alternative fixed and mobile network operators regardless
of their targets of use. Alternative operators will have the possibility to request the
services under discussion through interconnection to a node belonging to Telecom
Italia’s regional reference network, or through internal exchange connections in case of
co-location within the exchange. An alternative operator intending to reach regional
areas within which they do not have any points of presence will have the possibility to
request from Telecom Italia the trunk segments which represent a long-distance
transport service for the purpose of connecting two or more regional transmissive areas.
AGCOM’s measure also regulates the supply of interconnection flows and
internal exchange connections, as these supplementary elements are required in order to
use all regulated wholesale services, including terminating and trunk segments of leased
lines. Just like the latter, interconnection flows and internal exchange connections too
are subject to cost-orientation obligations, according to the methods set by the network
cap system.
As to rules regulating pricing terms, to which services included in markets no.
13 and 14 are subject, the most significant news is the switch from a retail minus system
to a long-term maximum rate control system (the so-called network cap) which imposes
cost-orientation obligations also with respect to terminating segments. In particular, the
network cap system sets an annual 9.6% decrease (gross of inflation) for terminating
segment rates and the mere recoupment of inflation for long-distance trunk segment
rates.
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With this measure AGCOM has then regulated in distinct terms the pricing
terms that Telecom Italia is allowed to apply to the supply of terminating and trunk
segments, for the purpose of fostering competition among operators which have already
made or are going to make investments in their own network infrastructures for short-
and long-distance transport.
Retail market for leased line (market no. 7)
As regards the retail market for leased lines (market no. 7 among those identified
by the European Commission Recommendation of 11 February 2003), in November
2005 AGCOM notified to the European Commission the final draft regulation, which
supplements the one submitted to public consultation (Resolution no. 411/04/CONS)
with comments received by operators and with AGCOM’s considerations.
Following the European Commission’s remarks as to the partial effectiveness of
the grounds put forward with regard to the existence of a single relevant market for low
and medium speeds (up to 2 Megabits inclusive) and for high speeds (over 2 Megabits
and up to 155 Megabits), AGCOM withdrew its proposed regulation and assembled a
new one, which was notified to the European Commission in April 2006. In it, also in
the light of the results of analyses carried out on the corresponding wholesale markets,
AGCOM identified as a relevant retail market for leased lines the market for analog and
digital circuits up to 2 Megabits inclusive (which coincides with the minimum set
pursuant to the European Commission Recommendation). With respect to this market,
AGCOM has proposed that Telecom Italia be notified as a holder of significant market
power and that transparency, non-discrimination, price control and cost accounting
obligations be imposed.
In particular, with regard to the price control obligation AGCOM has proposed
to apply to direct circuits falling within the minimum set a long-term price planning
system, the so-called price cap, with a special restriction for 2 Mbit/s numeric speed
circuits. Lastly, AGCOM has proposed to lift current regulatory obligations at a retail
level for all circuits above 2Mbit/s capacity.
Mobile phone markets
Markets for access and collection of calls over mobile public
telephone networks (markets no. 15 and 15 b)
On 4 August 2005 AGCOM published its analysis (Annex B to Resolution no.
306/05/CONS) of the market for access and collection of calls over mobile public
telephone networks (market no. 15 among those identified by the European
Commission Recommendation of 11 February 2003). Afterwards, in September, under
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article 3 of Resolution no. 453/03/CONS AGCOM called a hearing of the undertakings
that had specially applied for it in order to set forth their comments with regard to the
document submitted to public consultation.
Following the public consultation, and taking account of operators’ comments,
AGCOM assembled the draft regulation, which was notified in October to the European
Commission and to the Antitrust Authority. The European Commission advised for it,
while the Antitrust Authority reserved its conclusive judgement until the end of its own
preliminary investigation of the matter, which was still under way at the time the
opinion was due.
In February 2006 AGCOM passed Resolution no. 46/06/CONS which brought to
an end the analysis of the market for access and collection of calls over mobile public
telephone networks. In this resolution a single national market was identified for the
joint supply of access and collection services provided by mobile network operators to
operators not equipped with radio resources, in order to allow the latter to offer end
users both voice and data services (such as SMS’s).
AGCOM came to the conclusion that in the market for access and collection of
calls over mobile public telephone networks neither single and/or joint dominance
positions nor any substantial changes in competition are reported, and then decided not
to impose any regulatory obligations on mobile network operators and to confirm the
current regulatory framework. In this connection it should be highlighted that, as
regards the opening of networks to operators not equipped with radio resources, under
present conditions there is no obligation for mobile operators to enter into agreements,
though this does not rule out the possibility of voluntary negotiations between parties on
a commercial basis and in compliance with transparency and non-discrimination
principles.
In the context of the same resolution, AGCOM also started a monitoring action
aimed at following the development of the access and collection service market, paying
special attention to relations between infrastructured operators and those without a
network (virtual operators), whose entrance – also in the Italian market – might be
beneficial in terms of reductions in end prices.
Lastly, AGCOM deemed it appropriate to refer any considerations to a relevant
market analysis as regards the wholesale provision of the origination service in order to
allow mobile users to access services provided on non-geographic numbers. AGCOM
actually believes these services to represent a specific market (conventionally named
market no. 15 b) characterized by supply and demand conditions and by specific
competition dynamics.
In April 2006, with Resolution no. 162/06/CONS AGCOM initiated specific
proceedings aimed at analyzing such a market. It then sent operators letters requesting
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data for the purpose of assembling the analysis fact sheet to be submitted to public
consultation.
The market for voice call termination over single mobile networks
(market no. 16)
Urgent regulations aimed at setting maximum rates for voice call
termination on single mobile networks
In July 2005, with Resolution no. 286/05/CONS AGCOM passed the
introduction of urgent regulations aimed at setting maximum rates for voice call
termination on single mobile networks, under article 12, paragraph 6 of the Code of
Electronic Communications. As a matter of fact AGCOM detected such extraordinary
and urgent conditions as to require the adoption of provisional precautionary measures
in the national market for voice call termination on single mobile networks.
In order to assess the exceptional nature and seriousness of the current situation
AGCOM showed that, particularly with respect to TIM and Vodafone, such rates have
been reported higher than the costs deriving from their regulatory accounting since the
2001 accounting. WIND termination rate shows even higher levels considering that,
before the regulatory intervention pursuant to Resolution no. 286/05/CONS, such value
was reported higher than € 0.18 per minute, compared to € 0.1495 charged by TIM and
Vodafone.
AGCOM believed that, in a context where costs tend to decrease dynamically,
such circumstances turn into a widening, in time, of the gap between rates and costs of
the mobile network termination service, in plain contrast with consumer and
competition protection.
This assertion was also confirmed by the analysis of the international context, which
shows that a significant increase occurred in 2005 in the variance between termination
rates charged by notified operators and the European average, and an additional increase
was reported with respect to a similar survey carried out in 2004 by the Independent
Regulators Group (IRG).
With regard to the urgent reasons which accounted for AGCOM’s having
adopted a provisional precautionary measure under article 12, paragraph 6 of the Code
of Electronic Communications, it was stressed that the reduction in voice call
termination rates set forth in the draft regulation intended for public consultation could
not be implemented before the end of 2005, due to the activities required to complete
proceedings. Moreover, AGCOM recognized the need to intervene both by showing that
the draft regulation laid down in Resolution no. 465/04/CONS involved the
implementation of termination rate reduction provisions as early as 1 June 2005, and by
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easserting that the call rate reduction regulated by AGCOM in Resolution no.
47/03/CONS (to an annual 10% extent for 2004-2005) had not been implemented.
In line with AGCOM’s considerations as set out in Resolution no. 465/04/CONS, and in
accordance with the European Commission’s policy as laid down in the
recommendation on the relevant markets, AGCOM identified four relevant markets
corresponding to the termination of voice calls originating either from mobile or from
fixed lines, over the networks belonging to each mobile operator operating in Italy –
TIM, Vodafone, WIND and H3G – and also identified said mobile operators as
individually dominant operators in the provision of the termination service on their own
networks.
AGCOM also set out their respective obligations which are considered to be
necessary in order to foster economic effectiveness and the protection of competition
and of users’ interests.
In particular, with regard to the termination rate control obligation, AGCOM believed it
to be appropriate to fix, as from 1 September 2005, the maximum termination price for
TIM and Vodafone at € 0.1210 per minute, and to impose the same obligation on WIND
by setting for them a maximum termination price equal to € 0.1435 per minute.
Consistently with the provisions set forth in Resolution no. 465/04/CONS,
AGCOM considered that the immediate imposition of a price control obligation on
H3G, in the light of their recent entrance in the market, their reduced user base, the need
to protect the substantial level of investments made, and their financial situation, would
represent an excessive burden on this operator.
These considerations have then accounted for the non-imposition of price
control measures on H3G, while at the same time AGCOM reserves the possibility to
revise these conclusions in the light of the outcome of the mobile termination market
analysis and, in any case, within 12 months following the publication of Resolution no.
286/05/CONS.
As to the remaining regulatory obligations, AGCOM reasserted that notified
operators shall comply with the current regulatory system, and shall adopt behaviours in
compliance with competition, namely non-discriminating behaviours.
Provisional and precautionary measures introduced by Resolution no. 286/05/CONS
produced results until the coming into force of Resolution no. 3/06/CONS.
The final regulation
In January 2006 (with Resolution no. 3/06/CONS) AGCOM concluded
proceedings relating to the identification and analysis of the market for voice call
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termination on single mobile networks, to the assessment of the existence of a
significant market power for undertakings which operate therein, and to the regulatory
obligations imposed on undertakings which enjoy such a power (market no. 16 among
those identified by the European Commission Recommendation of 11 February 2003).
With regard to market definition, in line with the provisions set forth in the
recommendation on the relevant markets and with the assertions expounded in the draft
regulation pursuant to Resolution no. 465/04/CONS, AGCOM confirmed the
identification of a single national market for the termination of voice calls originating
both from fixed and from mobile networks, on every single mobile network, regardless
of the technology used (either GSM or UMTS).
As regards the assessment of the significant market power AGCOM reasserted
what had already been held in Resolution no. 465/04/CONS as to the absence of actual
competition conditions on the market, and identified each Mobile Network Operator
(MNO) – TIM, Vodafone, WIND and H3G – as an individually dominant operator with
respect to the supply of the mobile voice termination service on their own network.
In the light of the market analysis that was carried out, and taking account of the
competitive context that emerged, AGCOM set out differently-graded obligations
according to each operator’s different characteristics, in order to promote economic
effectiveness and sustainable competition and to cause consumers to benefit as much as
possible.
In particular, AGCOM imposed on TIM, Vodafone, WIND and H3G the
obligation to provide access and use of some given network resources, the transparency
and non-discrimination obligation, and the obligation to assemble a reference offer.
With regard to the termination price control, provisions set forth in Resolution no.
465/04/CONS were confirmed, that is maintaining for TIM and Vodafone the
termination price control and cost-orientation obligations, as well as the obligation to
lay down a regulatory accounting system, while introducing the same obligations for
WIND.
In particular, with regard to price control, AGCOM introduced a scheduled
reduction system for termination rates of voice calls on mobile operators’ networks for
the years 2006-2008. As from 1 July 2006 the price for the voice call termination
service on TIM’s and Vodafone’s networks shall not be above € 0.1120 per minute in
accordance with an annual reduction restriction equal to IPC-13%, and the same price
shall not be above € 0.1290 per minute for WIND, with an annual reduction restriction
equal to IPC-16%.
AGCOM also provided for variations in the termination price, in compliance
with the annual reduction restriction, to be applied no later than 1 July of the years 2007
and 2008. Such variations will allow to reach, in July 2008, an objective value of the
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price of the voice call termination service equal to € 0.0890 per minute for TIM and
Vodafone and to € 0.095 per minute for WIND.
In pursuing the objective of verifying the degree of cost orientation of the termination
price, AGCOM imposed on TIM, Vodafone and WIND the obligation to lay down a
regulatory accounting system.
In the light of the different market position held by H3G, AGCOM decided not
to impose on this operator the termination price control and cost-orientation obligations,
nor the obligation to lay down a regulatory accounting system, while reserving the
possibility to introduce the imposition of such obligations by 31 July 2006.
The wholesale market for international roaming services (market
no. 17)
With the publication of Resolution no. 78/06/CONS in the Official Journal of the
Italian Republic no. 64 of 17 March 2006 AGCOM undertook the public consultation
on the analysis of the wholesale national market for international roaming services for
mobile public telephone networks (market no. 17 among those identified by the
European Commission Recommendation of 11 February 2003).
In drawing up the nationwide analysis of market no. 17, AGCOM used data
gathered and results achieved by the European Regulators Group (ERG) Project Team
which had carried out in the previous months, under the Italian Regulatory Authority’s
coordination, a joint analysis of competition conditions in wholesale international
roaming services in 10 European countries.
After due consideration of its applicability to the Italian context, the Italian
Authority has adopted the market definition proposed by ERG Project Team. Within the
context of wholesale roaming services this definition only includes inbound roaming
services, that is, services provided by Italian mobile operators to foreign mobile
operators in order to enable customers of the latter to access mobile telephone services
by using their handsets throughout the Italian territory. Wholesale outbound roaming
services, that is, services provided to Italian operators in order to enable their customers
to use theirs handsets outside the Italian territory, are solely offered by foreign operators
and do not fall within the Italian relevant market.
In this case too, in accordance with the results achieved by ERG Project Team,
origination services alone were considered to be relevant insofar as wholesale roaming
rates for inbound traffic stem from them. As a matter of fact, when foreign mobile
operators’ users originate a call in Italy, Italian mobile operators provide (by incurring
any relevant costs) the whole end-to-end service, for which they receive from foreign
mobile operators payment of the so-called interoperator tariff (IOT). On the other hand,
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when foreign mobile operators’ users receive a call in Italy, Italian operators are paid
the conventional mobile termination rate by international transit operators which handle
international transport on behalf of foreign mobile operators.
Moreover, as voice and SMS-like data services are bought on the wholesale
market on a bundle basis, they are considered to be falling within the same wholesale
inbound roaming market. Finally, in abidance by the principle of technological
neutrality pursuant to the new regulatory framework, AGCOM believed voice services
provided on 2G and 3G networks should be considered as part of the same relevant
product market.
AGCOM then concluded that the wholesale market for international roaming
services for mobile networks is the nationwide market for services supplied to foreign
mobile network operators in order to allow their users to originate calls and send SMS
by using all Italian operators’ 2G and 3G mobile networks.
In assessing the single dominance AGCOM considered market shares held by working
operators, as well as other qualitative and quantitative indicators. With respect to market
shares no operator reached such a share, within the analysis period, as to be identified as
holding a dominance position.
Barriers to entry into the market turned out to be very high, due to the licence
requirement and to the significant investments linked to the development and
commercial roll-out of a mobile 2G or 3G network wide enough to allow covering the
Italian territory.
On the other hand, the substantial homogeneity of services offered by Italian operators,
together with the maturity of 2G and 3G technologies, do not seem to lend any
advantages or technological superiority to any operator in particular. Moreover, the
wide availability of traffic redirection techniques enables operators that buy
international roaming services to exert a counter purchasing power.
These considerations have led to believe that none of the operators working on
the wholesale national market for international roaming services for mobile public
telephone networks individually enjoys a significant market power.
In order to assess the existence of collective dominance positions criteria were used
which are listed in Annex II to the general policy directive, as they are considered to be
fit for the analysis of the competitive framework of the market being examined. In
particular, products homogeneity, the similarity of cost structures and market shares, the
absence of technological innovation and the maturity of technologies were taken into
account.
From the assessment of said criteria such facts emerged as made it possible to
assume the existence of a joint dominance in the form of tacit coordination. At this
point, it was believed to be fair to verify whether such an assessment was in line with
the Commission’s decision-making procedure and with the Court’s case law. To that
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end, the three so-called “Airtours” criteria were used, namely market transparency,
stability of the tacit coordination and the simultaneous absence of potential competition
and counter purchasing power. In this connection, having considered that the reduced
transparency of rates brought about by discounts, on one hand, and the absence of
reliable and effective retaliatory mechanisms, on the other hand, cause the three criteria
not to be simultaneously verified, the conclusion was drawn that in the Italian wholesale
international roaming market it is not possible to find a joint dominance position.
As it did not find any single or joint dominance positions AGCOM did not
impose any regulatory obligations on mobile network operators, so confirming the
current regulatory framework.
All undertakings which submitted theirs remarks with respect to the consultation
document substantially agreed with AGCOM’s considerations. As a consequence, after
supplementing the analysis document with its own and operators’ remarks, on 27 April
2006 AGCOM adopted a draft regulation which was both forwarded to the Antitrust
Authority and notified to the European Commission as well as to Member States’
Regulators, under article 12, paragraph 3 of the Code of Electronic Communications.
The radio and television infrastructure market
The market for radio and television broadcasting services for the
airing of content to end users (market no.18)
The market for radio and television broadcasting services for the airing of
content to end users (market no.18 among those identified by the European Commission
Recommendation of 11 February 2003) is one of the markets thought to be liable to exante
regulation. AGCOM published the draft regulation relating to the market being
examined (Annex B to Resolution no. 61/06/CONS) on 9 February 2006 on its web site
and on 22 February 2006 in the Official Journal of the Italian Republic.
In the document submitted to public consultation AGCOM identified three relevant
markets in the context of radio and television broadcasting services for the airing of
content to end users:
• national market for television broadcasting services on analog terrestrial
platform;
• national market for television broadcasting services on digital terrestrial
platform;
• national market for radio broadcasting services on analog terrestrial platform;
The document submitted to public consultation focuses on the definition of the
relevant markets and on the assessment regarding the existence of single and joint
dominance positions. As a first step AGCOM chose to concentrate on the identification
and analysis of the relevant markets and of the existing competitive conditions, without
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analyzing any possible regulatory obligations to be imposed on operators with a
significant market power, in order to allow the parties involved to deal with, and better
investigate, on two different occasions, the aspects concerning market identification and
the remedies imposed.
As to the assessment of the significant market power, the analysis carried out on the
structural conditions of the national market for television broadcasting services on the
analog terrestrial platform shows a still-insufficient level of competition. This market is
characterized by vertically integrated undertakings and by a limited number of
conveyable broadcasts which shrink the market’s total productive capacity.
In particular, considerations included in the consultation document as to market
shares held (present level and trends), and as to the analysis of market supply and
demand structural characteristics (such as barriers to entry and to expansion, vertical
integration and the conditions to access financial resources), led AGCOM to believe
that RAI and RTI enjoy a net advantage with respect to competitors as to the control of
difficult-to-duplicate infrastructure and of the advertising investment downstream
market, as they also have considerable financial resources. In AGCOM’s opinion, in the
framework of the market under discussion, whose peculiar structural characteristics also
stem from the regulations which have been adopted in time, such an advantage might
represent a favourable environment for the tacit coordination between these two
undertakings which control the market’s biggest shares.
In the light of the characteristics under paragraph no. 96 of the European
Commission guidelines, AGCOM then verified the existence of a collective dominant
position and concluded that RAI and RTI hold a collective dominance position due to
the presence of similar market shares held by these undertakings, to the absence of
pricing competition and to the presence of a competition totally based on the
broadcasting capacity.
The equivalence of products supplied and population shares achieved, as well as the
similarity in cost structures are then inferred in a market characterized by strong
hindrances to access, a significant technological advance and the existence of informal
bonds between the two major groups which operate at all levels of the television sector
production chain, where they hold significant positions.
With regard to the national market for television broadcasting services on the digital
terrestrial platform, AGCOM reports that the endless growth of this market,
considerations relating to shares held by undertakings, and the analysis of supply and
demand structural characteristics presently lead to exclude the existence of any
dominance positions also in view of the homogeneity of market shares and dynamism of
the market under discussion. However AGCOM points out that, due to the
characteristics of the Italian radio and television system, the same market configuration
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which characterizes the analog sector could possibly occur also in the digital sector in
the future.
Lastly, the document submitted to consultation also analyzed the competitive
situation of the national market for radio broadcasting services on the analog terrestrial
platform, and excluded the existence of any forms of dominance in this market. Radio
broadcasters in operation are in large numbers and hold market shares consistent with
the limits set out in the European Commission guidelines. The market is characterized
by a satisfactory level of present and potential competition, as access by new
undertakings is also possible.
In late March 2006 AGCOM called a hearing of undertakings which had applied for
it in order to set forth their remarks with respect to the draft regulation. In total 14
statements relating to the consultation were submitted by 15 undertakings and 9
undertakings were heard. Operators’ remarks with respect to the document submitted to
public consultation are currently being summarized, together with AGCOM’s
considerations in this respect, while a relevant draft measure is being set out.
2.2. FIXED LINES
With respect to issues involving fixed lines in 2005 AGCOM carried out its
regulatory, supervisory and sanctioning actions, along with activities related to market
analyses, in compliance with the current regulatory framework.
In particular, in the May 2005 – April 2006 period, AGCOM’s actions covered the
following areas:
• auditing of notified fixed and mobile network operators’ regulatory accounting;
• auditing of Telecom Italia Universal Service net cost;
• directory inquiry service numbers;
• analysis of the terms and conditions of service provision to the public offered by
Telecom Italia through their general price list;
• analysis of the terms and conditions of service provision to the public offered by
Telecom Italia through discounted packages and special offers;
• rate ceiling supplement for the provision of services related to special numbers;
• allocation of number resources to the Ministry of Equal Opportunities of the
Council of Ministers.
Auditing of notified fixed and mobile network operators’
regulatory accounting
In 2005 AGCOM completed tendering procedures and entrusted the audit of
notified fixed and mobile network operators’ regulatory accounting, with regard to
accounting periods 2002-2004, as well as the audit of the universal service net cost
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calculation, with regard to 2003 and 2004, respectively to Mazars&Guerard and to
Europe Economics.
In December 2005 procedures were also initiated for the purpose of carrying out
the cost accounting audit relating to TIM’s and Vodafone’s mobile termination service.
For the first time the audit is also going to cover the mobile termination service, to be
assessed according to current costs pursuant to guidelines passed by AGCOM with
Resolution no. 399/02/CONS.
TIM’s and Vodafone’s cost accountings relating to accounting periods 2002-
2004, to be assessed according to current costs and also according to historical costs, are
consequently being audited by Mazars&Guerard. This firm has also been entrusted by
AGCOM with the task of auditing the cost accounting and accounting separation with
regard to fixed-line services offered by Telecom Italia during accounting periods 2002-
2004.
In December 2005 Telecom Italia and Mazars&Guerard were involved in the
start of procedures relating to the regulatory accounting audit. In this case too, pursuant
to Resolutions no. 399/02/CONS and no. 152/02/CONS, within the regulatory
accounting the increase in value of depreciations as well as that of the invested capital
shall be based both on historical costs and on current costs.
Auditing of Telecom Italia universal service net cost
In the framework of the preliminary investigation concerning the applicability of
the universal service net cost apportionment system and its assessment for 2003, Europe
Economics, in its capacity as the independent organization entrusted by AGCOM under
article 62 of the Code of Electronic Communications, has completed its auditing of the
net cost calculation submitted by Telecom Italia, the universal service provider.
AGCOM is then about to undertake a public consultation aimed at gathering
market operators’ remarks with regard to the outcome of the audit carried out by Europe
Economics.
In late 2005 AGCOM started a preliminary investigation on the applicability of the
apportionment and assessment system intended to handle the net cost incurred by
Telecom Italia in 2004. Within this framework AGCOM requested from market
operators information and data on costs and revenues pursuant to Annex 11 of the Code
of Electronic Communications, in order to assess, on one hand, the level of competition
achieved in telecommunications markets and, on the other hand, the fund contribution
fees due by each operator. In the light of such data, and taking account of the
competitive level reached in the markets, AGCOM established the injustice of the net
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cost incurred by Telecom Italia and consequently laid down the applicability of the
relevant apportionment system.
Europe Economics will carry out the auditing of the universal service net cost
calculation, with respect to fiscal year 2004, following AGCOM’s adoption of the final
regulation regarding the applicability of the net cost apportionment and assessment
system for the year 2003.
Directory inquiry service numbers
AGCOM identified under article 24 of the National Numbering Plan (Resolution
no. 9/03/CIR) the “12XY” four-digit number intended for the supply of directory
inquiry services, while referring to a special process the setting out of the
implementation schedule, of the subjective requirements for the allocation of the rights
of use, and of the relevant methods to allocate the rights to use the numbers at issue.
Resolution no. 15/04/CIR laid down the methods to allocate the rights to use “12XY”
numbers, the start date for their entry into force (as from 1 July 2005, though the
possibility was granted to launch advertising projects towards customers as early as 1
March 2005), and regulations governing the service provision, including, under article
7, paragraph 7, the service maximum rate, equal to € 0.3 per answered call plus € 1.50
per minute (plus V.A.T.).
In May 2005, with Resolution no. 12/05/CIR AGCOM recognized that it was
advisable to change the enforcement schedule relating to directory inquiry service
numbers, and set the service start date with regard to new numbers as from 1 October
2005, with the simultaneous discontinuance of number “12”. As regards network
internal numbers beginning with 4XX, discontinuance of this service was set as from 1
December 2005.
In order to assure a strict abidance by rules and principles aimed at the opening
of fair competition, full protection of users, and impartiality of the information provided
to the latter, AGCOM carried out a constant monitoring of behaviours performed by
access operators and new operators that are allocated “12XY” numbers. In this
framework, in July 2005 AGCOM issued orders to comply with respect to access
operators whose behaviour had been disputed, in particular as regards the neutrality of
advertisements used to make users aware of the changes currently involving the
directory inquiry service. As a matter of fact, in order to assure the development of fair
competition among all operators, Resolution no. 15/04/CIR required that, pending the
activation of new numbers, customers who were accessing the service by dialling
already-active numbers should receive an announcement explaining changes under way
in terms of full neutrality, that is to say that such announcement should not have
directed customers toward any number or operator in particular.
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The same supervisory action was carried out with respect to the methods used to
provide services of the same kind, which were already being offered on other numbers
at an extra charge ( “892XXX” numbers), and could still be provided also after the
coming into force of “12XY” numbers.
Since 1 October 2005, with the entry into force of “12XY” numbers for the provision
of the directory inquiry service, AGCOM has monitored their correct use both as
regards information provided to users and as regards the fairness of rates charged, in
connection with the ceiling set for rates per answered call and per minute pursuant to
Resolution no. 15/04/CIR.
As to information to users it should be highlighted that, in confirming
regulations already included in the Numbering Plan (Resolution no. 9/03/CIR) for all
extra-charge numbers – a category under which the number in question falls – the
above-mentioned resolution provides for the following requirement, under article 3,
paragraph 2, letter h, among the conditions imposed on the use of such numbers: “to
make the caller aware, free of charge, of the cost of calling the 12xy number and of the
cost of the call completion service possibly requested by the user”. Therefore, rather
than allowing any cost information methods based on a simple reference to a toll-free
number (“800XXXXXX” numbers), AGCOM allowed that - upon full information
about rates - an announcement be conveyed informing only of the maximum rate for
calls from fixed lines and from mobile networks.
As from 1 December 2005 AGCOM set the deadline for the discontinuance of
the directory inquiry service offered by access operators on the so-called “network
internal set of numbers beginning with 4XX” (operators had mostly used the “412”
which reminded users of the traditional number “12” on which the service had
previously been provided). In order to assure that users be supplied with such adequate
information as not to offer unfair competitive advantages to access operators, AGCOM
promptly took action (Resolution no. 83/05/CIR) for the purpose of laying down
detailed methods to discontinue “412” numbers, and prescribed that operators convey
announcements with adequate characteristics for at least six months on the same
number.
Resolution no. 83/05/CIR required that operators disclose service rates, which
are then published on AGCOM’s web site so to enable users to compare different offers
easily.
On the whole, the supervisory action aimed at protecting users and market
competitive conditions covered several aspects related to the compliance with the
conditions on which the number allocation is based.
In particular, AGCOM’s monitoring action was focused both on the need to
assure adequate free-of-charge information to users with regard to service rates, and on
the need to provide a nationwide service that could be reached by all communications
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networks, including mobile ones, as well as on checking compliance with service
charters by electronic communications operators.
In connection with the last aspect it should be highlighted that service charters
submitted by operators were examined pursuant to the reference resolutions (General
Directive under Resolution no. 179/03/CSP, and fixed-line service Directive under
Resolution no. 254/04/CSP).
Each time the monitoring action stressed that current rules, though abided by,
were not sufficient, especially in view of an adequate user protection, AGCOM
considered the advisability to take action in order to make express regulatory
amendments. To that end, having established that competition dynamics did not appear
to be effective, by themselves, in bringing about a drop in the level of directory inquiry
service rates, AGCOM thought it necessary to introduce (with Resolution no. 8/06/CIR)
measures aimed at decreasing the maximum rate ceilings set before, so taking down to €
1.20 (exclusive of V.A.T.) the maximum rate per minute and keeping the maximum rate
per answered call equal to € 0.30 (exclusive of V.A.T.). A maximum rate equal to €
1.50 (exclusive of V.A.T.) was also set for flat rates.
The same regulation also introduced the obligation of the user’s explicit
acceptance of the call completion service, to be conveyed by pressing “1” on the
telephone keypad.
Analysis of the terms and conditions of service provision to the public offered by
Telecom Italia through their general price list
Rates included in Telecom Italia’s offers intended for general customers are
submitted to an inspection in accordance with the implementation of the price cap
system.
In 2003 AGCOM enacted Resolution no. 289/03/CONS setting forth the
“Regulation and control of the maximum rates of voice telephony services offered by
Telecom Italia”, which introduced innovations into existing regulations laid down in
Resolution no. 171/99, as subsequently amended by Resolutions no. 847/00/CONS and
no. 469/01/CONS.
The new price control system is applicable until 31 December 2006.
Obligations set out in Resolution no. 289/03/CONS have covered access services,
switched traffic services (local and inter-district calls) and, since 2004, with regard to
fixed-to-mobile calls, the change in Telecom Italia’s revenue per minute (retention),
which adds to the termination rate charged by mobile operators in the shaping of the
price paid by the end user. As to international calls from fixed lines, having regard to
such an extensive and complex offer of intermediate international traffic termination
services which characterizes a challengeable market, AGCOM decided not to impose a
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price-cap system on these services, as it intends to reconsider this assessment upon the
outcome of market analyses required by the new European regulatory framework.
The following table shows obligations imposed by the price-cap system adopted
on variation of the value (which is obtained by multiplying rates by quality) of the
consumption basket of services which are submitted to inspection, to be calculated
according to the IPC (Consumer Price Index for blue-collar and white-collar families)
figure for the years 2003, 2004, 2005, and 2006.
Table 2.1. Price-cap obligations as laid down in Resolution no. 289/03/CONS (%)
Sets Resolution 2003 2004 2005 2006
obligations obligations obligations obligations*
obligations
Access IPC - 0 +2.3 +2.5 +2.2 +1.9
Residential subscription
fees IPC - IPC 0 0 0 0
Switched traffic IPC - IPC 0 0 0 0
Fixed-to-mobile (retention) IPC - 6 - -3.50 -3.80 -
4.10
Source: AGCOM |*The real values of the maximum percentage variations admitted by the price cap must
take into account any possible amount to be carried forward from the previous year, resulting from the
achievement either of price increases lower than those allowed, or of reductions higher than required, in
that period; for the year 2005, because of amounts carried forward, the +2.2% and –3.80% figures became
+3.46% and –3.79% respectively, while for 2006 the +1.9% and –4.10% targets were recalculated
respectively as +3.45 and –4.09.
In order to fulfil the obligations pursuant to Resolution no. 289/03/CONS four
measures were taken by Telecom Italia within the May 2005-April 2006 period with
regard to the general rates of telephone services offered to the public.
The first measure came into force on 1 September 2005, and involved fixed-to-mobile
service rates with the following changes in the rate charged to the public:
For residential users, a decrease both in the set-up rate and in the off-peak
bracket rate, respectively equal to 34.4% and 16.7%, and a change approximately
between –10.1% (Wind) and +30.4% (H3G) in the peak bracket rate per minute;
For business users, a decrease in the rate per minute (undifferentiated between
peak and off-peak brackets) approximately between 0.9% (H3G) and 31.8% (Wind).
Table 2.2. 1 September 2005 measure involving fixed-to-mobile traffic rates (in eurocents, exclusive
of V.A.T.)
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Residential Business
Existing New Existing New
Set up 10.00 6.56 6.56 6.56
TIM Peak (min) 18.21 17.96 16.31 13.30
Off-peak (min) 12.00 10.00
Set up 10.00 6.56 6.56 6.56
VODAFONE Peak (min) 17.80 17.43 18.02 15.00
Off-peak (min) 12.00 10.00
Set up 10.00 6.56 6.56 6.56
WIND Peak (min) 25.98 23.35 22.67 15.46
Off-peak (min) 12.00 10.00
Set up 10.00 6.56 6.56 6.56
H3G Peak (min) 24.98 31.93 19.59 19.41
Source: AGCOM
Off-peak (min) 12.00 10.00
It should be highlighted that the extent of variations and their starting date are
due to AGCOM’s intervention, which resulted in the adoption of Resolution no.
286/05/CONS of 19 July 2005, imposing restrictions on the maximum rate level
chargeable by TIM, Vodafone and Wind for the wholesale termination service on their
networks as from 1 September 2005.
The following table shows the outcome of this measure compared to price-cap
targets fixed for 2005 for the fixed-to-mobile set, and highlights compliance with the
restriction and the achievement of a 0.01% credit (due to a higher than required
decrease in rates).
Table 2.3. Impact of the 1 September 2005 measure
Set Variation in the basket value
Situation 2005 target Credit
(€ million) % (€ million) % %
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Fixed-to-mobile (retention) -19.2 -3.80 -19.1 -3.79 0.01
Source: AGCOM
The additional obligation to spread the expense reduction over the year (the so-called
linearization), pursuant to Resolution no. 847/00/CONS, could not be abided by as the
measure was shifted from 2 July to 1 September; AGCOM then decided that the
recovery had to be achieved by bringing forward to May 2006 the entry into force of the
variations in fixed-to-mobile traffic rates set for this year.
The second measure, being the last one adopted in 2005, involved access service fees
for business customers – with the exclusion of ISDN access – and produced a 4.9%
increase (compared to the reference represented by the increase in value of the same
basket with rates on 31/12/2004) in the value of the consumption basket for this user
category (while considering the whole access segment, the increase was equal to
1.91%).
The measure successfully concluded the implementation of the price-cap system for
2005, and the result achieved is shown in the following table.
Table 2.4. Price-cap targets for 2005
Credit
Variation in the basket value
Situation at year end 2005 target
(€ million) %* (€ million) % %
Access services +85.1 +1.91 +154.4 +3.46 1.55
Residential fees (sub cap) 0.00 0.00 0.00 0.00 0.00
Traffic services -0.67 -0.02 0.00 0.00 0.02
Fixed-to-mobile retention -19.2 -3.80 -19.1 -3.79 0.01
Source: AGCOM | *Percentage variation with respect to the reference represented by the increase in
value of the 2003 basket with prices on 31/12/2004
In the period until 30 April of this year, another measure was implemented with regard
to fees for all access services offered to business customers. The implementation of
rates offered by Telecom Italia resulted in a 3.45% upswing (approximately equal to €
153.2 million) in the increase in value of the access basket with respect to the reference
represented, for 2006, by the increase in value of the consumption basket of 2004 access
services with rates effective on 31 December 2005.
The following table shows variations in access service rates for business customers, as
adopted on 31 December 2005 and on 1 January 2006.
Table 2.5. Variations in access service rates for business customers before the measure and as from
31 December
2005 (in €, exclusive of V.A.T.)
Rates
Business customer fees Before the measure As from 31/12/2005
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Two-way connections – Category A 18.30 18.5
Inbound one-way connections – Category A 18.30 18.50
GNR (group with a limited number of lines) connections 28.30 28.50
GNR connections with direct dialling 35.30 35.50
GNR connections – 2 Mbit/s 22.30 22.50
GNR connections – 2 Mbit/s with direct dialling 28.30 28.50
Source: AGCOM
Table 2.6. Variations in access service rates for business customers, as adopted on 31 December
2005 and as from
1 January 2006 (in €, exclusive of V.A.T.)
Rates
Business customer fees On 31/12/05 As from 01/01/06
Two-way connections – Category A 18.50 19.20
Inbound one-way connections – Category A 18.50 19.20
GNR (group with a limited number of lines) connections 28.50 30.00
GNR connections with direct dialling 35.50 37.00
GNR connections – 2 Mbit/s 22.50 24.00
GNR connections – 2 Mbit/s with direct dialling 28.50 30.00
Basic ISDN single access 29.25 29.95
Basic ISDN multiple access Two-way/outbound channels 28.25 29.75
Basic ISDN multiple access Two-way/inbound channels 20.75 22.25
Basic ISDN multiple access GNR channels 48.25 50.75
Basic ISDN multiple access GNR channels with direct dialling 63.25 64.75
ISDN PRA Two-way/outbound channels 14.75 15.55
ISDN PRA Inbound channels 11.25 12.05
ISDN PRA GNR channels 21.75 22.55
ISDN PRA GNR channels with direct dialling 27.75 28.55
Source: AGCOM
The following table shows the impact of the measure as regards price-cap targets set for
2006 with regard to the access segment.
Table 2.7. Impact of the 1 January 2006 measure
Set Variation in the basket value
Situation at year end 2005 target Credit
(€ million) % (€ million) % %
Access +55.08 +1.24 +153.4 +3.45 1.55
Source: AGCOM
In accordance with the intention, arisen in 2005, to bring forward to May 2006 the
measure relating to fixed-to-mobile traffic rates in order to make up for the delay built
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up in cutting rates at that time, a variation in fixed-to-mobile traffic rates was
subsequently approved, with effect from 7 May, as shown in the following table.
Table 2.8 Variations in fixed-to-mobile traffic rates (in eurocents, exclusive of V.A.T.)
Residential Business
Existing Proposed Existing Proposed
Set up 6.56 6.56 6.56 6.56
TIM Peak (min) 17.96 17.33 13.30 13.17
Off-peak (min) 10.00 10.00
Set up 6.56 6.56 6.56 6.56
VODAFONE Peak (min) 17.43 17.02 15.00 14.91
Off-peak (min) 10.00 10.00
Set up 6.56 6.56 6.56 6.56
WIND Peak (min) 23.35 22.14 15.46 15.12
Off-peak (min) 10.00 10.00
Set up 6.56 6.56 6.56 6.5
H3G Peak (min) 31.93 33.32 19.41 19.90
Source: AGCOM
Off-peak (min) 12.00 10.00
With regard to price-cap targets for 2006, the proposed measure has lead to the
following situation, as shown in the following table: the reduction is completed pursuant
to Resolution no. 289/03/CONS for the fixed-to-mobile traffic rate retention.
Table 2.9. Impact of the 7 May 2006 measure
Set Variation in the basket value
Situation at year end 2005 target Credit
(€ million) % (€ million) % %
Fixed-to-mobile (retention -20.7 -4.09 -20.7 -4.09 0.0
Source: AGCOM
Analysis of the terms and conditions of service provision to the public
offered by Telecom Italia through discounted packages and special offers
Under article 66, paragraph 1, letter a of the Code of Electronic
Communications, “pre-existing obligations still hold regarding retail rates for the
provision of access services and for the use of the public telephone network” until a
review is carried out and a decision is made pursuant to the retail market analysis
procedure laid down in the European Commission Recommendation. AGCOM then
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carried out assessments concerning Telecom Italia terms and conditions of offer to the
public pursuant to Resolutions no. 152/02/CONS and no. 47/03/CONS setting forth
criteria aimed at assuring compliance with the principles of transparency, cost
orientation and non-discrimination.
In particular, for the purpose of assuring full implementation of the principle of
equal internal and external treatment by Telecom Italia, Resolution no. 152/02/CONS
lays down special procedures to assess the so-called package offers, in order to verify
both the cost orientation of prices of services offered by the notified operator, and the
replicability of similar offers by an effective competitor, by means of price tests. These
tests entail that the average rate proposed for each traffic area should exceed two
threshold levels aimed at verifying cost recovery and offer replicability.
On the other hand, Resolution no. 47/03/CONS lays down criteria to be followed
in order to assure implementation of the principle of invariance of the retention applied
by Telecom Italia as regards fixed-to-mobile traffic with respect to other mobile
operators.
Several offers were submitted by Telecom Italia and assessed by AGCOM in the
May 2005-April 2006 period, and the analysis carried out by AGCOM sometimes
resulted in the need to require a change in the price terms proposed by the notified
operator, in order to assure full compliance with current regulations. Mention is made in
particular of the outcome of the supervisory action carried out with regard to the
“Teleconomy caffè” offer, intended for Telecom Italia’s business customers and
involving a € 0.80 additional charge per line for each day the customer makes even just
one national voice traffic call. AGCOM’s intervention brought about a change in the
offer price terms initially assembled by the operator, with regard both to the tariff
structure of national calls, and to price terms set for fixed-to-mobile traffic, in order to
assure that the same retention value be applied to all mobile operators. To that end
AGCOM conducted an inspection on the methods used by Telecom Italia to extract
client data which were used for the ex-ante assessment.
For the purpose of monitoring offer subscribers’ consumption and verify
compliance with the price test, AGCOM also prescribed that Telecom Italia should
submit, on a two-monthly basis, consumption data relating to the first year the offer was
on sale.
AGCOM’s supervisory action also concerned the “Teleconomy no problem”
offer intended for Telecom Italia’s residential users and characterized by a flat monthly
fee allowing to make unlimited national calls and by the general price list being applied
to other types of calls.
With respect to this offer a complex assessment procedure had to be carried out,
which required in-depth analyses of the offer replicability and regulatory assessments
on the tariff structure proposed by Telecom Italia and involving rate differentiation
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according to the termination operator. With regard to the latter aspect AGCOM
confirmed the non-admissibility, until the entry into force of the measures regulating the
analysis of the relevant markets, of rate differentiation between calls originating from
and terminating on Telecom Italia’s network (“on-net calls”) and calls originating from
Telecom Italia’s network and terminating on another operator’s network (“off-net
calls”).
With regard to the replicability of the “Teleconomy no problem” offer, following
AGCOM’s intervention Telecom Italia changed the price terms initially proposed and,
after an assessment of the new proposal also based on analysis facts and data supplied
by some alternative operators, the sale of this offer was allowed provided that it be
subject to a new replicability verification based on final consumption data relating to the
first six-month period.
This verification is currently being carried out by AGCOM.
The analysis of the “Top business” offer - intended for Telecom Italia’s business
customers and characterized by different rates applied according to different traffic
types - highlighted the possibility that the replicability threshold could be exceeded, so
requiring closer examinations on the competition dynamics existing in the reference
market. These examinations, which also took account of alternative operators’
contributions, did not result in any impedimental factors to the sale of this offer.
Another offer by Telecom Italia, which required a long and complex assessment
procedure and a complex series of discussions with the company, involves Internet dialup
connection on a flat basis, allowing to access the Internet every day round the clock
with no time limit. This offer is intended both for residential users, with the
“Teleconomy Internet” trade name, and for business users, with the “On-line business”
trade name. Several closer examinations were required, also from a regulatory
viewpoint, in order to analyse such offer, with regard to the use of numbers initially
proposed, and to the terms of offer replicability.
In this connection it should be highlighted that, as far as replicability by other
operators is concerned, the structure of Telecom Italia’s offer proposed to end users
refers to the FRIACO (Flat Rate Internet Access Call Origination) offer and features
several peculiarities, compared to the usual methods set for the application of
algorithms included in price tests.
However, considering that there are no special obligations currently setting out
the level of quality to be supplied to the user of an Internet dial-up access service, the
ex-ante assessment stressed the existence of some critical aspects as regards compliance
with the obligations of transparency and fair information towards end users.
AGCOM then allowed Telecom Italia to roll out the offer making it conditional both on
publication of quality indicators as set out in Resolution no. 25/01/CIR, pursuant to the
methods laid down in it, and on the outcome of a subsequent verification.
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The verification based on final data relating to the first six months when the
offer was on sale is currently being carried out.
Lastly, mention should be made of the peculiar problems arisen from the analysis of the
price terms set for the fixed-to-mobile traffic in connection with offers intended both for
residential users – “Teleconomy famiglia” – and for business users – “Teleconomy one
office”. By an additional monthly charge both allow to use a given number of traffic
minutes towards selected numbers belonging to the same mobile operator, while
charging specific rates to the rest of the traffic, to be intended both as traffic exceeding
the minute ceiling set in the offer, and as traffic towards mobile operators different from
the selected one.
In some cases AGCOM’s action revealed a price discriminatory practice applied
by Telecom Italia with respect to some operators, and the existence of criticalities
relating to special discounts, with regard to the replicability of rates fixed for the call
minutes spent within given ceilings.
With respect to these offers, given the special tariff structure not generally
allowing to calculate with sufficient exactness, on the basis of ex-ante assumptions, the
traffic shares achieved within and outside the ceiling, AGCOM deemed it necessary to
start an appropriate monitoring of offer consumption in order to carry out precise
verifications based on data submitted by Telecom Italia at regular intervals as to
subscribers’ actual consumption.
The same considerations hold for the verifications carried out with regard to
international traffic discount terms, offered by Telecom Italia through special options
applicable to several offers, the so-called “package offers”.
In more general terms, in the light of recent preliminary assessment
investigations and of a well-established experience, AGCOM confirmed the need to
monitor the actual trend of consumption involving offers launched on the market by
Telecom Italia, a need which had already emerged in the past and has become even
more relevant in time.
This aims at identifying any possible critical aspects that might arise following
changes in consumers’ behaviours driven by the special nature of offers, also in view of
the special structure of the proposed offers, which more and more frequently involve the
possibility to choose complex pricing and discount lines on which the ex-ante analysis
might prove insufficient.
In carrying out its supervisory action, AGCOM also constantly monitors
Telecom Italia’s compliance with AGCOM’s guidelines on the non-sale of offers, as
well as any non-submission of the required information.
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Rate ceiling supplement for the provision of services related to special
numbers
In accordance with the National Numbering Plan, the use of “0878” numbers is
provided for within limited timeframes in order to allow a considerable number of users
to participate in events entailing a very high number of call attempts within a given
lapse of time. In particular, among sets of numbers allocated to mass calling services,
numbers with the “0878” dialling code are intended for the “phone-in voting” service,
as they allow to count callers’ votes by selecting a specific number to be dialled after
the “0878” code.
Following complaints filed with AGCOM with regard to the use of such
numbers not being in accordance with provisions laid down in the National Numbering
Plan, AGCOM deemed it necessary to take action (by Resolution no. 65/05/CONS) in
order to introduce urgently, pending the end of the investigation, a rate ceiling for
“0878” numbers equal to what is laid down for the 1 st cost bracket in table 2 attached to
the National Numbering Plan, namely equal to € 0.0656 (exclusive of V.A.T.) for the
charge per answered call and to € 0.2293 (exclusive of V.A.T.) for the rate per minute.
During the investigation AGCOM found cases of illegitimate use or even fraud
in the use of “0878” numbers (see par. 3.7.), and consequently deemed it necessary to
confirm (with Resolution no. 84/05/CIR) the measure introduced urgently under article
2, paragraph 1, Resolution no. 65/05/CIR, as it considered the rate ceilings set therein to
be adequate to the uses these numbers are intended for.
Allocation of number resources to the Department of Equal Opportunities
of the Council of Ministers
Following a request by the Department of Equal Opportunities of the Council of
Ministers, AGCOM allocated to them (with Resolution no. 69/05/CIR) the “1522” help
line in order to grant callers free-of-charge access to a communications service aimed at
providing support to women victims of violence.
In particular, this number was allocated in order both to set up a call centre
dedicated to calls from women who have been experiencing violence – inside and
outside the family – and to provide them with first psychological and legal help, and
with specialist help aimed at receiving and referring callers to public and private
institutions (antiviolence centres, law enforcement authorities, health centres) based
throughout the national territory and able to face the problems arising from such events.
2.3. MOBILE
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In 2005, besides carrying out its supervisory action with regard to compliance with
current rules and regulations by providers of mobile and personal communications
services, AGCOM implemented regulations mostly regarding issues and problems
arisen in the framework of market analysis investigations (see par. 2.1.). In particular, in
the reference period regulatory and supervisory actions carried out by AGCOM with
regard to mobile telephony covered the following areas:
• SIM lock function applicability;
• supervising compliance with current regulations regarding mobile number
portability;
• mobile television service regulation.
SIM lock
AGCOM took action for the purpose of laying down regulations with regard to the
SIM lock function, and on 9 December 2005, with Resolution no. 66/05/CIR, it
undertook a public consultation on the SIMlock function implemented by mobile
network operators.
The lock is obtained through a special software configuration of the handset which
binds its use to specific SIM cards. The lock can be activated either by the SIMlock
mode or by the operator lock mode.
If the SIMlock mode is activated, the handset can only work with a special SIM or
USIM (for UMTS applications) card supplied by the operator which provides both the
handset and the mobile communications service. In the operator lock mode, the handset
can only be used with SIM/USIM cards issued by the mobile network operator which
has supplied the handset.
Following the above consultation, on 21 February 2006 AGCOM passed
regulations relating to the SIMlock with Resolution no. 9/06/CIR. This measure applies
to the sale of handsets by mobile and personal communications service providers,
regardless of the contract or lock type, without prejudice to the user’s right to receive
clear and transparent information also in case of handset rental or gratuitous bail. The
above resolution lays down guarantees of more transparency in the supply of
information to customers and, to that end, also deals with aspects concerning methods to
take out the contractual terms and conditions. Restrictions are also imposed on the
SIMlock function and rules are laid down to guarantee handset full operating capability
once the SIMlock period is over.
As to transparency guarantees in the supply of information to customers,
protection rules were laid down in line with the 1996 European Community advice and
with actions taken in other Countries. In this connection, provisions require that the
mobile and personal communications service provider offering handsets with the
SIMlock feature shall assure full disclosure of information, including that relating to
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handset use restrictions when the SIMlock is activated, the value of the applied subsidy,
the cost of the de-SIMlocked handset, the SIMlock activation term, and the methods to
remove the SIMlock once the term is over. With regard to taking-out methods, a
separate and special information fact sheet shall be used subject to explicit acceptance
by the customer.
As regards applicability limits, AGCOM prescribed that SIMlocked handsets
shall be de-SIMlocked after 9 months, upon the user’s request, upon payment of an
amount not exceeding 50% of the value of the subsidy granted by the operator at the
time of the purchase, and, in any case, free of charge at the end of an 18-month period.
With regard to the handset full operating capability guarantee at the end of the
SIMlock term, the communications service provider offering handsets shall guarantee
that the latter, once deactivated, can work with all mobile networks with no limitations
in terms of effectiveness and services.
Supervisory action as regards compliance with the current regulation on
mobile number portability
Mobile number portability (MNP) among mobile and personal communications
service network operators enables users who decide to switch to another operator for the
provision of mobile, voice and data services to keep their telephone number.
Since early 2005 an increase has been reported in applications for mobile number
portability. To that end, AGCOM has encouraged operators to enter into an agreement
under which, since 31 August 2005, each operator has increased the maximum number
of applications that can be processed on each working day, so causing an increase from
5,000 (as from 26 April 2004) to 5,700 (as from 31 August 2005), and later to 7,500 (as
from 17 October 2005) in the number of portability transactions carried out.
AGCOM’s monitoring action later highlighted a significant delay in the
processing of portability applications, in particular by Telecom Italia and Vodafone
towards H3G, as for the relevant applications the processing capability provided by
these operators proved insufficient. This brought about a protraction in the service
provision time. As a consequence, by means of Resolution no. 17/06/CIR, AGCOM
decided to further increase the processing capability by setting it to 9,000 daily
transactions. This Resolution also provided for the undertaking of initiatives aimed at
making additional processing capabilities available in order to process portability
applications left outstanding by Telecom Italian and Vodafone towards H3G.
AGCOM also took action by requiring the adoption of precise processing
methods, in order to assure that the correct order be kept in handling applications.
By April 2006 more than 8 million users had switched to another operator while
keeping their telephone number. Approximately 45% of migrations have occurred over
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the last year, so confirming users’ deep interest in the mobile number portability
service.
The following figure shows the trend of the total number of portability
transactions carried out since 2002, when the service was rolled out in Italy. Data were
gathered by AGCOM in the context of the portability process monitoring action.
Figure 2.1. Mobile number portability – ported numbers (in thousands)
Dec-02 March-03 June-03 Sep-03 Dec-03 March-04 June-04 Sep-04 Dec-04 March-05 June-05 Sep-05 Dec-05 Apr-06
Source: Data supplied by operators and processed by AGCOM.
The following table shows inbound and outbound portability broken down by
mobile operators. Data relating to portability towards TIM GSM include numbers
originating from TIM TACS, as reported at the end of April 2006.
Table 2.10. Mobile number portability broken down by mobile operators on 30 April 2005 (%)
Donor Recipient
H3G 5.8 22.8
TIM GSM 33.0 33.3
TIM TACS 6.1 0.0
VODAFONE 28.9 23.8
WIND 26.3 20.1
TOTAL 100.0 100.0
Source: Data supplied by operators and processed by AGCOM.
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Mobile television services
In 2005, in the light of recent technologic and market advances AGCOM undertook
a survey on mobile TV (DVB-H, Digital Video Broadcasting-Handheld) aimed at
assessing the need to adopt regulations within its remit with regard to:
• frequency planning;
• frequency allocation procedures;
• access and services regulation;
• protection of competition and pluralism;
• offer transparency and consumer protection.
Within the framework of this survey, AGCOM undertook a public consultation
aimed at gathering information and documentation facts regarding the potential
development of television - also interactive - services usable on mobile handsets.
Survey results were published on AGCOM’s web site and highlighted a substantial
interest by the market with regard to mobile TV services, both by undertakings
traditionally working in the television industry, and by mobile operators, as well as, in
general, by telecommunications operators. The survey also highlighted the existence of
different technologies devised for the broadcasting of television programmes that can be
picked up by mobile handsets.
Among the leading solutions, either standardized or currently being set up within
a European framework, are DVB-H (Digital Video Broadcasting-Handheld), T-DMB
(Terrestrial-Digital Multimedia Broadcasting), UMTS-based MBMS (Multimedia
Broadcasting Multicast Service), and hybrid terrestrial-satellite solutions, still at a
research level, such as S-DMB (Satellite-Digital Multimedia Broadcasting) and
DVBH+ (Digital Video Broadcasting Handheld-Satellite).
The survey also highlighted the peculiarities of TV programmes receivable on
mobile handsets’ small screens, both in terms of the low-resolution picture’s technical
features, and in terms of format and aggregation of programme schedules composed of
short-duration programmes.
Another significant aspect is the high number of programmes that can be
broadcast on a single radio channel, up to 30 with DVB-H technology.
Following the survey results, AGCOM approved a draft regulation - “Supplement to
Resolution no. 435/01/CONS. Regulation governing the roll-out phase of digital
terrestrial broadcasting towards mobile handsets” - which proposes a first regulatory
approach with regard to the roll-out of DVB-H mobile-TV services in television
frequency bands.
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In April 2006 the approved draft regulation (Resolution no. 191/06/CONS) was
submitted to public consultation in order to gather opinions by all the parties involved.
On the whole, the consultation confirmed the line followed by AGCOM’s draft
regulation and led to the enactment of Resolution no. 266/06/CONS regulating the startup
phase of digital terrestrial broadcasting towards mobile handsets, in line with the
leading criteria and principles set forth in the Code of Electronic Communications and
in the Consolidation Act on radio and television broadcasting. Said regulation aims at
enabling operators to start mobile TV services based on the DVB-H system, pending a
development of the EU regulatory framework and the implementation of the frequency
plan, also in connection with the actual development of digital terrestrial television
programmes towards mobile handsets, both from a technological point of view and in
terms of an increase in users’ demand, within a framework of legal certainty.
In particular, in regulating authorizations for the broadcast of digital terrestrial
television programmes towards mobile handsets, in the light of the technological
neutrality principle, it is prescribed that the same regulations should be applied to
authorizations as laid down in the legislative and regulatory provisions currently
applicable to providers of digital terrestrial television content under articles 2-11 of
Resolution no. 435/01/CONS, as well as the obligation to adopt the service charter
under article 12, paragraph 4 of the same resolution.
The regulation also sets a limit with respect to the market start-up phase,
according to which no undertaking is allowed to operate with more than a multiplex
conveying programmes towards mobile handsets. This is in compliance with pluralism
and competition principles as laid down in article 29 of Resolution no. 435/01/CONS,
without prejudice both to current antitrust restrictions governing the supply of
programmes, and to the principle, to which explicit reference is made in article 4,
paragraph 1, letter f, of the need to broadcast an adequate number of uncoded
programmes for user protection purposes.
2.4. INTERNET AND BROADBAND
In 2005, AGCOM’s action with regard to the Internet mainly involved the
analysis of ADSL broadband access service offers and the regulation of new VoIP
(Voice over Internet Protocol) services.
Analysis of ADSL broadband access service offers
As regards ADSL broadband access services, compliance of Telecom Italia’s
retail and wholesale ADSL service offers with current regulations was verified.
Major regulatory references for the analysis of these offers are Resolution no. 6/03/CIR,
covering “Telecom Italia’s wholesale xDSL services offers and changes to the singleaccess
flat offer”, and Resolution no. 34/06/CONS, covering the “Wholesale broadband
access market: market identification and analysis, assessment of the existence of
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undertakings with a significant market power and identification of regulatory
obligations (market no. 12 among those identified by the European Commission
Recommendation on the relevant product and service markets)”.
In particular, pursuant to Resolution no. 34/06/CONS, in the period between its
entry into force and the approval of Telecom Italia’s bitstream services Reference Offer
(presently being assessed), the minus value to be used to set the pricing terms of offer of
ADSL wholesale services, according to the retail-minus principle, “cannot be fixed
under 30%” (article 12, paragraph 3), and “the information about retail and wholesale
offers shall be supplied according to all methods and deadlines under articles 1 and 2 of
Resolution no. 6/03/CIR” (article 12, paragraph 4).
Among Telecom Italia’s most relevant offers of ADSL services analysed by
AGCOM in the period being examined, the retail 640 kbit/s flat ADSL offer and the
retail 20 Mbit/s flat ADSL offer should be mentioned in particular for their innovative
nature.
In order to grant competitors the possibility to repeat Telecom Italia’s retail 640
kbit/s flat ADSL offer - sold at € 19.95 per month (exclusive of V.A.T.) as of 17 July
2005 - pricing terms of the wholesale pay-per-use ADSL offer were modified (by using
the fee-based option as a basis for the replicability check) by decreasing monthly fee
rates and traffic charges and by introducing a monthly-charge ceiling. On the basis of an
average monthly consumption assumption (based on traffic surveys relating to another
retail offer already launched on the market by Telecom Italia), by the above changes it
was possible to guarantee a 30% minus level considered to be adequate to assure pricing
replicability of Telecom Italia’s new retail offer.
Following the offer roll-out, on the basis of a monitoring action carried out on
subscribers’ consumption during the first months of sale, AGCOM required that the
wholesale ADSL offer be further modified by introducing a flat-based pricing aimed at
guaranteeing a steady 30% minus level free from user consumption dynamics.
With regard to Telecom Italia’s retail 20 Mbit/s ADSL flat offer, the relevant
assessment was started on 7 November 2005 following receipt of Telecom Italia’s
relevant offer proposal. The offer roll-out was subject to Telecom Italia’s assembling a
wholesale service allowing alternative operators to repeat the offer, as the LLU (local
loop unbundling) and SA (shared access) offers were not considered to be adequate to
that end, for their being usable only by operators equipped with some level of
infrastructures.
Telecom Italia then assembled an intermediate service offer of the end-to-end
type, called “managed IP”, by which alternative operators can provide users with an end
service with the same features as that supplied by Telecom Italia, without the need to be
equipped with additional infrastructures. Operators acquiring the “managed IP” service
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only have to provide any additional ISP (Internet Service Provider) services as far as
Internet access and the commercial activities to be carried out are concerned.
Pending the approval of the bitstream service reference offer pursuant to
Resolution no. 34/06/CONS, the replicability of Telecom Italia’s new retail 20 Mbit/s
ADSL flat offer was assessed on the basis of the “managed IP” offer. Considering the
above-mentioned characteristics of this end-to-end intermediate service, the replicability
assessment minus was fixed at a 20% level, which was considered to be adequate to
assure coverage of non-relevant costs and the achievement of a reasonable profit margin
on a pure-resale service. Based on these considerations Telecom Italia was required to
republish the “managed IP” offer with suitable changes to the relevant pricing terms
and to other technical aspects of the offer which were thought to be inadequate, so that
the offer roll-out date initially advertised to end users consequently had to be postponed.
Voice over Internet Protocol (VoIP) service regulation
As regards VoIP services, in July 2005 with Resolution no. 26/05/CIR AGCOM
undertook a public consultation with respect to some draft regulatory measures relating
to the supply of these services. At the end of the preliminary investigation AGCOM was
one of the first regulators in Europe to adopt such provisions, with Resolution no.
11/06/CIR, setting forth “Regulations on the supply of VoIP (Voice over Internet
Protocol) services, and supplement to the National Numbering Plan”.
This resolution is a significant milestone towards the development of
telecommunications services, as it lends full dignity to VoIP-based services, to be
broken down into:
• nomadic voice communications services (with unlimited nomadism allowed),
enabling users to make and receive multimedia voice calls from any network
access point, also a wireless one, at national and international level. For the
provision of these services the resolution lays down so-called “light”, lowimpact,
regulations;
• Publicly Available Telephone Services(PATS) at fixed locations (with nomadism
allowed only within the originating telephone district) by which conventional
telephone services beginning with “0” can either be repeated or increased by
new functions by using the VoIP technology. For the provision of these services
Resolution no. 11/06/CIR lays down the same regulations currently in force for
conventional telephone services.
Nomadic voice communications services are allocated a set of numbers beginning
with the code “5” and purposely introduced in the National Numbering Plan by the
above resolution.
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Resolution no. 11/06/CIR allows VoIP to be used as an architecture either to repeat
conventional telephone services or to provide converging – thanks to nomadism –
multimedia services and advanced-function services such as the “presence” service and
the instant messaging service.
By virtue of the peculiarities which distinguish VoIP technologies from
conventional ones, AGCOM’s action has sanctioned some important principles which
are essential in order to guarantee that a competitive market could be developed, while
assuring due transparency to end users with regard to the service they buy in terms of
quality, functionality and rates.
In particular, Resolution no. 11/06/CIR provides for:
• the right for an operator, once they have been authorized to provide VoIP
services (beginning either with “0” or with “5”), to negotiate interconnection
with other operators;
• the right for numbers beginning with “5” to be included in telephone directories;
• the right to number portability for numbers beginning with “5”;
• numbers beginning with “5” to be fully reachable from and towards all national
and international numbers;
• the presence of regulatory precautions aimed at avoiding that rates of calls
towards numbers beginning with “5” stabilize at higher levels than the cost of
calls towards numbers beginning with “0”,
• the requirement that interconnection be negotiated among operators in the most
effective way (for example, IP-to-IP, instead of covering the double route IP-to-
SS7-to-IP);
• the free choice of the number portability handling system, during services’ startup
phase;
• the requirement to use standard, i.e. not proprietary and closed, protocols;
• the requirement to guarantee full interoperability of offered services, i.e. to allow
multifunction communications between two users tied to different operators;
• the requirement to allow access to interconnection interfaces and to their
relevant technical specifications;
• implementation of full nomadism for services linked to numbers beginning with
“5”.
In order to protect end users calling from numbers beginning with “5” regulations
introduced by AGCOM require that operators:
• should allow access to emergency services;
• should supply adequate transparency as to any service restrictions.
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Lastly, as the next step Resolution no. 11/06/CIR provides for the start of a
preliminary investigation covering interoperability, IP interconnection and the location
of users making calls to emergency numbers.
2.5. SANCTIONING ACTIONS INVOLVING TELECOMMUNICATIONS AND
THE
INTERNET AND DISPUTES BETWEEN OPERATORS
Violations relating to electronic communications by telecommunications
and Internet operators
As regards the breach of provisions in the field of electronic communications by
telecommunications and Internet operators, in the May 2005-April 2006 period
AGCOM initiated 57 sanctioning proceedings, 38 of which have already been
concluded by adopting some measures, while 19 are still pending.
On the whole, 9 proceedings were concluded with the issuance of an order-injunction,
while in 27 cases operators had recourse to the right to pay a reduced fine under article
16 of law no. 689 of 24 November 1981, and 2 cases were dismissed for “merit
reasons”.
Compared to the previous year, the number of proceedings initiated this year has
more than tripled, in particular due to several violations of requirements concerning
numbering and the provision of extra-charge services.
Details relating to the above cases are highlighted in the following.
In the period considered, 35 cases were initiated for non-compliance with provisions
included in resolutions issued by AGCOM (article 2, paragraph 20, letter c of law no.
481/95), a behaviour punishable by an administrative fine between € 25,823.00 and €
154,937,070.00.
In 31 cases the violation concerned the set of rules laid down in Resolution no
9/03/CIR of 13 July 2003 setting forth the “Numbering plan in the telecommunications
sector and enforcement provisions”. In the specific instance the following proceedings
were initiated: 11 cases relating to article 5, paragraph 2, for failure to convey a voice
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message advertising of the rate charged for services carried out on numbers associated
to extra-charge services, single-number services, and numbers associated to personalnumber
services; 15 cases relating to article 5, paragraph 3, requiring that for numbers
associated to interactive voice services a user should be charged only after the actual
provision of the requested service; 3 cases relating to article 10, paragraph 2 (numbers
associated to network internal services); 1 case relating to the breach of article 11,
paragraph 2, letter b (numbers associated to Internet services) and 1 case relating to the
breach of article 23, paragraph 9 (numbers associated to mass-calling services).
Four proceedings ended with the adoption of order-injunctions and involved
non-compliance with regulations relating to service charters and quality by directory
inquiry service providers.
In the reference period 10 proceedings were initiated with regard to the failure to
convey - according to prescribed deadlines and methods - documents, data and
information required by AGCOM (article 98, paragraph 9, Code of Electronic
Communications), 7 of which ended with the payment of a reduced fine, 2 with the
issuance of order-injunctions, and one was dismissed for “merit reasons”.
Under article 98, paragraph 11 of the Code of Electronic Communications
AGCOM initiated 5 proceedings for non-compliance with the order imposed with
regard to the methods according to which users should have been made aware of the
date of discontinuance of number “12” and the “412” numbering set, and of the
possibility to access directory inquiry services offered by undertakings on “12xy”
numbering sets. Three of these cases were closed with the payment of a reduced fine by
operators, while in two cases order-injunction measures were issued.
In the reference period AGCOM initiated 3 proceedings for breach of provisions
relating to access and interconnection (article 98, paragraph 13, of the Code of
Electronic Communications), in whose respect operators had recourse to the right to pay
a reduced fine. Violations were related to carrier pre-selection obligations (article 3,
paragraph 3 of Resolution no. 3/CIR/99, and article 3, paragraphs 1 and 2 of Resolution
4/00/CIR) and to the failure to supply contracts and documents (article 4, paragraph 7 of
Resolution no. 13/00/CIR).
With regard to the breach of provisions covering users’ rights and the universal
service (article 98, paragraph 16 of the Code of Electronic Communications) 3
proceedings were initiated, all of which ended with the payment of a reduced fine by the
operators involved. Violations concerned article 60, paragraph 2, and article 70,
paragraph 4, of the Code of Electronic Communications.
In the framework of already-concluded sanctioning proceedings, measures
adopted by AGCOM in the May 2005-April 2006 period for breach of current
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egulations by telecommunications and Internet operators are concisely listed in the
following table.
Table 2.11. Regulations involved and number of sanctioning measures adopted in connection
with the breach of current electronic communications provisions
Regulation Reduced-fine payments Orders / Injunctions Dismissals
Article 2(2)(c) of Law no. 481/95 14 5 1
Article 98(9) of Leg.Dec. no. 259/03 4 2 1
Article 98(11) of Leg.Dec. no. 259/03 3 2 -
Article 98(13) of Leg.Dec. no. 259/03 3 - -
Article 98(16) of Leg.Dec. no. 259/03 3 - -
Article 1(31) of Law no. 249/97 - -
Total 27 9 2
Source: data processed by AGCOM
Settlement of disputes between electronic communications
operators
In the May 2005-April 2006 period AGCOM handled the settlement of 17 disputes
arisen between electronic communications operators.
Compared to the previous year a slight increase was reported in the number of initiated
proceedings, as well as more complexity in disputes brought to AGCOM’s notice.
Disputes actually involved matters of special significance, such as termination rates
from mobile and fixed lines; unbundled access users’ transfer procedures; the
interconnection price list for access to “12xy” numbers; implementation of portability
procedures for numbers in the mobile sector; discontinuance of the carrier pre-selection
service; unbundled access to connections of the shared-access copper distribution
network; call forwarding service rates, from mobile phones to geographic numbers.
Undertakings involved in dispute-settlement cases and the relevant outcome are listed in
the following table.
Table 2.12 Settlement of disputes between electronic communications operators
Parties Outcome
MULTIWIRE.NET / TELECOM ITALIA Successful
MULTIWIRE.NET / TELECOM ITALIA Pending
WIND/TIM Successful
WIND/VODAFONE Successful
TISCALI/TELECOM ITALIA Pending
DIGITEL ITALIA/EUTELIA Successful
TELECOM ITALIA/WIND Pending
TELECOM ITALIA/FASTWEB Pending
H3G/VODAFONE Successful
E-VIA/TISCALI Successful
TELECOM ITALIA/WIND Pending
TELECOM ITALIA/H3G Pending
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TELECOM ITALIA/VODAFONE Pending
INFOTEL/WIND Pending
TELEGATE ITALIA/TELECOM ITALIA Pending
FASTWEB/TELECOM ITALIA Pending
WELCOME ITALIA/TELECOM ITALIA Pending
Source: data processed by AGCOM.
Petitioners have often requested the adoption of such measures by AGCOM as
to settle the dispute by binding agreements and have a regulatory value. More and more
significant is then the trend to use the dispute-settlement function as the occasion to
better set out those regulatory aspects which, when implemented and in the light of the
sector’s technical and commercial evolutions, require to be more precisely specified (the
so-called “regulation by disputation”).
In handling proceedings, the opportunity arouse also to explain some procedural
aspects ensuing from the implementation of article 23 of the Code of Electronic
Communications, with special reference to dispute-settlement deadlines, the inclusion
of arbitration clauses within contracts between operators, and the possibility for the
latter to have recourse to jurisdictional bodies. As a matter of fact, AGCOM believes
that the expiry of the four-month deadline, as laid down in paragraph 1 of article 23
above, does not affect AGCOM’s power to settle the dispute, without prejudice to the
operators’ possibility to have recourse to the jurisdictional body.
2.6. TELEVISION
As far as the radio and television sector is concerned, from a regulatory
viewpoint the year 2005 was characterized by the entry into force of the radio and
television Consolidation Act (see. par. 1.2.6.) which, while being essentially a
compilation work aimed at an official coordination of current rules and regulations
governing the radio and television sector, has strongly affected AGCOM’s regulatory,
supervisory and sanctioning actions.
Digital terrestrial television
With regard to the actions carried out in the context of the development of the
digital terrestrial television, in the reference period AGCOM passed, with Resolution
no. 163/06/CONS, an policy provision which provides for the implementation of an
action plan aimed at encouraging a functional use of frequencies intended for radio and
television services, in view of the changeover to the digital technique.
Besides requiring that current regulations governing digital terrestrial television
under Resolution no. 435/01/CONS be revised in accordance with the adoption of
criteria making the 40% transfer of the broadcasting capacity, as provided for by law no.
66/01, an actual and substantial fact, up to the full implementation of the national
frequency allocation plan, this action plan sets out some guidelines that involve the
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adoption of measures supporting competition and pluralism and promoting innovation
and businesses’ productivity.
The action plan laid down in the policy provision identifies in particular a series
of activities aimed both at revising and implementing the National Frequency
Allocation Plan, and at identifying the best routes to be followed in order to carry out a
functional changeover of the radio and television system, from analog to digital. In
order to carry out these activities it is essential to draw a picture of the present situation
by adopting such instruments as allow to assess and classify the equipments existing
throughout the territory. In accordance with the action plan laid down in the policy
provision one of these instruments is represented by the national register of frequencies,
to be set up in a joint effort by AGCOM and the Ministry of Communications’ relevant
departments. AGCOM will also have recourse to the Postal and Telecommunications
Police for the purpose of carrying out on-site inspections.
Besides representing a major instrument for AGCOM to gather data on the
present condition of the radio and television system – this being a prerequisite in order
to carry out an effective changeover from the analog to the digital system – the register
of frequencies will significantly help handle the Register of Communications Operators,
by allowing to supplement it with data relating to broadcasting infrastructures, under
article 1, paragraph 6, letter a, item 5 of law no. 249/97.
The action plan laid down in the policy provision provides for the start of a
revision of the national frequency allocation plan, by checking in particular the
possibility to increase the number of national channels with respect to the current plan
approved by AGCOM in 2003, and for the development of a progressive
implementation schedule, to be consistent with the national frequency allocation plan
while also taking account of the situation of interferences with foreign broadcasts, for
the purpose of solving incompatibility cases.
In particular, in order to carry out the plan implementation schedule, as well as
to revise it, AGCOM can have recourse to a panel of experts, which has already been set
up and is currently working in close cooperation with AGCOM’s structures in charge.
As regards all the aspects mentioned above, in the reference period AGCOM
already carried out a series of studies and put forward preliminary work assumptions to
be tested also by the panel of experts.
In particular, with regard to problems of electromagnetic compatibility between
national and foreign broadcasts, the policy provision (“atto di indirizzo”) stressed the
need “to investigate problems arising from international coordination while supplying
the Ministry of Communications with the necessary help in the preliminary work stage
and during international meetings”. As everybody knows, from an institutional
viewpoint the Ministry of Communications is in charge of coordinating frequencies in
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order areas and entering into the relevant international agreements, either on a bilateral
or multilateral basis or following international frequency planning conferences.
In line with this requirement as set out in the policy provision, AGCOM is
currently helping the Ministry of Communications in the preliminary stage of the
Regional Radiocommunication Conference (RRC06) arranged by the
Radiocommunication Sector (ITU-R) of the International Telecommunications Union,
aiming at the revision of the Stockholm 1961 agreement and at planning the
development of digital terrestrial broadcasting. This help will also be supplied during
the conference, to be held in Geneva from May 15 to June 16 2006.
Lastly, the policy provision provides for the revision of the digital terrestrial
television regulation under regulation no. 435/01/CONS, to be carried out by identifying
criteria for the use of DVB-H and High Definition.
In the reference period AGCOM undertook the revision working jointly also
with market players, consistently with the development of technical innovation and with
the increasing demand for mobile TV services (see par. 2.3.).
This course led to the enactment of Resolution no. 266/06/CONS setting forth
regulations governing the starting phase of digital terrestrial broadcasting towards
mobile handsets, in accordance with criteria and leading principles included in the Code
of Electronic Communications and in the radio and television broadcasting
Consolidation Act. This measure aims at enabling operators to roll out the services
involved within a picture of legal certainty, pending a more precise setting-out of the
EU regulatory framework and the enactment of the national frequency allocation plan
and its relevant implementation schedule.
Media listening/viewing and circulation rating survey (article 1, paragraph
6, letter b, no. 11 of law no. 249/97)
Article 1, paragraph 6, letter b, no. 11 of law no. 249/97 entrusts AGCOM’s
Commission for Services and Products with the task of supervising the fairness of
surveys on listening/viewing and circulation ratings relating to the media, by checking
both the appropriateness of methods used and the truthfulness of published data, as well
as television programme monitoring and the work of survey research firms.
In Italy the current television rating survey system is based on an organisational
model, mainly applied in Europe and based on the survey research firms’ share capital
being shared among the public television company, private television undertakings and
advertising investors (the so-called JIC – Joint Industry Committees – formula).
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In July 2005 AGCOM approved the implementation of a work plan focused on
rating surveys and aimed at improving the way the research system works in
compliance with criteria of fairness, transparency and openness to new technologies.
The work plan involved the following phases:
1. an agreement between AGCOM and ISTAT (the Italian National Statistical
Institute) for the purpose of laying down such tools as can guarantee fairness of
rating surveys and appropriateness of methods used;
2. a technical analysis of the development of new broadcasting platforms and their
impact on ratings;
3. a series of hearings to be carried out with all the parties involved (undertakings,
consumers, survey research firms);
4. adopting a far-reaching policy provision for the purpose of laying down
governance rules aimed at guaranteeing survey independence and neutrality.
In September 2005, with Resolution no. 372/05/CONS AGCOM approved an
agreement with ISTAT aimed at carrying out a methodological research on the quality
of the statistical information spread by the survey on television ratings.
In particular, pursuant to the above-mentioned agreement ISTAT is to draw up three
technical-methodological reports on the following aspects of the Auditel survey:
- the methodology to calculate sampling errors in estimates;
- setting out a system of indicators for the production process quality;
- calculating sampling errors and quality indicators.
The agreement also lays down the setting up of technical-scientific joint
committee composed of seven members (four on behalf of AGCOM and four on behalf
of ISTAT, one of the latter group also being in charge of the project). The Committee
will be responsible for coordinating the research work, establishing the technicalorganisational
methods to carry out the work, and checking its regular progress.
The agreement covers a two-year period as from the signature date, and this term
can be extended upon the parties’ explicit will, notice of which shall be given no later
than three months before the expiry date. AGCOM shall establish the necessary contacts
between ISTAT and the companies entrusted with the task of planning and carrying out
the Auditel survey; these companies shall supply ISTAT – through AGCOM – with the
television ratings survey data and with all information required in order to carry out
analyses and data processing for the drawing-up of technical-methodological reports.
Upon the technical-scientific committee’s favourable advice, AGCOM shall also
put at ISTAT’s disposal either a researcher or a comparable professional profile with
statistical and I.T. qualifications, in charge of carrying out the activities set forth in the
agreement.
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After describing digital terrestrial, satellite and cable networks, the technical
analysis of the development of new broadcasting platforms and their impact on ratings
focused both on the analysis of penetration in the market for different platforms, and on
Auditel system working methods with respect to new technologies. According to this
analysis, the penetration of content on digital television platforms in the offer market
could be globally assessed, in late 2005, as being higher than 30% of families and is
reported to be constantly increasing.
The third stage of the rating survey work plan involved a series of hearings with
all the parties involved and was carried out between 14 November and 22 December
2005, with 52 parties taking part in it. Subjects under discussion were broken down into
two observation areas: the methodological area and the governance area. Within the
scope of the first area, subjects relating to the whole rating system (in the television,
radio, daily and periodical press, and web industries) were discussed from a
methodological viewpoint with respect to surveys’ statistical samples and to the
representativeness of results.
As to the second area involving governance rules, issues relating to the
organisation of rating survey research firms were discussed.
Based on the information gathered during hearings the need arose to guarantee
compliance, in the framework of rating survey activities, with the principles of fairness,
independence and technological neutrality, and to improve the present survey system in
terms of sampling suitability with respect to the population and media involved, also in
the light of the development of new broadcasting technologies. According to what
emerged from the hearings, while being in accordance with a formula largely applied
throughout Europe, the organisational model presently used by rating survey research
firms seems to be excessively affected by parties which hold the biggest market shares
in analog television.
A possible broadening of the company structure was positively considered by
most of the parties heard, which believe this solution would assure the media scene a
stronger representativeness, while reducing cases liable to possible conflicts of interest.
On the other hand, almost all parties showed strong distrust as to forms of current
affairs press organisations and stressed that rating surveys should remain publishers’
and the market’s initiative and be directly funded by them.
The last work plan phase involved enactment of the measure setting forth the
Policy Provision on the media viewing/listening and circulation rating survey”
(Resolution no. 85/06/CSP) and providing for the adoption of precise methodological
criteria for the survey of radio and television ratings and for the printed press reading
ratings, in order to improve the quality of the research carried out. In particular the
resolution lays down guidelines as regards the governance of television and radio
viewing/listening rating survey research firms and the methodological criteria to be
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applied to the television rating survey, while providing that surveys shall take account
of the analogue-to-digital changeover process, without prejudice to AGCOM’s right to
carry out the necessary surveys, should this research not turn out to be in accordance
with the universalistic sampling criteria, with respect either to the population or to the
media involved, under article 1, paragraph 6, letter b, no. 11 of law no. 249/97.
The separate accounting system adopted by the radio and television public
service concessionaires
Article 18, paragraph 1 of law no. 112/04 requires RAI to adopt a separate
accounting system aimed at pricing the cost of the public service provision, in order to
guarantee compliance with transparency and liability principles related to the use of
public funding. Under this provision the radio and television public service
concessionnaire shall draw up the balance of the business year by detailing, in a
separate accounting, revenues deriving from the licence fee and charges incurred for the
provision of the public service.
Items shall be entered according to consistent accounting principles objectively
accounted for, and the analytical accounting principles, according to which separate
accounts are kept, shall be clearly set up. The accounting separation is used to verify
that resources deriving from the licence fee are solely used for the public service
activity and that there are consequently no subsidies in favour of commercial activities.
The separate accounting shall be audited by an auditing firm, to be appointed by
the concessionnaire and chosen by AGCOM among those included in the relevant
register kept at the CONSOB, the Italian investor protection and stock exchange
effectiveness, transparency and development Commission.
Law no. 112/04 lays down purposes and content of the accounting separation
system and delegates the implementation phase to AGCOM, which approves the
accounting separation plan upon discussion with the public service concessionnaire.
With Resolution no. 102/05/CONS of 10 February 2005 AGCOM set out the
accounting principles laid down by lawmakers into precise guidelines which the public
service concessionnaire shall abide by in implementing the accounting separation
system.
As regards separate accounting implementation deadlines, pursuant to the above
resolution the first fiscal year to be considered for accounting auditing purposes was the
one closed on 31 December 2005; in the first implementation stage agreed auditing
procedures were adopted with reference to the year 2004.
In accordance with guidelines laid down by lawmakers and regulated by AGCOM, in
March 2005 RAI finalized a draft accounting separation which was submitted to
AGCOM’s approval.
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The first activity implemented by the concessionnaire in order to draw up
separate profit and loss accounts was the separation of public service activities from
those of a commercial nature. The watershed was the interpretation of the current
regulatory framework, according to which, though, on one hand the concessionnaire’s
global programming activity falls within the scope of the public service mission (under
article 2, paragraph 1, letter h of law no. 112/2004), while on the other hand, within the
whole programming activity, a distinction can be drawn between activities provided for
by the law and by the service contract and those left to the undertaking’s discretionary
power, in compliance with the modal obligations laid down in the reference regulatory
framework. In particular, the public service set includes costs and revenues relating to
activities falling within the specific public service, as provided for by law no. 112/04
and by the service contracts the law makes reference to, plus the imputed charge of the
advertising obligation; the commercial set includes costs and revenues from the
programming activity which does not specifically have a public service nature, the
imputed revenue of the advertising obligation, and costs and revenues from commercial
activities directly carried out by RAI, including the digital commercial programming
activity on the block not reserved for the public service; the technical set includes costs
and revenues relating to instrumental supporting activities, as well as revenues from the
sale of services to RAI’s other sets.
The apportionment of advertising revenues between the public service area and
the commercial area is mainly based on the so-called “cost-contact” principle, which is
used to allocate the advertising turnover according to the commercial value of
programmes it originates from.
AGCOM conducted a comprehensive analysis of the draft accounting separation
and of the technical supplements subsequently submitted by RAI, and considered the
concessionnaire’s proposal to be in compliance with law no. 112/04 and with
Resolution no. 102/05/CONS. AGCOM then approved RAI’s draft accounting
separation with Resolution no. 186/05/CONS of June 2005.
Subsequently, with Resolution no. 393/05/CONS of 13 October 2005, AGCOM
approved RAI’s proposal to entrust Deloitte & Touche s.p.a. with the separate
accounting audit for the 2005-2006 two-year period.
In the first implementation phase, with regard to financial year 2004 the auditing firm
carried out agreed upon procedures as provided for by Resolution no. 102/05/CONS.
During a hearing, in reporting the results of its assessments the auditing firm
pointed out that no errors were identified, neither in the cost and revenue allocation to
the regulatory sets, nor in arithmetic calculations made by RAI. With regard to the
increase in value of non-accounting items represented by values not included in the
accounts kept for civil-law purposes but explicitly required by the regulator, in the
framework of the draft separate accounting the auditor did not find any error either. In
particular, as to the calculation of the advertising minutage requirement, the auditor
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considered the concessionnaire’s methodological assumptions to be reasonable and
consistent with the regulatory obligations, and with regard to the capital pricing the
calculation proved in line with the best accounting practice.
Finally, Resolution no. 186/05/CONS provides for an auditing clause connected
to the first implementation phase of the draft accounting separation. Under this clause,
following the assessment on financial year 2004 and upon discussion with RAI,
AGCOM is entitled to adopt either changes or supplements to the draft approved with
Resolution no. 186/05/CONS. This provision is based on the awareness that, due to the
complexity of the accounting separation system, a cautious approach is considered to be
advisable, according to which the model effectiveness is tested on the 2004 balance
sheet. In the light of this provision AGCOM and the concessionnaire are currently
discussing whether, following the assessment, any changes or supplements should be
adopted with respect to the draft accounting separation to be applied to the 2005 balance
sheet.
Guidelines on the content of additional obligations imposed on the general
radio and television public service
Under article 45, paragraph 4 of the radio and television broadcasting
Consolidation Act, by a joint resolution adopted by the Communications Regulatory
Authority and by the Ministry of Communications, before each three-year renewal of
the service contract guidelines shall be laid down as to the content of additional –
compared to the minimum obligations listed in paragraph 2 of the provision itself –
obligations imposed on the general radio and television public service, based on markets
development, technological advances and changed national and local cultural needs.
The aforementioned provision has an impact on the service contract between the
Ministry and RAI for the 2006-2008 three-year period, to be named “national service
contract” in accordance with the law, and to be supplemented by regional service
contracts, as well as provincial ones for Trento and Bolzano self-governing provinces.
With Resolution no. 55/06/CONS of 1 February 2006 AGCOM set out
additional public service obligations – also on the basis of hints gathered during
hearings held with the major radio and television market players and with consumer
Associations.
In this framework, special attention is be paid to the quality of the radio and
television broadcasting offer, which is a strategic target of the public service mission, to
be pursued within all hour brackets, also in the context of the broadcasting of the most
popular genres of programmes. In particular, besides guaranteeing in all its broadcasts,
also of the non-news type, compliance with the general principles (of objectivity,
completeness, impartiality, pluralism and openness to different political, social, cultural
and religious opinions and trends; of protection of ethnic diversity and of the cultural,
artistic and environmental heritage at a national and local level; of respect of freedoms
166

and rights, and of a person’s dignity, of promotion and protection of welfare, health and
physical, psychic and moral harmonious development of children), RAI shall provide a
wide range of television, radio and multimedia programmes intended for all users, and
consequently take into account different trends, opinions, and tastes. Moreover, some
types of programmes which are definitely of the public-service type, (news, education,
training, cultural promotion, programmes for children) shall be aired to a proportionate
extent in all hour brackets, including peak-time ones, and within all television and radio
programmes, while reference is made to the service contract where each genre is set out
per type.
Pursuant to the law, AGCOM shall then set out in a resolution the number of
hours the concessionnaire is required to devote annually to the broadcasting of the types
of programmes relating to public service obligations, with the exclusion of
entertainment programmes for children, under article 45, paragraph 2, letter b of the
radio and television broadcasting Consolidation Act.
With regard to the protection of children, in compliance with European and
national regulations and with the provisions set forth in the television-and-children selfregulation
Code of Conduct approved on 29 November 2002, RAI shall devote an
annual share of programmes, to be set out in the service contract, to be specifically
intended for entertainment programmes for children and for training and information
programmes for children and teenagers, taking into account the precise criteria set forth
in the television-and-children self-regulation Code of Conduct with regard to
programmes aired within the 4:00-7:00 p.m. hour bracket. It was also confirmed that all
programmes aired within 7:00 a.m. and 10:30 p.m. shall respect children’s dignity, so
avoiding to broadcast programmes that might upset children.
On the other hand, educational and training programmes shall be aimed at
causing scientific and humanities culture to be circulated, at spreading the knowledge of
foreign languages and the I.T., at arts and music training and at teaching, including
long-distance learning. As regards broadcasts intended for people with sensory
disabilities and social broadcasts, it is specifically required that such adequate measures,
to be set out in the service contract, be adopted as to guarantee an increase in volume of
current offers, both in terms of quantity and in terms of types of programme genres, also
with special reference to the requirement to cover issues regarding weak population
segments, with the allocation of adequate space to associations and social movements.
Resolution no. 55/06/CONS provided for the introduction of an offer quality assessment
system in compliance with article 48, paragraph 1 of the Consolidation Act, which
entrusts AGCOM with the task of verifying whether the public service is actually
provided pursuant to the law and to service contracts, while also taking account of
service quality standards and user satisfaction ratings, as set out in the service contract.
This system shall be set up by RAI by assembling a set of indicators based both
on offer quality criteria as set out in the guidelines, and on the understanding of public
167

opinions, to be gathered by questionnaires or by telephone interviews relating to
programmes aired to a representative population sample. The assessment system shall
also be checked by an external panel of experts.
As to special traffic services, regulations governing the Isoradio service were
confirmed, so that this traffic update radio is allowed solely to repeat national networks’
programmes interspersed with traffic news bulletins, instead of airing its own
broadcasts,.
As far as technological advances are concerned, compliance is required with the
obligations imposed on the public concessionaire by Resolution no. 136/05/CONS with
respect to digital terrestrial television, as regards the setting up of infrastructures, the
roll-out of a new generalist TV programme, and the allocation - to independent content
providers - of at least 40% of the broadcasting capacity of broadcasting blocks relating
to digital terrestrial television programmes not intended for the public service.
Provisions also govern the reception of RAI’s simulcast uncoded satellite broadcasts,
for the purpose of boosting the development of digital radio broadcasting, testing new
broadcasting techniques such as DVB-H (Digital Video Broadcasting-Handheld) and
High Definition, and regulating the use of broadcasting blocks in connection with the
digital terrestrial technique.
With regard to the development of markets and competition, in compliance with
European rules on the use of licence fees RAI is required both to use such fees solely to
perform its public service tasks, without upsetting exchange and competition conditions
in the European Union, and to give precise evidence of such use by drawing up its
financial year balance according to separate accounting, pursuant to AGCOM’s policy
resolutions.
RAI shall also adopt such technical and economical management criteria as will
allow the concessionnaire to achieve production and allocation effectiveness goals, also
through a rationalisation of its organisation.
Lastly, special provisions regulate AGCOM’s action aimed at checking (article
48 of the radio and television Consolidation Act) that public service tasks are
accomplished pursuant to European policies on the implementation of rules on State
subsidies, according to which the public service mission shall be entrusted in a clear and
detailed fashion by law rules or regulations and the verification shall be carried out by
an independent Authority.
To that end RAI is required to submit, on a six-month basis, a report containing
detailed information on programmes aired and tasks accomplished in compliance with
public service obligations.
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Provisions relating to dominant positions or to positions
detrimental to pluralism
In March 2005, with Resolution no. 136/05/CONS 1 AGCOM adopted a set of
measures aimed at promoting the competitive development of the television market and
of its relevant sources of funding. This decision stemmed from a preliminary
investigation carried out in accordance with competition protection principles, pursuant
to the provisions laid down in law no. 112/04.
In particular, AGCOM’s assessment highlighted a concentration of resources
within RAI and RTI-Publitalia groups, in terms of technical (infrastructure) and
economic (advertising) resources, such concentration being linked in any case to very
high audience shares. The level of concentration turned out to be so high that a
symmetric duopoly in the television market was identified and considered as the
maintaining of a position detrimental to pluralism under articles 3 and 5 of law no.
112/04 and under article no. 2, paragraph 7 of law no. 249/97.
Therefore, still with Resolution no. 136/05/CONS measures were adopted
aiming at protecting information pluralism in the television sector, with special
reference to external pluralism, as set out in the constitutional case law.
Provisions laid down in Resolution no. 136/05/CONS and their implementation
conditions aim at avoiding that the concentration of resources typical of the analog
system be conveyed to the digital terrestrial television system, with risks of competition
being narrowed down in the medium-to-long term. However, all of them are going to
affect an expanding market, whose medium-term dynamics are difficult to forecast.
With this in mind, AGCOM considered the possibility to revise such measures -
in the light of the evolution of the competition framework - in twelve month’s time
since the adoption of the provision and, in any case, following the outcome of the
verification of the shares of the communications integrated system.
In detail, the measures adopted by AGCOM were aimed at limiting the concentration of
economic and technical resources and involved in particular:
• with respect to RAI and RTI:
- the obligation to speed up the digitalization of terrestrial television
networks also by switching to the digital technique all analog equipment;
1 Both RAI and Mediaset, to whom the provision was addressed, lodged an appeal with the Lazio TAR
(Regional Administrative Court) to pledge the quashing of Resolution no. 136/05/CONS. While the
judgement is currently pending, the Court did not uphold the suspension petition, so that Resolution no.
136/05/CONS maintains full effectiveness.
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- the obligation to allocate to independent content providers a share within
40% of the broadcasting capacity of digital terrestrial networks, as set
out in article 2 b, paragraph 1, fifth sentence, of law no. 66/01;
• with respect to RTI:
- the obligation to use, according to the schedule set out in Resolution no.
136/05/CONS, an advertising licensee different from Publitalia for
advertising investments relating to digital terrestrial broadcasts different
from simulcast;
- the prohibition to broadcast advertisements in the context of digital
terrestrial television broadcasts different from simulcast to an extent
above 12% of each hour from 30 June 2005 to 31 December 2006;
• with respect to RAI:
- the obligation to help spread the digital terrestrial technology by means
of a new generalist programme, to be audience-appealing and
advertisement-free on digital terrestrial networks;
• with respect to Publitalia:
- the obligation to apply (until the provision is implemented which
requires RTI to use an advertising licensee different from Publitalia for
advertising investments relating to digital terrestrial broadcasts different
from simulcast) the accounting separation between advertising
investments relating to analog networks and those relating to digital
terrestrial networks;
- the obligation to apply transparent, fair and non-discriminatory terms to
the sale of advertising space, and to highlight separately any discounts
allowed on individual products.
In particular, as far as network access is concerned, AGCOM considered that, in
order to affect the development of pluralism, it would be useful to set out a share of
broadcasting capacity to be transferred to independent content providers whose
programme schedule is suitable to diversify the allocation of advertising resources,
especially if such broadcasters are particularly appealing in terms of audience.
To that end, AGCOM decided to extend in time the applicability of the provision
set forth in article 2 b of law no. 66/01, according to which “any undertaking which
holds more than one television licence shall devote, in each block of digitally
broadcasted programmes and services, equal opportunities and in any case at least 40%
of the broadcasting capacity of said block of programmes and services, under fair,
transparent and non-discriminatory terms, for the testing by other parties which shall not
be parent, subsidiary or affiliated companies”.
Such reservation obligation, to be valid, pursuant to the law, in the framework of
the testing phase involving digital terrestrial television broadcasting, was extended, with
respect to RAI and RTI, by Resolution no.136/05/CONS until full implementation of
the national digital frequency allocation plan.
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In order to make the above-mentioned provision an effective one, with
Resolution no. 264/05/CONS 2 AGCOM set out the minimum qualifications required in
order to identify independent content providers for which both RAI and RTI shall
reserve a share of their broadcasting capacity.
In the first place, this resolution identified independent content providers in terms of
owners’ structure, by defining them as broadcasters of programme schedules intended
for digital terrestrial television in a national context, which shall not have a control or
subsidiary relationship with RAI and/or RTI, nor shall they be directly or indirectly
related to these undertakings. In terms of content, undertakings being reserved a share
of broadcasting capacity shall fashion their programme schedule on pluralism and
objectivity principles and offer such widespread genres as to meet the tastes of different
viewers’ categories.
Content providers offer appealing programmes in terms of audience and advertising
investment capacity; such a programme schedule shall then be oriented to the following
genres:
• quality entertainment programmes, valued sporting, social, cultural, and musical
events;
• popular programmes of general interest, refresher programmes and programmes
where in-depth analyses are carried out on scientific, cultural, historic, and
musical subjects;
• fictional programmes, TV films, serials, mini-serials and feature films;
programmes for children and teenagers.
From the point of view of pricing terms RAI and RTI shall offer their broadcasting
capacity on fair, transparent and non-discriminatory terms. To that end, they shall
guarantee fair information to the potential interested parties, as well as equal treatment
with regard to the technical and pricing terms of offer of the broadcasting capacity.
However, it should be pointed out that, to date, these actions have not yet resulted in
the access to broadcasting networks by content providers identified by Resolution no.
264/05/CONS, and the analysis of the regulatory impact has then highlighted a defect of
effectiveness in the adopted measures. AGCOM took account of this consideration in
the framework of the “policy provision” (policy provision) approved with Resolution
no. 163/06/CONS.
This decision (see below) involves an action plan aimed at promoting a functional
and pluralist use of frequencies intended for radio and television services, in view of the
changeover to the digital technique. In particular, to complete the action undertaken
2 Among the grounds added to the appeal lodged against Resolution no. 136/05/CONS, RAI also
requested the quashing of Resolution no. 264/05/CONS. The judgement is currently pending.
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with Resolution no. 136/05/CONS, the “policy provision” provides for the need to
“identify such mechanisms as can make the 40% transfer of broadcasting capacity to
independent undertakings an effective and substantial one, as regards transparency of
imposed terms and the selection of the contracting parties, in order to strengthen
pluralism and competition”.
To that end, a measure might be adopted to further set out the obligation to
reserve some broadcasting capacity for independent content providers, within the 40%
share of broadcasting capacity of digital terrestrial networks. In particular, AGCOM
explained its intention to set out and handle a competitive procedure for a minimum
channel line-up to be guaranteed all over the country.
The “policy provision” also outlines the content of adoptable measures, and
identifies transparency, equal treatment and cost-orientation of the terms and conditions
of offer as proportional obligations to that end. Such terms will be adequately
advertised, as they shall be disclosed to the market through a reference offer. In the
framework of this range of guarantees, AGCOM shall also verify that undertakings
adopt a cost accounting system in line with regulatory obligations. For these strategic
objectives to be implemented, the “policy provision” provides for the possibility,
among other things, to activate the measure revision clause pursuant to Resolution no.
136/05/CONS.
Network access guarantees were then the underlying theme of the action carried
out by AGCOM over the past year in order to protect competition and pluralism. This
market’s competitive value was also confirmed by the latest assessments. In this
connection, suffice it to mention the analysis of the market for radio and television
broadcasting services for the broadcasting of content to end users (the so-called “market
no. 18”), in whose context – pending proceedings - AGCOM identified a collective
dominance position involving RAI and RTI, with regard to the national market for
analog television broadcasting services on terrestrial networks (see par. 2.1.).
Licensees’ programming obligations
In the framework of the sanctioning action carried out by AGCOM following
complaints, mention is briefly made of the following four categories of relevant
programming obligations:
1. programme register keeping;
2. programme recording keeping;
3. interconnection;
4. programming duration.
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In this context, AGCOM issued 7 order-injunction measures in the reference period,
following the failure to comply with invitations to perform. 5 orders-injunctions were
related to the correct keeping of the register of broadcasted programmes and
respectively concerned the following broadcasters: “Radio Onda Blu” (Resolution no.
85/05/CSP), on which a € 1,032.00 fine was inflicted; “Videoesse” (Resolution no.
135/05/CSP), on which a € 516.00 fine was inflicted; “Radio Jolly” (Resolution no.
2/06/CSP), which was inflicted a € 1,032.00 fine; “TV Oggi” (Resolution no.
3/06/CSP), which was inflicted a € 516.00 fine; “Radio Gela” (Resolution no.
39/06/CSP), which was inflicted a € 2,064.00 fine. One order-injunction concerned
interconnection, while another concerned the programming duration. The former
affected “Radio Enterprise” (Resolution no. 148/05/CSP), on which AGCOM inflicted a
€ 3,096.00 fine, while the latter affected “Radio Stella” (Resolution no. 149/05/CSP), on
which a € 3,096.00 fine was inflicted.
AGCOM dismissed 29 cases relating to register-keeping and recording keeping, 9 of
which had been preceded by invitations to perform, while 5 cases were dismissed
because deadlines had elapsed due to the lack of Collegiate Bodies following the end of
the first term of office of AGCOM’s bodies. Moreover, 8 invitations to perform were
issued under article 31, paragraph 1 of law no. 223 of 6 August 1990, and just one case
was dismissed through administrative channels. Finally, AGCOM initiated 7
proceedings and notified a charge relating to the breach of paragraphs 4 and 5 of article
20 of law no. 223 of 6 August 1990, with regard to the obligations to keep a programme
register and programmes recordings.
Dispute settlement involving the single satellite platform
AGCOM carries out the settlement action with regard to disputes arising from
the implementation of commitments attached to decision M. 2876 of 2 April 2003, by
which the European Commission authorized the Stream-Telepiù merger Sky Italia
originated from.
In particular, in the May 2005-April 2006 period 6 disputes between operators
were dealt with: in 3 cases the procedure ended with a settlement attempt, while in 3
other cases the dispute was settled.
Four disputes concerned access to the satellite platform, in whose respect
paragraph 11 of the above-mentioned commitments lays down specific obligations for
Sky Italia for the purpose of assuring the provision of technical services required by
competitors for them to be able to deliver their commercial offer to end users.
Two cases concerned Sky Italia’s obligation, pursuant to paragraph 10 of the
commitments, to submit a wholesale offer of packages and premium channels delivered
to their subscribers.
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Table 2.13. Parties, subject-matter and proceedings stage of disputes involving the single satellite
platform
Parties to the dispute Subject of the case Proceedings stage
CLASS FINANCIAL NET- Access to the platform Dispute settlement
WORK/ SKY ITALIA
GIOCO CALCIO/ SKY ITALIA Access to the platform Dispute settlement
TISCALI/ SKY ITALIA Wholesale premium offer Settlement attempt
DIGITAL WORLD TELEVISION/ SKY Access to the platform Settlement attempt
ITALIA
TELECOM ITALIA/ SKY ITALIA Wholesale premium offer Settlement attempt
EDI ON WEB/ SKY ITALIA Access to the platform Dispute settlement
Source: data processed by AGCOM
In particular, the following specific issues were the subject of disputes concerning
access to the satellite platform:
a) the position in the platform channel line-up (Class Financial Network/Sky Italia
case)
b) the cost calculation and allocation method applied by Sky Italia for the provision
of technical services (Gioco Calcio/Sky Italia case);
c) the cost of technical access services (Digital World Television/Sky Italia case);
d) the simulcrypt agreement (Edi On Web/Sky Italia case).
In the first two cases AGCOM settled the dispute by issuing a nonsuit resolution as,
following the negative outcome of the settlement attempt and the start of the final
settlement phase, the parties came to a settlement agreement, so removing the matter
under dispute.
In the Digital World Television case the settlement attempt ended with a report of
failed agreement between the parties, without a subsequent settlement petition being
lodged.
In the case filed by Edi On Web, relating to the simulcrypt agreement mode by
which Sky Italia is bound under paragraph 11.8. of the commitments, AGCOM settled
the dispute by a binding agreement (Resolution no. 126/06/CONS).
In the Edi On Web case this undertaking, which broadcasts the “Conto Tv” television
channel by a conditional access system (CAS) different from that used by Sky Italia,
requested that a simulcrypt agreement be imposed in order to cause both CAS systems
to be interoperable, for Edi On Web to be able to offer their own services to Sky Italia
users, while allowing Sky Italia’s offer to be accessible also by Edi On Web users
which do not own the single platform set top box.
AGCOM settled the dispute by deciding that, in this specific case, such an
agreement is in compliance with the reasonableness and fairness criteria pursuant to the
EU decision, as it ensures Edi On Web to be able to sell their services to Sky Italia
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subscribers without necessarily imposing on Sky Italia to make their commercial offer
accessible on an alternative technical platform. At the same time, pursuant to the
resolution, Sky Italia shall not apply to the simulcrypt agreement any contractual and
pricing terms outside its subject-matter, and shall offer access services on fair,
transparent, non-discriminatory and cost-oriented terms.
With regard to disputes involving the implementation of obligations regarding
the wholesale premium offer, in both cases, in addition to pricing terms and calculation
methods - in whose respect proceedings resulted in the settlement of the Ebismedia/Sky
Italia case (Resolution no. 360/04/CONS) - the subject-matter included the setting out
of some contractual terms (Telecom Italia/Sky Italia) and technical inspections on the
ADSL broadcasting platform (Tiscali/Sky Italia).
Both cases ended with a settlement, and in particular in the Telecom Italia/Sky
Italia dispute the parties came to a commercial agreement.
As to the settlement of disputes involving users of the satellite platform, proceedings
that were initiated did not result in a binding agreement as the operator spontaneously
met consumers’ requests and needs.
Other types of violations in the audiovisual sector
The sanctioning action carried out by AGCOM in the reference period with regard
to the breach of audiovisual regulations led to the issuance of 15 measures regarding the
following:
• the failure to submit, according to prescribed deadlines and methods, data and
information requested by AGCOM during preliminary investigations regarding
surveys (article 1, paragraph 30, law no. 249/97, and article 3, Resolution no.
153/02/CSP of 25 July 2002); in detail this concerned 5 cased dismissed
following a cash settlement of € 1,032.00;
• the failure to submit, according to prescribed deadlines and methods, data and
information requested by AGCOM during preliminary investigations regarding
the organization and keeping of the Register of communications operators, as
notices concerning the transfer of stocks of holding shares of Partecipazioni
Industriali s.p.a., in a case, and of RCS MediaGroup s.p.a. in seven cases, had
not been received within the prescribed deadlines (article 1, paragraph 30, law
no. 249/97, and article 22, Resolution no 236/01/CONS); in particular, AGCOM
adopted 8 dismissal measures following a cash settlement of € 1,032.00;
• the failure to submit, according to prescribed deadlines and methods, data and
information requested by AGCOM during preliminary investigations relating to
provisions laid down in article 6, paragraphs 1 and 2 of Resolution no.
127/00/CONS, as amended by Resolution no. 289/01/CONS, with respect to the
failure to submit the receipt certifying payment of the fee supplement due for the
investigation related to the authorization to broadcast the programme called
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“Napoli Network”, such authorization having been issued with Resolution no.
125/02/CONS of 17 April 2002 (article 1, paragraph 30, law no. 249/97); 1
order-injunction was issued imposing payment of a € 1,500.00 fine;
• non compliance with AGCOM’s orders and invitations to perform (article 1,
paragraph 31, law no. 249/97). In particular, a sanctioning measure was adopted
(Resolution no. 450/05/CONS) against the “Ennio Valeri” Foundation, owner of
“Videoesse”, a local TV broadcaster on which a € 10,329.00 fine was inflicted.
Lastly, one case is currently pending with regard to the failure to submit,
according to prescribed deadlines and methods, data and information requested by
AGCOM in connection with the obligations to register in the Register of
communications operators (article 1, paragraph 30, law no. 249/97).
Programming obligations concerning European works and independent
producers’ works
Since last year the regulatory framework concerning programming obligations
has undergone relevant changes. Article 2 of law no. 122 of 30 April 1998, as
recently amended by law no. 112 of 3 May 2004, was repealed once and for all by
the radio and television broadcasting Consolidation Act which sets forth
programming obligations in articles 6 and 44.
In particular, while article 44 substantially rebuilds the framework of obligations
already laid down in article 2 of law no. 122/98, article 6 is of special relevance as,
besides pointing out that national broadcasters and television content providers help
develop and spread the European audiovisual production also pursuant to article 44
(with regard to independent producers), it also provides that said broadcasters and
providers shall devote to European works, regardless of the broadcasting coding,
most of their broadcasting time, with the exclusion of the time intended for sports
events, TV games, newscasts, advertisements, or for teletext services, TV forums
and teleshopping.
The innovative impact of article 6, compared to previous regulations, is of
special significance especially because of the direct reference made to television
content providers; it can then easily be asserted that the obligation to allocate 10%
of the broadcasting time to independent producers’ works is extended also to
operators with just “a programming responsibility in the assembly of television or
radio programmes and the relevant data-programmes intended for the broadcasting -
also by conditional access - on digital terrestrial frequencies, by cable or satellite
broadcasting or by any other medium of electronic communication [...]”. The
principle introduced by article 2 of law no. 122/98, according to which such
obligation was applicable only with respect to holders of a licence for the analog
broadcasting at a national level, has then been exceeded.
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In this connection it should be highlighted that the extension of the reserve
obligation in favour of independent producers’ works to all broadcasters had
specifically been requested by the European Commission for the purpose of
bringing the Italian legislative framework in line with the “Television without
frontiers” European directive. As a matter of fact, European regulations do not make
the (all-Italian) distinction between holders of a licence issued in Italy by the
Ministry of Communications (to broadcasters which use analog terrrestrial
frequencies) and holders of an authorization, issued either by the same Ministry (to
broadcasters broadcasting on cable or digital terrestrial frequencies) or by the
Communications Regulatory Authority (to broadcasters which use satellite
frequencies), and apply the same obligations to all national broadcasters.
Compared to law no. 122/98, another innovation introduced by article 6 of the
Consolidation Act is the adoption of the provision by which AGCOM laid down the
instrument of derogation with regard to thematic channels, namely article 5 3 of the
regulations passed with Resolution no. 9 of 16 March 2006. The reference made by
article 6 of the Consolidation Act to article 5 of said regulations dispels all doubts as
to said resolution still being in force.
As far as AGCOM’s supervisory and monitoring action is concerned with regard
to compliance with programming obligations it should be highlighted that, in
compliance with the provision under articles 4 and 5 of the “Television without
frontiers” Directive, AGCOM submitted to the European Commission its scheduled
biennial report and attached tables showing percentages of European works,
independent producers’ work and recent works broadcasted by Italian broadcasters
in the years 2003 and 2004.
The following tables are also on display together with the report published on
the European Commission web site. It should also be pointed out that, as data
included in the tables mainly derive from the IES, the “Informativa Economica di
Sistema” (the Media and Communications Industry Database), those relating to
compliance with 2005 programming obligations will be available as soon as
broadcasters submit their IES for the year 2006.
For data to be correctly understood it should be pointed out that, as the
Consolidation Act was adopted in Italy in July 2005, in the 2003-2004 two-year
period non-licensee broadcasters were still exempt from the obligation to schedule
independent producers’ works, so that wherever a percentage was not available the
relevant cell reads “Exempt”.
Lastly, it should be pointed out that the Consolidation Act confirmed the original
provisions set out in law no. 122/98, consequently requiring broadcasters and
3 Article 5 of Resolution 9/99 states: “Each individual thematic channel can apply to AGCOM and duly
set forth their reasons for a total or partial derogation to the investment and broadcasting reserve
obligations as set out in these regulations”.
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television content providers to allocate to recent works (i.e. works produced in the
last 5 years) at least 50% of their total broadcasting time reserved to all European
works. This provision is actually different from the one set forth in the “TV without
frontiers” Directive, according to which 50% of independent producers’ works have
to be produced in the last 5 years. In other words, Italian law-makers extended the
obligation to programme 50% of recent works to the broadcasting time devoted to
all European works, instead of limiting it just to independent productions, as
provided for by the “TV without frontiers” Directive.
In the light of the above considerations it should be kept in mind that the
percentage of recent works shown in the relevant column of the following tables
refers to European works, rather than to independent producers’ works.
Table 2.14. shows percentages of broadcasting time reserved to European works,
independent producers’ works and recent works with respect to the 2003-2004 twoyear
period and to broadcasters and different types of channels.
Table 2.14. TV Broadcasters, types of channels, and broadcasting time reserved to European
works, independent producers’ works and recent works
Broadcaster European Indep. prod. Recent
or group of Channel Type works works works
broadcasters 2003 2004 2003 2004 2003 2004
RAI Rai Uno terr. 78.1 77.2 20.9 26.3 77.8 69.29
..................................................................................................................................................................
TOTAL 79.0 79.8 25.9 25.9 70.0 70.59
RTI
RTI Canale 5 terr. 61.8 73.1 15.9 17.3 91.0 91.4
..........................................................................................................................................................................
..........................................................................................................................................................................
TOTAL 60.0 59.5 70.4 74.1
RMTV + LA7
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LA7 TELEVISIONI s.p.a. La7 terr. 55.2 49.9 19.6 16.5 78.2 75.8
.........................................................................................................................................................................
TOTAL 64.2 73.3 91.2 95.1
SKY ITALIA (ex-Stream)
SKY ITALIA s.r.l. Sky On Air sat. no 100.0 no exc. no 100.0
........................................................................................................................................................................
TOTAL 48.4 47.5 97.3 96.9
MULTITHEMATIQUE
CANALI DIGITALI Placet sat. 74.8 73.03 exc. exc. 76.3 83.6
TOTAL 58.1 56.6 46.2 78.1
EUROCAST
EUROCAST ITALIA Polonia 1 sat. 48.7 100.0 exc. exc. 26.2 37.5
EUROCAST ITALIA Tele 5 sat. 74.1 100.0 exc. exc. 34.8 39.1
EUROCAST ITALIA Top Shop sat. exc. exc. exc. exc. exc. exc.
TOTAL 59.3 100.0 0.0 38.2
EUROPA Europa Tv -
TELE+
TOTAL 48.5 no 94.0 no
FOX
FOX INTERNATIONAL
CHANNELS ITALY s.r.l. Fox sat. 22.9 20.0 exc. exc 100.0 99.1
TOTAL 41.5 45.2 92.8 92.9
RETE BLU
RETE BLU Telelazio Rete Blu sat. 0.0 0.0 exc. exc. 0.0 0.0
RETE BLU Sat 2000 sat. 51.8 51.9 33.2 32.7 54.0 53.1
TOTAL 21.0 21.7 54.0 53.1
GRUPPO SITCOM
ALICE Alice sat. 100.0 99.0 exc. exc 100.0 100.0
NUOVA FRANCIA Rtb
TOTAL 100.0 97.8 100.0 100.0
NUOVA FRANCIACORTA
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CORTA International sat. 85.1 88.3 29.3 31.7 65.6 62.6
NUOVA FRANCIA Retebrescia
CORTA sat. 92.0 89.1 33.1 38.5 64.0 56.8
TOTAL 88.8 88.7 64.7 59.7
TELESTUDIO MODENA
TELESTUDIO
MODENA s.r.l. Studioeuropa sat. 100.0 100.0 100.0 exc. 100.0 100.0
TELESTUDIO Telestudio
MODENA s.r.l. Modena sat. 100.0 100.0 exc. exc. 100.0 100.0
TOTAL 100.0 100.0 100.0 100.0
RADIO ITALIA
RADIO ITALIA s.p.a. Video Italia
Solo Musica
Italiana sat. 100.0 100.0 exc exc.
RADIO ITALIA s.p.a. Playlist
0.0 0.0
Italia sat. no 100.0 no exc. no 0.0
TOTAL 100.0 100.0 0.0 0.0
OTHERS
ELEFANTE TV s.p.a. Elefante Tv terr. exc. exc. exc. exc exc. exc.
In the reference period, in the framework of inspections conducted on television
broadcasters with regard to the 2001-2002 two-year period for violations to regulations
on broadcasting shares relating to European works scheduled by national (terrestrial and
satellite) broadcasters, AGCOM initiated 10 proceedings aimed at sanctioning the noncompliance
with the above-mentioned programming and investment obligations (article
2 of law no. 122/98 and Resolution no. 9/99).
In particular, 3 sanctioning measures were adopted, one against Europa Tv s.p.a.
(Resolution no. 299/05/CONS), which was imposed payment of a € 35,000.00 fine,
another against Omega Tv s.p.a. (Resolution no. 300/05/CONS), which had to pay a €
25,000.00 fine, while the third one involved Prima Tv s.p.a. (Resolution no.
301/05/CONS), on which a € 25,000.00 fine was inflicted.
Four out of ten proceedings were dismissed, one because deadlines had elapsed
due to the lack of Collegiate Bodies following the end of the first term of office of
AGCOM’s bodies, while in three cases a cash settlement was obtained by payment of €
20,660.00 by each operator.
Satellite authorisations
The work related to the issuance of satellite television authorisations is carried
out by AGCOM pursuant to regulations passed with Resolution no. 127/00/CONS of 1
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March 2000, which regulates the issuance of authorisations to undertakings which
operate the satellite broadcasting of television programmes in one of the States
signatory to the European Convention on transfrontier television agreed upon in
Strasbourg on 5 May 1989 and ratified with law no. 327 of 5 October 1991.
The following table shows data relating to tasks carried out by AGCOM in
connection with the issuance of authorisations in the May 2005-April 2006 period. Each
broadcasted programme was matched by a specific authorisation application.
Table 2.15. Tasks carried out in connection with the issuance of satellite authorisations
Authorisation applications (from 1 May 2005 to 30 April 2006) 51
Authorisations issued (from 1 May 2005 to 30 April 2006) 42
Total number of programmes authorised from 13 April 2000 to 30 April 2006 228
Total number of undertakings authorised from 13 April 2000 to 30 April 2006 116
Over the reference period AGCOM has also continued managing the archives
where issued authorisations are collected, while initiating and processing many change
notices concerning changes in the structure of broadcasting companies, in trade names
and broadcasting systems used.
2.7 ADVERTISING
AGCOM’s remit as regards advertising is provided for by law no. 249 of 31 July
1997, in terms of regulatory and supervisory power. In particular, pursuant to said law
(article 1, paragraph 6, letter b, number 3), AGCOM shall supervise the methods used to
supply services and products, including advertising conveyed in all forms, and - with
regard to advertising in all forms and teleshopping (article 1, paragraph 6, letter b,
number 5) – it shall both enact regulations transposing law provisions, and regulate the
organised interaction between product or service providers, or network managers, and
users, so to cause information to users to be acquired, and information on users to be
used.
In this framework, by television monitoring AGCOM carries out its supervisory
action on advertising aired by television broadcasters, while exerting its sanctioning
power.
As far as violations are concerned, in 2005 regulatory amendments were made
which involved changes in surveys and/or introduced new types of violations.
Regulations on radio and television advertising and teleshopping, as set out in
AGCOM’s Resolution no. 538/01/CSP, were amended by introducing regulations
covering both the broadcasting of teleshopping involving services such as astrology,
cartomancy, lotteries, etc., and their relevant advertising (Resolution no. 34/05/CSP,
published in the Official Journal of the Italian Republic no. 72 of 29 March 2005),
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though due to an appeal lodged with the Administrative Court, the effect of these
particular provisions has currently been suspended (see par. 2.12.).
The method of insertion of single advertisements within football games, as
previously regulated by article 4, paragraph 5 of aforementioned Resolution
538/01/CSP, was also modified so that a maximum number of six single advertisements
may now be aired within both halves a game is composed of (Resolution no.
105/05/CSP, published in the Official Journal of the Italian Republic no. 196 of 24
August and in the Official Journal no. 202 of 31 August 2005, amending Resolution no.
538/01/CSP).
Law no. 37 of 6 February 2006, published in the Official Journal no. 38 of 15
February 2006, introduced some changes to the Consolidation Act as regards
advertising, thereby repealing the sanction for the use of children under 14 in
advertising, and regulating broadcasting methods relating to advertisements of alcoholic
drinks (see par. 1.2.6.).
Advertising aspects which fall within the scope of AGCOM’s supervisory action can be
summarized as follows:
• calculation of televised advertising minutage;
• placement of televised advertising events;
• guaranteeing users as to the advertising content;
• public bodies’ investments in advertising.
Both quantitative (i.e. regarding minutage) and qualitative controls are then carried
out by this Authority as regards the content of some advertisements.
Television and radio advertising
The supervisory action with respect to advertisements aired by television
broadcasters is carried out by inspecting the programming of:
• national radio and television licensees:
- through a systematic monitoring of the entire programming schedule
aired by broadcasters, by recording programmes and subsequently
analysing and classifying the various advertising events transmitted
during each televised day;
• local radio and television broadcasters:
- As it is not possible to carry out a systematic monitoring due to the very
high number of local broadcasters, which would involve huge costs and
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technical restrictions for the need to receive and collect all signals aired
by multiple survey stations, either a sampling monitoring or surveys
following notifications by private residents, associations, broadcasters,
etc. are carried out;
• Satellite broadcasters:
- With the same approach followed for local broadcasters, a sample
monitoring is carried out in this case too, mostly owing to technical
restrictions (presence of a wide and different range of receiving
equipment, such as antennas and receivers with different coding).
The following table shows the progress of supervisory and sanctioning actions
concerning television advertising, in the light of the current classification of
infringements following amendments introduced by the regulations revised over the
past year, with reference to complaints submitted between May 2005 and April 2006.
Table 2.16. Progress of supervisory and sanctioning actions relating to television advertising aired
by national television broadcasters
Infringement No. of inspections Measures Measure no.and
classification carried out adopted Broadcaster amount of the sanction
Italia 1 Notif./01/06/DICAM
1. Minutage 19 3 notifications Rete 4 Notif./02/06/DICAM
Canale 5 Notif./03/06/DICAM
Rai 1 Res. 08/06/CSP
3 invitations to perform Rete 4 Res. 09/06/CSP
2. Breaks in sports games 21 Rai 2 Res. 10/06/CSP
in order to broadcast single ads Sportitalia Res. 11/06/CSP
La 7 Res. 44/06/CSP
5 cases dismissed Rai 3 Res. 45/06/CSP
Canale 5 Res. 59/06/CSP
Italia 1 Res. 60/06/CSP
Res. 67/06/CSP
Rete 4 (€ 15,000.00)
2 injunctions Italia 1 Res. 68/06/CSP
3. Breaks in musical, drama 9 (€ 35,000.00)
and audiovisual works 1 invitation to perform La 7 Res. 89/05/CSP
1 invitation to perform Sportitalia Res. 163/05/CSP
4. Intervals between 9
consecutive advertising breaks La 7 Notif. /79/05/DGC
2 notifications Canale 5 Notif. /44/05/DGC
2 invitations to perform Sportitalia Res. 125/05/CSP
5. Breaks in programmes 7 Italia 1 Res. 57/06/CSP
lasting less than 30 minutes 1 case dismissed Rai 2 Res. 43/06/CSP
6. Cartoon characters used in ads Italia 1 Res. 46/06/CSP
aired either before or after 2 2 cases dismissed Rai 2 Res. 47/06/CSP
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the cartoon programme
7. The host of a programme
presenting a teleshopping
window in the same setting
as the programme
- -
Rai 2
Res. 5/06/CSP
(€ 15,000.00)
2 injunctions Rai 1 Res. 6/06/CSP
8. Recognizability of 5 (€ 25,000.00)
advertisements as such 1 case dismissed Italia 1 Res. 4/06/CSP
1 notification Canale 5 Notif./78/05/DGC
9. Advertisements of 3 -
alcoholic drinks
Total 75 26
In the reference period 4 proceedings concerning local radio and television
broadcasters were concluded, respectively with the following measures: an orderinjunction
imposing payment of a € 3,096.00 fine on “Radio Onda Blu” (Resolution no.
84/05/CSP); one case concerning minutage being dismissed because deadlines had
elapsed due to the lack of Collegiate Bodies following the end of the first term of office
of AGCOM’s bodies; and two cases being dismissed, which were related to non-marked
advertisements.
A case gave rise to the issuance of an invitation to perform regarding minutage,
and is currently pending. Lastly, 3 cases were dismissed through administrative
channels.
Advertising concerning public bodies
Following the failure by some Italian Provinces to submit, according to
deadlines and methods as required by AGCOM, statements setting forth advertising
expenditures relating to 2004 (article 41 of the Consolidation Act, totally reproducing
article 7, paragraph 12, of law no. 112 of 3 May 2004, setting out the failure to notify
the amounts spent for the purchase of space on mass media for institutional advertising
purposes), 44 sanctioning proceedings were initiated in the reference year. In 18 cases
Provinces had recourse to their right to a reduced payment (i.e. a cash settlement) under
article 18 of law no. 689 of 24 November 1981, consequently paying € 1,733.00, a sum
equal to one third of the maximum fine prescribed for the violation committed. These
provinces are: Ancona, Ascoli Piceno, Bergamo, Chieti, Ferrara, l’Aquila, Latina,
Mantua, Novara, Oristano, Pescara, Potenza, Ragusa, Siena, Siracusa, Turin,
Alessandria and Vercelli.
Six proceedings involving Biella, Como, Enna, Modena, Piacenza and Vibo
Valentia Provinces were closed by dismissing the case.
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Misleading advertising
Under article 7, paragraph 5 of legislative decree no. 74 of 25 January 1992, as
amended by legislative decree no. 67 of 25 February 200, and as entirely replaced by
article 26, paragraph 5 of legislative decree no. 206 of 6 September 2005 setting forth
the “Code of consumption”, when an advertisement was or is going to be published in
the periodical or daily press or aired on the radio or television or by any other media,
before holding an advertisement to be misleading or a comparative advertisement to be
illegal, the Italian Antitrust Authority shall request a mandatory, though non-binding,
opinion to the Communications Regulatory Authority, which shall issue it no later than
thirty days since the date the request was received.
In the reference period AGCOM issued 185 opinions, 87 of which were related
to advertisements published in the periodical and daily press, 39 involved
advertisements aired on radio and television, and 86 involved advertisements conveyed
by other media. 21 advertisements which were the object of opinions had been
conveyed by several media, while an increasing number of complaints was reported in
connection with advertisements circulated on the Internet (77 complaints), in line with
this medium being increasingly used by an even larger number of consumers of
different social and cultural backgrounds. As a consequence, a distinction was drawn
with respect to the alleged reference target of advertisements reported, according to the
type of web site and their relevant access by search engines.
Two opinions relating to non-marked advertisements aired on television were
the starting point to initiate two sanctioning proceedings against broadcasters (Italia 1
and Canale 5) for breach of provisions set forth in the Consolidation Act and in the
regulations on radio and television advertising and teleshopping.
2.8. POLLS
AGCOM’s supervisory action with regard to polls involves, in the first place,
analysing methods by which polls are disclosed to the public, and verifying that, when a
poll outcome is made public, a fact sheet containing all information on survey
populations and methods is also published/aired by the mass media involved.
Inspections are also aimed at ascertaining compliance with the obligation both to
make the full “survey report” available, with regard to polls published or aired to the
public, and to set forth exactly the methods adopted to carry out the poll, the
significance and limitations of the outcome obtained, and any facts that might be useful
for the additional analysis to be carried out by AGCOM on the actual consistency of
such methods with those stated by the firm that carried out the poll.
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As regards compliance with information obligations with respect to polls, it
should be highlighted that over the last twelve months survey research firms and mass
media have almost always abided by law provisions.
In the few cases of lacking or incomplete fact sheet or failure to publish/air the survey
report, upon invitation by AGCOM, firms and undertakings always filled the
information gap within the prescribed deadlines by spontaneous compliance.
Greatly demanding was the supervisory action carried out by AGCOM as
regards compliance with provisions regulating public-opinion polls on the outcome of
elections and on political trends with regard to recent general elections.
Article 8, paragraph 1 of law no. 28 of 22 February 2000, setting forth “provisions for
equal access to mass media during electoral and referenda campaigns and for political
broadcasting”, prescribes the prohibition to publish and air the outcome of political
polls during the 15-day period before the election date, and entrusts AGCOM with the
task of setting out mandatory criteria according to which this type of polls shall be
carried out.
In the period between the date on which electoral meetings are called and fifteen
days before the vote the publication/airing of polls is regulated by special resolutions
adopted by AGCOM as regards equal access to the media and included in the
implementing measures which make out the set of rules covering political broadcasting
and equal access to the media.
In requesting compliance with rules regulating the publication/airing of electoral
polls in electoral periods, AGCOM set out some important interpreting clarifications.
AGCOM called attention on the provision requiring electoral poll results to be
circulated only if accompanied by directions as set out in resolutions implementing law
no. 28/2000, while also explaining that when broadcasters or the press circulate the
news – regardless of who may have disclosed it – of the existence of a poll, they shall
explain in detail whether the poll was carried out according to prescribed methods, on
which poll circulation is conditioned by the law.
If these explanations are not supplied together with the news relating to the poll,
broadcasters and the press shall air/publish, within 24 hours, the supplementary
explanations pursuant to the law - provided that the news author has supplied them with
such information - on the medium where the poll was circulated, with the same
relevance, per hour bracket, position and programming characteristics, used when the
poll was advertised; otherwise they shall air/publish, with the same methods mentioned
above, the clarification that the poll was not compliant with law requirements.
The party which carried out the poll is responsible for the actual abidance by
methodological requirements, pursuant to the law, as to the way the poll was carried
out.
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AGCOM also explained that the absolute prohibition to publish political polls
during the fifteen-day period before elections applies to all undertakings/parties,
including politicians.
An almost total compliance with current regulations by polling firms and mass
media was reported also with regard to the publication/airing of political poll results.
2.9. THE PROTECTION OF CHILDREN
Besides being an important step towards harmonisation of the regulatory
framework in this field, the entry into force, as from 8 September 2005, of the radio and
television Consolidation Act also clarified the meaning of amendments which had
already been introduced by law no. 112/04, by which the law-maker had intended to
strengthen the sanctioning system in case of violation of children protection rules. As a
matter of fact, under article 35 (paragraph 2) of the Consolidation Act (which is the
reference provision for the regulation of measures aimed at inflicting fines in this
context), all children protection rules shall provide for a sanction without the need to
adopt a previous invitation to perform. This article also confirms the statutory sanction
set out by above-mentioned law no 112/04 for all violations to regulations relating to
the protection of children in television broadcasting – including those laid down in the
television-and-children self-regulation Code of Conduct – with sanction amounts to be
set between € 25,000.00 and € 350,000.00. It should also be pointed out that, compared
to the provision included in article 31 of law no. 223 of 6 August 1990 (in force before
the entry into force of legislative decree no. 177 of 31 July 2005, which explicitly
repealed this law), the Consolidation Act provides for a reduction, from thirty to fifteen
days, in the delay allowed for the broadcaster to submit any justifications, while
removing the possibility of a cash settlement.
This removal was confirmed by law no. 37 of 6 February 2006 which, under
article 1, explicitly provides for the non-admissibility of a reduced payment in cases of
breach of children protection rules. On the other hand, it should also be highlighted that
the latter provision lifted the prohibition to use children under fourteen in
advertisements, which had been introduced by article 10 of law no. 112 of 3 May 2004
(see par. 1.2.6.).
In the framework of this changed regulatory picture, in the reference period
AGCOM carried out its supervisory action in three distinct areas with regard to children
protection.
The first area included tasks related to complaints by external parties (citizens,
user and consumer protection associations, parents’ associations, institutions, etc.). In
this connection, audio-visual material was gathered and analyzed, also by involving
qualified institutions such as regional communications committees (Co.re.coms.), the
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postal and telecommunications police, the Department of Performing Arts of the
Ministry of National Heritage and Culture, for inspections within their respective remit.
Following inspections, 13 complaints were dismissed by the relevant departments due
to groundless allegations, as the reported cases were considered not to have involved
any breach of children protection rules; 2 cases were also dismissed due to manifest
groundlessness, as the reported cases were not considered to be ascribable to sector
provisions.
Supervisory actions mentioned here were carried out jointly with actions
conducted by Co.re.coms., whose relations with AGCOM were enhanced in many cases
in the light of territorial functions delegated to them also with respect to the supervisory
action relating to children protection. In the same period information was supplied in
order to answer 5 parliamentary questions relating to children protection matters, and
other questions were also answered which had been asked by sector organisations with
regard to children protection in television programmes.
The second area involved the official monitoring of television programmes aired
by national terrestrial broadcasters. In the reference period improvements were made to
the operating system used to carry out the delicate and complex recording and analysis
of footage. In particular, frequent supervisory meetings were held with the group of
analysts, also for the purpose of making interpretative criteria and coding methods as
homogeneous as possible. In this respect, theoretical-regulatory updates were supplied
and group-discussion was used after viewing audiovisual recordings, while taking in
due consideration the evolution of jurisprudential guidelines and the measures adopted
by AGCOM in this field.
The monitoring system allowed to record programmes aired round the clock by
the following national television broadcasters: Rai Uno, Rai Due, Rai Tre, Rete Quattro,
Canale 5, Italia 1, La 7, Mtv, Rete A. The attention was focused in particular to the
monitoring of programmes aired in the 8:00 p.m. -11:00 p.m. bracket (including
evening newscasts), also considering that the prime time is children’s peak viewing
time.
Following some criticalities arisen during the monitoring, in 19 cases in-depth
analyses were thought to be required. In the framework of these closer investigations,
also following many complaints received, several episodes of programmes considered
to be of special interest were analyzed. This method was used, for instance, for “Smack
Down Wrestling”, a programme which was monitored for more than two months and
was subsequently inflicted a sanctioning measure by AGCOM. Lastly, the monitoring
work relating to advertising led to identify 18 advertisements which, for their having
children in leading roles, broke children-protection rules. However, in this connection
the above-mentioned repeal of the prohibition to use children under 14 in
advertisements should be kept in mind.
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The third area relating to children protection is represented by the constant
establishing of relations and joint work with institutions and sector organisations (the
television-and-children self-regulation committee, the Department of performing arts,
the postal and communications police, universities, and Co.re.coms.), as well as with
user protection associations. For example, following the framework agreement entered
into with the Naples Federico II University, a joint work was started with this
university, which led to carry out a research on some special aspects of the supervisory
action in television programmes. Contacts with some regional communications
committees were strengthened, also for the purpose of helping them launch projects
aimed at promoting local information and awareness campaigns on the relationship
between television and children (see par. 3.4.).
As to the sanctioning action, in the period under review 34 proceedings were
concluded which gave rise to the following measures:
• 23 orders-injunctions, of which:
- 8 were due to the breach of article 15, paragraph 10 of law no. 223 of 6
August 1990; AGCOM inflicted the following administrative sanctions,
broken down according to the seriousness of the breach and to the local
or national type of broadcaster:
- 1 administrative sanction amounting to € 75,000.00 (Resolution no.
137/05/CSP, broadcaster: RAI 1);
- 1 administrative sanction amounting to € 25,000.00 (Resolution no.
156/05/CSP, broadcaster: La 7);
- 1 administrative sanction amounting to € 20,000.00 (Resolution no.
83/05/CSP, broadcaster: Italia 1);
- 1 administrative sanction amounting to € 15,000.00 (Resolution no.
136/05/CSP, broadcaster: Italia 1);
- 1 administrative sanction amounting to € 4,000.00 (Resolution no.
82/05/CSP, broadcaster: Radio Gamma 5);
- 3 administrative sanctions amounting to € 1,500.00 (Resolutions
nos. 78/05/CSP, broadcaster: T9; 124/05/CSP, broadcaster:
Telenuovo Retenord; 145/05/CSP, broadcaster: Telemed);
- 1 was due to the breach of article 15, paragraph 11 of law no. 223 of 6
August 1990, as transposed in article 34, paragraph 1 of the
Consolidation Act: 1 administrative sanction was inflicted amounting to
€ 25,000.00 (Resolution no. 1/06/CSP, broadcaster: RAI 2);
- 1 was due to the breach of article 15, paragraph 13 of law no. 223 of 6
August 1990: 1 administrative sanction was inflicted amounting to €
25,000.00 (Resolution no. 150/05/CSP, broadcaster: LA7);
- 1 was due to the breach of article 8, paragraph 1 of law no. 223 of 6
August 1990, and article 4, paragraph 7 of AGCOM Resolution no.
538/01/CSP of 26 July 2001: 1 administrative sanction was inflicted
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amounting to € 50,000.00 (Resolution no. 147/05/CSP, broadcaster: RAI
1);
- 2 were due to the breach of the television-and-children self-regulation
Code of Conduct, pursuant to article 34 of legislative decree no. 177 of
31 July 2005:
- 1 administrative sanction was inflicted amounting to € 50,000.00
(Resolution no. 35/06/CSP, broadcaster: RAI 2);
- 1 administrative sanction was inflicted amounting to € 7,500.00
(Resolution no. 12/06/CSP, broadcaster: Telenord);
- 1 was due to the breach of article 4, paragraph 1, letter b of legislative
decree no. 177 of 31 July 2005, and paragraphs 2.2 and 2.4 of the
television-and-children self-regulation Code of Conduct; 1
administrative sanction was inflicted amounting to € 25,000.00
(Resolution no. 58/06/CSP, broadcaster: Italia 1);
- 7 were due to the breach of article 10, paragraph 3 of law no. 112 of 3
May 2004. 7 administrative sanctions were inflicted amounting to €
25,000.00 (Resolutions nos. 126/05/CSP, broadcaster: RAI 2,
127/05/CSP, broadcaster: Canale 5, 128/05/CSP, broadcaster: Rete
quattro, 129/05/CSP, broadcaster: LA 7, 131/05/CSP, broadcaster: Italia
1, 132/05/CSP, broadcaster: RAI 1, 133/05/CSP, broadcaster: RAI 3);
- 2 were due to the breach of article 1, paragraph 26 of law no. 650 of 23
December 1996:
- 1 administrative sanction was inflicted amounting to € 103,288.00
(Resolution no. 349/05/CONS, broadcaster: Retecapri);
- 1 administrative sanction was inflicted amounting to € 25,822.00
(Resolution no. 155/05/CONS, broadcaster: Gold7);
• 1 case was dismissed following a cash settlement for breach of article 15,
paragraph 10 of law no. 223 of 6 August 1990 (cash settlement amounting to €
1,032.00);
• 5 cases were dismissed for “merit” reasons for alleged breach of article 15,
paragraph 10 of law no. 223 of 6 August 1990;
• 1 case was dismissed for “merit” reasons for alleged breach of article 15,
paragraph 13 of law no. 223 of 6 August 1990;
• 4 cases related to the alleged breach of article 15, paragraph 10 of law no. 223 of
6 August 1990 were dismissed because deadlines had elapsed due to the lack of
Collegiate Bodies following the end of the first term of office of AGCOM’s
bodies.
Following the analysis of complaints relating to the alleged breach of children
protection rules the following measures were also adopted:
• 17 notifications, of which:
- 5 were due to the breach of article 4, paragraph 1, letter b of the
Consolidation Act;
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- 5 were due to the breach of article 4, paragraph 1, letter b of the
Consolidation Act in connection with article 34, paragraphs 3 and 4 of
the Consolidation Act;
- 1 was due to the breach of the television-and-children self-regulation
Code of Conduct in connection with article 34, paragraphs 3 and 4 of the
Consolidation Act;
- 1 was due to the breach of article 34, paragraph 1 of the Consolidation
Act;
- 1 was due to the breach of article 34, paragraph 2 of the Consolidation
Act;
- 1 was due to the breach of article 4, paragraph 1, letter b of the
Consolidation Act, of the television-and-children self-regulation Code of
Conduct in connection with article 34, paragraph 3 of the Consolidation
Act;
- 2 were due to the breach of article 1, paragraph 26 of law no. 650 of 23
December 1996;
- 1 was due to the breach of article 10, paragraph 3 of law no. 112 of 3
May 2004.
• 28 cases dismissed through administrative channels, of which:
- 16 cases were related to the alleged breach of article 15, paragraph 10 of
law no. 223 of 6 August 1990;
- 7 cases were related to the alleged breach of article 4, paragraph 1, letter
b of legislative decree no. 177 of 31 July 2005;
- 3 cases were related to the alleged breach of the television-and-children
self-regulation Code of Conduct;
- 2 cases were related to the alleged breach of article 1, paragraph 26 of
law no. 650 of 23 December 1996.
Lastly, it should be pointed out that AGCOM held hearings with the major
players involved in the radio and television market, including consumer associations.
Such hearings were considered to be a pre-requisite for the drawing of “guidelines on
the content of further obligations to be imposed on the radio and television general
public service” AGCOM is required to set out jointly with the Minister of
Communications under article 45, paragraph 4 of the Consolidation Act (see par. 2.6.).
With Resolution no 55/06/CONS of 1 February 2006 AGCOM then approved
draft guidelines on the content of further obligations to be imposed on the radio and
television general public service, which were consequently submitted to the Ministry of
Communications pursuant to the above agreement. The draft guidelines focus in
particular on the quality of the radio and television offer, while dealing with children
protection matters, for the purpose of guiding RAI towards a television programming
increasingly marked by compliance with children protection regulations and careful of
children’s needs and peculiarities.
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2.10 THE REGISTER OF COMMUNICATIONS OPERATORS AND THE
INFORMATIVA ECONOMICA DI SISTEMA (A MEDIA &
COMMUNICATIONS INDUSTRY DATABASE)
In order to lay special emphasis on the work of the Register of Communications
Operators (ROC), in 2005 AGCOM’s Council adopted some management tools which
significantly helped increase the quality of the service provided to users.
Among such tools mention should be made of a permanent call centre, on duty all
working days from 10:00 a.m. to 12:00 a.m., offering users an effective interface aimed
at supplying all useful information on the specific matter.
Moreover, in order to meet users’ needs especially as regards methods to fill in
the Register application forms, the relevant section of AGCOM’s website was totally
updated and is now more functional, so that it is possible to fill in different forms by
following a guided path which leads users through special information windows.
In the light of a relevant increase in registration applications, the adoption of new
management tools helped shorten significantly the processing time required to carry out
the registration procedure, which – with the exception of cases requiring either
supplements or corrections of the documents submitted – currently ends within the 660day
deadline as set out in article 19 of Resolution no. 236/01/CONS setting forth
“regulations for the organisation and keeping of the Register of Communications
Operators”.
To date, 13,927 undertakings have been registered, accounting for a 33%
increase compared to the previous year.
In the following figure registered undertakings are broken down per industry
type. Most registered undertakings are publishing firms, which account for 64% of the
total number of businesses, though this value has decreased approximately by 5%
compared to 2004.
Figure 2.2. Undertakings registered in the Roc, broken down per industry type (%)
192

Publishing Sound and/or television
broadcasting
I.T. communications services Advertising licensees
Nationwide agencies E-publishing
Programme producers and distributors
Source: data processed by AGCOM
The most significant data is the increase in the number of registration
applications by I.T. and telecommunications service providers. In this sector the
percentage of registered firms approximately went up from 2% to 7% in one year; in
terms of numbers this means going up from a little more than 200 to well over 1,000
registered firms. Most of them are sole traders, in most cases non-EU citizens managing
phone centres and Internet points. If the trend reported for the first four months of 2006
is confirmed, by the end of the year 20% of registered firms are expected to be
providers of I.T. and telecommunications services.
Percentages are in line with 2005 data as regards the following industry types:
• radio and television broadcasters (12.5% with 1,741 registered undertakings);
• advertising licensees (4.8 % with 665 registered firms);
• programme producers and distributors (8.4% with 1,167 registered firms);
• e-publishing firms (3.4% with 469 registered firms).
In the following figure undertakings registered in the ROC are broken down according
to their legal form.
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Approximately 41% of registered undertakings are companies of different sorts
(private/public companies, limited companies, etc.), while about 13% is composed of
associations, co-operatives, foundations, non-profit institutions, and about 9% are
(limited/unlimited) partnerships; undertakings whose form does not fall under the types
regulated by the Italian legal system, are listed as “miscellaneous”.
Figure 2.3. Undertakings registered in the Roc, broken down per legal form (%)
S.r.l. (limited companies) Sole traders Co-operatives
Associations
S.p.a. (private/public companies) S.n.c. (general/unlimited partnerships) Bodies/Boards S.a.s.
(limited partnerships)
Miscellaneous
Source: data processed by AGCOM
In line with the picture described above, in just one year the percentage of registered
sole traders went up from 9% to 12% of the total percentage.
Over the year 2005, thanks to the way the Register of Communications
Operators has been run, approximately 400 certificates of regularity could be delivered
to the Presidency of the Council of Ministers’ Information and Publishing Department,
for the purpose of enabling publishers to qualify either for State subsidies or for other
forms of benefits as provided for by publishing regulations.
With regard to the system allowing undertakings to submit their statements over
the Internet, by the end of 2006 a procedure will be set out which allows all annual
statements and their relevant official acknowledgement to be verified exactly.
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2.11. RELATIONS WITH CONSUMERS AND USERS
In its capacity as a controller body, AGCOM also has the fundamental task to
protect users and consumers with respect to services provided by electronic
communications operators. In 2005 this task substantially involved settling disputes
arising from relationships between telecommunications operators and users, handling
complaints filed by users, and monitoring the activation of unwanted services by
operators.
Disputes between users and telecommunications operators
Authority Resolution no. 182/02/CONS of 19 June 2002, setting forth the
“Adoption of regulations governing the settlement of disputes arising from relationships
between telecommunications operators and users”, in compliance with the principles
pursuant to law no. 249/97, represented a fundamental milestone along the way towards
an incisive protection of users.
In the period between May 2005 and April 2006 AGCOM handled 1,176
applications for interim measures relating to the reactivation of a service, the
termination of forms of abuse (such as the repeated failure to answer complaints, undue
billing, and admonitory actions being performed) and the faulty operation of the service
provided.
Following AGCOM’s actions which entailed carrying out verification, contact
and user information tasks, in most cases the telecommunications operator involved
spontaneously brought its behaviour into compliance with the requirements, while in 55
cases AGCOM had to adopt special measures which led to uphold users’ complaints in
53 cases and to reject them in 2 cases.
The revision of Resolution no. 182/02/CONS resulted in AGCOM’s adopting
Resolution no. 137/06/CONS, which amended the former resolution as regards the
provisions set out in article 5; in particular, under the new provisions the application for
interim measures shall be filed, simultaneously with or during settlement proceedings,
directly to the local Co.re.com., while recourse to AGCOM is only admitted if the
relevant Co.re.com. has not been entrusted with delegated functions (see. par. 3.4.).
While any action under article 5 is incidental with respect to settlement
proceedings for its being instrumentally related to them, the action required under
article 13 of Resolution no. 182/02/CONS and aimed at dispute-settlement by AGCOM
has an independent nature, as it implies a failure of settlement proceedings and cannot
be initiated if the same parties have already gone to court for that very dispute between
them.
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In the reference period 283 petitions were filed for the purpose of obtaining the
settlement of disputes arisen between users and telecommunications operators. From a
close examination of disputes different problems arose, not just relating to the basic
voice telephony service (such as non-activation and late activation, delays in faults
repair, and non-relocation of a telephone line) but also to broadband services (such as
problems related to the non-activation of an ADSL connection or to the provision of
Voice over Internet Protocol (VoIP) services), and to common law issues related to the
installation of network components (such as the laying of cables outside built-up areas).
As far as filed petitions are concerned, approximately 70 disputes were settled
by AGCOM, while preliminary investigations of the remaining disputes are still under
way for the purpose of examining cases, carrying out closer technical examinations,
requesting additional preliminary documents and discussion supplements.
As to concluded proceedings, 3 disputes were settled by the acceptance of users’
requests, while the remaining cases were closed by a nonsuit following an agreement
reached while proceedings were pending, so that a two-fold result was achieved, both in
deflation terms with respect to the common interest, and in terms of a settlement which
met both parties’ interests, with a perspective aimed at guaranteeing an actual protection
of users’ rights.
Petitions filed under articles 5 and 13 of Resolution no. 182/02/CONS all
accounted for an exponential increase, more than twice the number of those received by
AGCOM in the previous year, this phenomenon being probably due to a higher user
awareness of alternative protection tools, apart from standard law enforcement
instruments.
User complaint management: the Complaint Management Unit’s
actions
Under article 2, paragraph 12, letter m of law no. 481 of 14 November 1995
setting forth “Regulations for the competition and regulation of public utilities. Setting
up public utility regulatory authorities”, AGCOM “evaluates complaints and petitions
filed by single or associated users or consumers with regard to the compliance with
qualitative and rating levels by service providers, in whose respect AGCOM takes
action either by imposing changes, if advisable, to their operation methods or by
revising service regulations under paragraph 37”.
Paragraph 12, letter g, also states that AGCOM “supervises the carrying out of
services with inspection, access, document and useful information gathering powers,
while also identifying cases of automatic compensation towards the user by a service
provider if the latter does not abide by contractual clauses or provides the service at
lower qualitative levels compared to those set out either in service regulations pursuant
to paragraph 37, or in the programme contract or under letter h”.
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AGCOM enacted regulations for the settlement of disputes between users and
telephony operators with Resolution no. 182/02/CONS, as subsequently amended by
Resolution no. 307/03/CONS.
Under article 2 of the regulations users are entitled to file petitions and complaints –
also by submitting ad hoc forms available on AGCOM’s website – with regard to the
breach of rules by their electronic communications service providers or to commercial
and contractual aspects handled by the latter.
The submission of complaints by consumers and other parties involved was
simplified by a user-friendly form available on AGCOM’s website.
In 2005 approximately 7,000 complaints and requests for action submitted by
consumers, legal firms, consumer associations and other institutions were examined by
AGCOM.
Applications are not always submitted by filling in the on-line form mentioned
above, and cover several types of cases, such as, in particular:
- requests for action aimed at various types of compensation in compliance with
operators’ service charters;
- reports of activation of unwanted services;
- reports of lawbreaking with requests for the level of current sanctions to be
raised;
- complaints relating to general lawbreaking that would imply some regulatory
action;
- reports of poor-quality service provision;
- complaints relating to criticalities arising in the carrier pre-selection and local
loop unbundling service provision;
- problems concerning the billing of special-rate services;
- problems concerning the portability of mobile and fixed numbers;
- problems concerning the lack of territorial coverage by broadband services.
Some complaints involve requests for explanation with regard to electronic
communications regulations, mostly with respect to the activation of unwanted services,
contractual and billing problems and problems involving methods to re-enter the
incumbent operator’s network in case of local loop unbundling or carrier pre-selection
services.
Also in 2005 the Complaint Management Unit (UGS) set up by AGCOM in late
2003 carried out a systematic analysis and electronic filing of complaints submitted, by
which the compliance of operators’ behaviour towards users could be verified both with
telecommunications regulations and with general consumer protection rules. The UGS
then represented the necessary institutional lookout body for regulatory and supervisory
purposes.
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In particular, the consistency of the work carried out by operators was verified with
respect to applicable rules and regulations, such as the Code of Electronic
Communications and the regulations presently included in the “Code of Consumption”
(see par. 1.2.6.), and with respect to provisions set out in AGCOM’s resolutions, with
special reference to those covering carrier pre-selection, local loop unbundling and
mobile number portability services.
Users’ complaints relating to the breach of special provisions in the field of
electronic communications also led to initiate supervisory actions, in some cases also
with the help of the Financial Police, relating to some relevant aspects such as
activations of carrier pre-selection and local loop unbundling services being based
neither on the implementation of a contract setting forth the minimum information
under article 70 of the Code of Electronic Communications, nor on compliance with
precise regulations as set out in AGCOM Resolutions nos. 4/00/CIR and 13/00/CIR,
respectively regulating carrier pre-selection and local loop unbundling services.
In 2005, following users’ complaints, inspections were carried out, among other things,
with respect to Fastweb s.p.a., Albacom s.p.a., Noicom s.p.a. (presently “Eutelia”),
Elinet s.p.a., Elitel s.p.a., Tele2 s.p.a., Voxtel s.p.a., and Grapes Network Service.
Another aspect of special significance in the framework of users’ complaints concerns
complaints for traffic never used according to the users involved, especially as to traffic
forwarded to special-rate codes (“709”, “899”, “164”, “166”, “892”, as well as satellite
numbers).
In these cases, under article 10 of Resolution no. 179/03/CSP of 24 July 2003, a
user filing a complaint to court is entitled to detract the traffic reported as being of a
fraudulent origin until the settlement of the dispute.
In view of the great social significance of the use of special-rate codes, AGCOM carried
out some important actions within its remit, including that leading to the introduction of
a maximum rate ceiling with respect to some codes (see par. 2.2.).
Another aspect of considerable proportions concerns complaints relating to the
provision of mobile number portability services; there was a large number of complaints
by users reporting the non-activation of the number portability they had applied for. In
this respect AGCOM took action by raising the daily ceiling of ported numbers among
operators (see par. 2.3.) for the purpose of assuring that a higher effectiveness be
achieved in the service provision by mobile operators.
The major issues dealt with in the context of users’ complaints are briefly set
forth in the following table, together with the total number of complaints handled by
UGS.
Table 2.17. Types and number of complaints handled by UGS
Complaint type Total number
Traffic not acknowledged. Complaints lodged with a Court 1,516
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Activation of unwanted services 1,082
Non-portability of a mobile number 803
Challenge of amounts charged - Rates and fees not correctly charged - 618
Reduced-rate fees for special social needs
Non-activation of a requested service 447
Service outage 382
Non-deactivation of a service 292
Poor quality of service – Faults and repair time 272
Various contractual aspects and unconscionable clauses 238
Unwanted deactivation of a service 131
Non-relocation of a telephone line 83
Information denied or not properly supplied in accordance with the Service Charter 59
Reports submitted for information purposes only but not containing 84
any notification of malfunctioning
Complaints relating to special-rate services (199, 899, 878, etc.) 36
Traffic records 33
Contract withdrawal under article 5 of legislative decree no.185/99 – not allowed 27
Problems involving telephone directories 23
SIM card lock/unlock - Problems involving cellular phone cloning 21
Non-compliance with the Service Charter 18
Mobile phones: activation of unwanted SMS services 11
Problems involving telephone cards 8
ADSL line covered by another operator or not receded 9
Miscellaneous 300
Source: data processed by AGCOM
The following chart shows complaints handled by UGS in 2005, broken down
per operator. Undertakings against which not more than one complaint was received are
not included.
The following figures are absolute values and cannot represent grounds for
comparison among operators, as they should be related to the actual number of active
users.
As already mentioned, a significant aspect monitored by UGS concerns reports
of activation of services unwanted by customers (see table 2.18. below).
Figure 2.4. Number of complaints handled by UGS, broken down per electronic communications operator
UNIDENTIFIED OPERATOR
ALBACOM
ALCOTEK GROUP
BRENNERCOM
EDISONTEL
ELINET
ELITEL
EUTELIA
1 10 100 1,000 10,000
199

FASTWEB
FASTWEB MEDITERRANEA
GRAPES NETWORK SERVICES
H3G
NOICOM
TIM
TELE2 ITALIA
TELECOM ITALIA
TELECOM ITALIA MEDIA
TISCALI
VODAFONE
VOXTEL
WIND TELECOMUNICAZIONI
OTHER OPERATORS
Source: data processed by AGCOM
Table 2.18. Types and number of complaints handled by UGS with regard to unwanted services
Operator Unwanted service Complaints
processed in the year 2005
ALBACOM Carrier Pre-Selection
(CPS) and ADSL 14
MINOR OPERATORS CPS and other services 19
ELITEL-ELINET CPS 57
EUTELIA CPS 12
FASTWEB Pay-tv; changes to rates, 8
FASTWEB CPS 1
FASTWEB Local loop unbundling (separation from Telecom) 14
and fixed-number portability
H3G Mobile phone services 2
(ringtones, logos, etc.)
TELE 2 ADSL 4
TELE 2 CPS 94
TELECOM ITALIA ADSL and broadband 140
services activation
TELECOM ITALIA CPS discontinuance 15
TELECOM ITALIA Unwanted 102
tariff packages
TELECOM ITALIA Various fixed-line services 217
(answering service, 4-star,
telephone sets, etc.)
TELECOM ITALIA ADSL and broadband services 8
TIM Mobile phone services 27
(ringtones, logos, etc.)
TISCALI CPS 7
VODAFONE Mobile phone services 11
(ringtones, logos, etc.)
WIND ADSL and broadband services 18
200

WIND CPS 173
WIND Unwanted tariff packages 36
and fixed-line services
WIND Mobile phone services 15
(ringtones, logos, etc.)
WIND Local loop unbundling (unwanted 91
separation from Telecom)
Source: data processed by AGCOM
The following chart shows complaints relating to the activation of unwanted services,
broken down according to different operators.
Figure 2.5. Number of complaints relating to the activation of unwanted services, broken down per
operator
TELECOM ITALIA
WIND
TELE 2
ELITEL-ELINET
TIM
FASTWEB
OTHER MINOR OPERATORS
ALBACOM
EUTELIA
VODAFONE
TELECOM ITALIA MEDIA
TISCALI
H3G
Source: data processed by AGCOM
1 10 100 1,000 10,000
AGCOM’s work is carried out within a well-established regulatory framework
aimed both at guaranteeing competition and at protecting users, in the wake of European
directives. At times these targets can even seem to be in conflict between them, as is the
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case for local loop unbundling and carrier pre-selection services, whose regulations
allow the user to apply directly to the alternative operator without notifying the access
operator. This entails an ever-growing involvement by AGCOM in fulfilling its tasks
for the purpose of supervising compliance with regulations and guaranteeing user
protection.
Activation of unwanted services
With regard to the problem of unwanted services activated by
telecommunications operators, which has lately reached remarkable proportions also in
the light of the growing number of complaints filed by users, AGCOM investigated and
adopted several sanctioning, advisory, supervisory and regulatory lines of action.
As far as sanctioning actions are concerned, AGCOM initiated several proceedings with
respect to the arbitrary activation and deactivation of unwanted services, with special
reference to the carrier pre-selection service (CPS) (see par. 2.5.).
With regard to supervisory actions, as a first step AGCOM started a close
examination of complaints received since the date of effect of the new organisation
structure (see par. 4.1.). A profitable joint work with consumer associations was also
started for the purpose of making AGCOM’s action a more effective and incisive one
and primarily focusing actions on specific malfunctions, while making a comparison
between data resulting from complaints filed with AGCOM relating to unwanted
services and similar data gathered by Associations.
Following this analysis and comparison effort, macro categories of poor services
were identified, from which most disputes presently originate in the context of
unwanted service activation, and the most frequent types of complaints were also
identified within this field. In particular, it turned out that cases can systematically fall
within the following four major areas which seem to need special attention:
• arbitrary activation of an ADSL connection;
• arbitrary activation/deactivation of the carrier pre-selection service (which is
active as it was applied for due to the existence of a contract with another
operator);
• arbitrary activation of other services, such as those of an innovative nature;
• delivery of products not ordered by the user, such as mobile TV phones and
cordless phones.
AGCOM also strengthened the monitoring action and made it a more systematic one
by adopting an inspection plan aimed both at identifying, also by the work carried out
by the Financial Police Special Squad and by the Postal and Telecommunications Police
(see par. 3.7.), contexts and causes of these phenomena and at taking action from a more
specifically regulatory viewpoint, apart from the sanctioning aspect.
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As a matter of fact, the high number of complaints filed by users and also by
consumer associations in connection with these types of arbitrary activation of services
by electronic telecommunications operators highlights the fact that some operators
adopt commercial practices and criteria which are inconsistent with the principles of
fairness and transparency on which relationships between operators and users should be
based.
With Resolution no. 164/05/CSP AGCOM launched the setting up of a work group,
which took office in early March 2006 for the purpose of:
1) reaching an agreement on the quality of call centre services. This joint
agreement between associations and undertakings, to cover both inbound
services (such as customer care services provided by telephone) and outbound
services (such as telephone calls made by communications service marketing
operators in order to sell these services to users), will set out precise quality
standards and easy methods for the hearing impaired to access customer care
services, while promoting the adoption of organisation policies not solely based
on the achievement of quantitative or profit targets but also focusing on
achieving precise quality results;
2) promoting the adoption of a self-regulation Code by undertakings for the offer
and provision of electronic communications services and products to users.
On the basis of complaints received and its own case records relating to the
activation of services unwanted by users, AGCOM drafted a self-regulation code
requiring compliance with minimum additional fundamental obligations by
undertakings, besides those already provided for by current regulations. The work group
has presently been carrying on with the work while undertakings have been evaluating
all technical, organisational and economic aspects related to entering into the agreement
and adopting the self-regulation code.
AGCOM has also been considering the advisability to set out additional regulatory
measures and, under the powers it is granted by the law, to stress the need to strengthen
sanctions imposable on undertakings in order to further discourage them from having
recourse to the arbitrary activation and deactivation of electronic communications
services.
The Public Relations Office
The Public Relations Office (Urp) deals with individual citizens, consumer
associations, communications operators and other parties.
In the reference period approximately 25 telephone calls were received daily, on
average. Besides relating to general inquiries on the provision of electronic
communications services, these calls also involved citizens’ complaints, often followed
by specific actions taken by AGCOM.
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Complaints filed through the info@agcom.it e-mail address underwent an
extensive content analysis, and were simply filed by subject and party involved. Several
thousands of complaints arrived through this route each month.
Complaints most frequently involved the following subjects: ADSL lines, with special
reference to the poorness of resources in some areas of the national territory, the mobile
number portability service, mostly in connection with delays in the provision of service,
inquiries on the methods to register in the Register of Communications Operators and
on the way the Media and Communications Industry Database works, reports of
unwanted service activation, inquiries on the new numbering system, and requests for
explanations as to Internet connections made without the user’s being aware of them.
Nearly 5% of e-mails which were taken into account dealt with the protection of
children’s rights and significantly helped AGCOM carry out its children protection
action. More recently, besides involving television programmes, complaints relating to
children protection also concerned the use of mobile phones by children, with special
reference to problems related to the supply of some extra-charge mobile services whose
content is not appropriate for children though it can be easily accessed by them.
Within the scope of its remit Urp also kept constant relations with consumer
associations and established relations with third parties while promoting the
“Tecnologie, prodotti e caratteristiche dei servizi di telecomunicazione”
(Telecommunications service technologies, products and features) seminar, held in
Rome (15-17 June 2005) by AGCOM and addressed to representatives of national
consumer associations. Urp also worked jointly with Business International in order to
arrange two round tables with AGCOM on these subjects: “Il futuro del mercato delle
telecomunicazioni nella nuova era della convergenza” (the future of the
telecommunications market in the new convergence age), held in Rome at the Esedra
Hotel on 30 September 2005, and “La rivoluzione digitale nella nuova era della
convergenza” (the digital revolution in the new convergence age), held in Rome at the
Westin Excelsior Hotel on 19 December 2005.
2.12. JURISDICTIONAL PROTECTION
In the period between 1 May 2005 and 30 April 2006 160 jurisdictional appeals
were lodged with the Lazio region Administrative Court (TAR) against measures taken
by AGCOM. Of these, 19 cases involved telecommunications, 13 cases involved equal
access to mass media (the so-called “par condicio”), 4 cases concerned organisational
matters, 16 cases had to do with staff matters, and 108 cases involved audiovisual
matters.
Moreover, 103 precautionary petitions were filed, 90 of which were heard, while
hearings relating to the remaining cases were postponed to the merit. At a precautionary
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stage hearings resulted in 43 petitions 8 being upheld and the remaining 47 being
rejected.
50 appeals were heard “for merit reasons”, with 47 of them being rejected and 3
being upheld 9 .
In the same reference period 56 appeals were lodged before the Council of State,
42 of which concerned audiovisual matters 10 , 2 concerned equal access to the media, 8
concerned telecommunications, and 3 concerned staff matters. 7 of them were rejected
“for merit reasons” (with a successful result for AGCOM) while 1 was upheld (with an
unsuccessful result for AGCOM).
In the period in question significant dispute-settlement decisions were made by
the administrative judge – also relating to appeals initiated before the reference period –
which represent important shifts in the case-law trend followed with regard to matters
concerning AGCOM’s institutional action.
In particular, with regard to the audiovisual sector, the administrative judge of
first instance rejected all 44 appeals lodged against article 5 (item three) of the radio and
television advertising and teleshopping regulations (as adopted with Resolution no.
538/01/CSP), as introduced with Resolution no. 34/05/CSP, setting out hour-bracket
regulations for the airing of teleshopping programmes, advertisements and
“infomercials” relating to astrology, cartomancy and prediction services (Lazio TAR,
section II, no. 14302/05). The administrative judge then fully confirmed the validity of
measures introduced by AGCOM (among which there is the prohibition to broadcast
advertisements relating to astrology, cartomancy and prediction audiotex services in the
07:00 a.m.-12:00 p.m. hour bracket) both in terms of the procedure followed for the
adoption of the challenged resolution, and from a substantial viewpoint.
Still with regard to radio and television advertising the Lazio TAR rejected two
appeals lodged by Gruppo Editoriale l’Espresso and by RTI and requesting the quashing
of Resolution 538/01/CSP, setting forth regulations on radio and television advertising
and teleshopping, and of subsequent amending resolutions nos. 250/04/CSP and
105/05/CSP (Lazio TAR, section II, nos. 14965/05 and 14357/05).
The Lazio TAR stated the full legitimacy of article 4, paragraph 5, of the abovementioned
regulations with respect to the section allowing advertising breaks during the
airing of sports events, not only during regular half-times prescribed by sports
8
42 of which involved appeals requesting the quashing of Resolution no. 34/05/CSP amending
regulations on television advertising and teleshopping.
9
In particular, 44 appeals lodged to request the quashing of Resolution no. 34/05/CSP were rejected “for
merit reasons”.
10
In particular, 32 appeals were lodged with (upheld) suspension petition with respect to Lazio TAR
measures issued in connection with appeals relating to the quashing of Resolution no. 34/05/CSP.
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egulations but also during such interruptions in sports games as can be added to the
prescribed duration of the playing time, provided that the insertion of an advertisement
does not interrupts a sports action. In the administrative judge’s opinion, this provision,
which is based on a “non-technical” interpretation of the world “half-times” included in
article 11 of Directive no. 89/552/EEC, i.e. a more extensive interpretation compared to
the mere indication of an intermission dividing halves of a game, operates “from a
perspective aimed at maintaining the integrity and value of a programme by setting out
an objective and unequivocal principle, and one that is not left to a broadcaster’s
discretion or arbitrary evaluation”. Still according to the Lazio TAR’s judgement,
rather than deviating from EEC rules and regulations, this regulation explains and
clarifies their content with more stringent and restrictive enforcement boundaries (Lazio
TAR, section II no. 14965/05, quoted above).
With special reference to the recent amendment to the quoted regulations, as
provided for by Resolution no 105/05/CSP, which set for football games a maximum
number of 6 minispots within the regular playing time, the Lazio TAR considered such
regulatory action to be “implementing and consequential to the rule of principle
included in the EEC directive” (see Directive no. 89/552/EEC, and subsequent
amendments, quoted above) “and making its implementation and specification a clear
and effective one with regard to the section where minispots are considered as
exceptional advertisements, a section which would otherwise be bound to remain
undetermined”.
The judge also added that “the 6-minispot limit” set by AGCOM “is entirely
reasonable as it is clear that a higher number, to be broken down into two 45-minute
halves, would not allow to consider minispots as isolated ads.” (Lazio TAR, section II,
no. 14357/05, quoted above).
Still with regard to the audiovisual sector, in confirming Lazio TAR’s judgement
no. 184/2005, the Council of State stated that AGCOM has the power to issue directives
on service charters under article 1, paragraph 6, letter b, no. 2 of law no. 249/97 also
with respect to private undertakings which work in the telecommunications field
(Council of State, Order no. 3147/05). As, in mentioning operators, this provision does
not specify that it should be public service operators, or that it should be a public service
charter, it shall apply to all telecommunications and radio and television service
operators which provide either public or entrepreneurial services.
In the Council of State judges’ opinion, for the purpose of interpreting article 1,
paragraph 6, letter b, no. 2 of law no. 249/97 the word “operator” cannot have a strict
interpretation, one that is limited to the operator of a business necessarily having a
public-service nature, but it should be interpreted in a wider sense, such as to refer to
any undertaking operating in the telecommunications sector on the basis of a widening
measure issued by the Communications Regulatory Authority. In this connection the
Council of State added that such a pay-tv operator as Sky, which also provides
television news, carries out tasks which can qualify, at least partly, as public service, by
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virtue of the provisions under article 6, paragraph 1 of law no. 112/04 (the so-called
“Gasparri law”).
This regulation defines radio and television news as a service of public concern,
regardless of the news content and the technical methods by which it is provided, and
apart from the public or private nature of the party which provides this service (Council
of State, section VI, Order no. 3147/2005).
Lastly, the Lazio TAR upheld appeals lodged by RTI, Publitalia 80 and RAI
requesting the quashing of Resolutions nos. 150/05/CONS, 151/05/CONS, and
152/05/CONS, by which AGCOM had inflicted administrative fines equal to 2% of
advertising sales made in 2003 due to the breach of the warning not to perform
behaviours contrary to article 2 of law no. 249/97 which prohibits dominant positions in
the mass media field (TAR, section II, judgements nos. 13766/2005, 13767/2005,
13768/2005). The administrative judge deemed AGCOM’s warning not to perform
behaviours contrary to article 2 of law no. 249/97 - for it being a mere order to comply
with an already unbreakable, binding and imperative specific law provision - not to be
one of those coercive administrative acts for which, in case of non-compliance, a fine is
inflicted under article 1, paragraph 31 of law no. 249/1997.
With regard to the telecommunications field, the Lazio TAR confirmed the
legitimacy of five resolutions relating both to regulatory accounting and to Telecom
Italia’s interconnection reference offers (Resolutions nos. 399/02/CONS; 02/03/CIR;
03/03/CIR; 11/03/CIR; 289/03/CONS). These resolutions had been adopted by
AGCOM in the framework of European rules and regulations aimed at the development
of competitive dynamics in the communications market, so granting new entrants the
possibility to use the existing copper distribution network (the so-called access
network), with the development of an “intermediate market” between incumbent
operators and end users, pursuant to regulations (involving the so-called “last mile”
issue) characterized by cost-oriented rates for the use of networks by new entrants
((TAR, section II, judgement no. 1773/06).
With regard to organisation matters the Lazio TAR ruled on two appeals lodged
by Torre Argentina Società di Servizi s.p.a., Divisione Centro D’Ascolto
dell’informazione radiotelevisiva (the Torre Argentina’s division for radio and
television news monitoring), against AGCOM and Isimm Ricerche s.r.l., on one hand,
on account of the revocation of the invitation to tender for the awarding of the public
service contract for the monitoring of national broadcasters’ television programmes
(with regard to the fields of socio-political pluralism, users’ guarantees and
programming obligations), and, on the other hand, on account of the exclusion of the
claimant’s offer (“which turned out to be higher than the tender basis”) from the
invitation to a private treaty.
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The first appeal was rejected, while the other was declared inadmissible.
Rejection of the appeal allowed Isimm Ricerche s.r.l. to start the monitoring service,
which is a prerequisite for AGCOM to be able to conduct a complex supervisory action
relating to several aspects of the radio and television programming (such as political
pluralism, advertising, production shares, programming obligations), to be carried out
mostly by the Commission for Services and Products, pursuant to law no. 249/97 (TAR,
section II, judgement no. 2562/06).
Lastly, as to the appointment of members of the National Council of Users,
following Lazio TAR’s ruling (no. 14185 of 2004) which quashed Resolution no.
162/04/CONS and its relevant proceedings, in the reference period the Council of State
issued a ruling confirming the purview as set forth in the ruling involved, though on
different grounds. In particular, the appeal judge explained that AGCOM is entitled to
appoint, as members of the National Council of Users, also experts nominated by
associations which, under their Articles, do not pursue consumer and user protection as
their only aim.
The requirement for the exclusive aim of consumer and user protection to be set
out in the Articles of Association, under article 5, paragraph 1 of law no. 281 of 1999,
as referred to in AGCOM’s regulatory enforcement provisions, shall be construed as a
non-exclusive requirement, contrary to what was held by the judge of first instance. The
primary rule under which the National Council of Users was set up (article 1, paragraph
28 of law no. 249/1997) actually provides for further values and interests besides user
protection ones pursuant to law no. 281 of 1999.
Hence, consumer associations which pursue additional values, as specifically
provided for by law no. 249/97 setting up AGCOM, shall also be admitted to appoint
their own membership (Council of State ruling, section IV, no. 3420 of 24 May 2005).
2.13. THE CONFLICT OF INTERESTS
Law no. 215 of 20 July 2004 setting forth “Regulations governing the settlement
of conflicts of interests” granted control powers to AGCOM for the purpose of assuring
the neutrality of the public action carried out by holders of government offices.
AGCOM shall exert its supervisory power also on the assets of government-office
holders’ spouses and relatives within the second degree, while also verifying that
undertakings which work in the integrated communications system - under article 2,
paragraph 1, letter g of law no.112 of 3 May 2004 - and either refer to a holder of
government offices, his/her spouse and/or relatives within the second degree, or are
under the above-mentioned parties’ control, do not perform such behaviours as may
provide a “privileged support” to holders of government offices, so breaking provisions
laid down in law no. 223 of 6 August 1990, in law no. 249 of 31 July 1997, in law no.
28 of 22 February 2000, and in law no. 112 of 3 May 2004.
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With Resolution no. 417/04/CONS setting forth “regulations settling conflicts of
interest” AGCOM set out and worked out organisational changes and regulatory actions
relating to procedures and ascertainment criteria provided for within the scope of the
conflict of interest. This resolution was amended to a significant extent by AGCOM
Resolution no. 392/05/CONS setting forth “amendments and supplements to regulations
settling conflicts of interest”, pursuant to which the “privileged support” ascertainment
phase shall be carried out by AGCOM’s Council, while the Commission for Services
and Products shall carry out preliminary investigations and ascertain any lawbreaking
which was a precondition to such support, in all cases where the ascertainment of any
lawbreaking has already been entrusted by law to the Commission.
Regulations approved in 2004 laid the responsibility of the totality of
proceedings involving a conflict of interests (in their two phases which involve
verifying a breach of the benchmark law and subsequently ascertaining any privileged
support) within AGCOM’s Council’s remit. The reason was to be found in article 1,
paragraph 6, letter c, no. 14 of law no. 249 of 31 July 1997, under which AGCOM’s
Council shall exercise all functions and powers not explicitly granted either to the
Commission for Services and Products or to the Commission for Infrastructures and
Networks.
The complex case of the conflict of interests was conceived as a unique
example, whose relevant functions and scope were entrusted to AGCOM’s Council.
In time, the implementation practice showed that the breach of some provisions relating
to “benchmark” laws – law no. 223 of 6 August 1990, law no. 249 of 31 July 1997, law
no. 28 of 22 February 2000, and law no. 112 of 3 May 2004 – was relevant with respect
to responsibilities law-makers had already entrusted AGCOM with, and whose
procedure had already been set out by explicitly laying them on a collegiate body
different from the Council. Reference is made in particular to the breach of provisions
pursuant to laws no. 112/04 and no. 28/00 and relating to the compliance with principles
of pluralism, objectivity, completeness, fairness and impartiality of information, and
provisions on “par condicio” (equal access to the media) in whose respect AGCOM’s
Commission for Services and Products is granted supervisory, ascertaining and
sanctioning powers pursuant to law no. 249/97.
From the impossibility to bring the whole procedure involving conflicts of
interests unequivocally within the Council’s scope the need arose, with respect to cases
in point, to bring the ascertainment function within the Commission for Services and
Products’ scope. Moreover, by following this approach a homogenous treatment can be
guaranteed, from a procedural viewpoint, to all radio and television undertakings as to
rules and regulations governing par condicio and the compliance with information
pluralism principles.
On the contrary, under the previous regulatory system, a breach among those
mentioned above would have fallen either within the Council’s scope or within the
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Commission for Services and Products’ scope, depending on it having been ascertained
as committed respectively by undertakings referring to a holder of government offices,
his/her spouse and/or relatives within the second degree, or by undertakings not being
under this kind of control.
2.14. “PAR CONDICIO” (equal access to the media in electoral campaigns) and
INFORMATION PLURALISM
The Communications Regulatory Authority acts as a watchdog with regard to the
implementation of current regulations governing political propaganda and information,
within the scope of its tasks as set out in article 1, paragraph 6, letter b, no. 9 of law no.
249 of 31 July 1997, as well as information pluralism and protection of the principles of
information fairness, completeness, impartiality and objectivity, under articles 3 and 7
of legislative decree no. 177 of 31 July 2005.
The watchdog function is closely linked to the supervisory and regulatory
actions, respectively through the monitoring of national radio and television
broadcasters and the press, and through regulations governing cases as provided for by
law-makers with law no. 28 of 22 February 2000 setting forth “Provisions aimed at
ensuring equal access to the media during electoral and referendum campaigns, and at
governing political broadcasting”, and pursuant to above-mentioned articles 3 and 7 of
legislative decree no. 177 of 31 July 2005.
The implementation of regulations adopted by the Communications Regulatory
Authority and by the Commissione parlamentare per la vigilanza dei servizi
radiotelevisivi, the Parliamentary Supervisory Board for the general policy of radio and
TV broadcasting services - within their respective scope and in view of different
elections - and the verification of lawbreaking which are committed, both aim at
initiating preliminary investigation proceedings which then result in the adoption of
final measures by AGCOM’s Commission for Services and Products.
The scope of AGCOM’s action covers national private radio and television
broadcasters, the press, the radio and television general public service concessionnaire –
as regulated by the Commissione parlamentare per l’indirizzo generale e la vigilanza
dei servizi radiotelevisivi, the Parliamentary Supervisory Board for the general policy of
radio and TV broadcasting services – as well as local radio and television broadcasters.
As regards supervisory and guarantee actions and preliminary investigations relating to
the latter, AGCOM has recourse to the collaboration of Co.re.coms. (regional
communications committees, see par. 3.4.), its functional bodies, whose role, as
originally provided for by law no. 28/00, was extended by special provisions intended
for local radio and television broadcasting following amendments to law no. 28/00 by
law no. 313/03 (introduction of a specific “Heading” into law 28/00; adoption of the
self-regulation code issued by the Minister of Communications’ decree of 8 April
2004).
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In the timeframe between 1 May 2005 and 30 April 2006 102 measures were
adopted by the Commission for Services and Products with regard to the non-electoral
period as well as to specific elections.
The non-electoral period is regulated by Resolution no. 200/00/CSP of 22 June
2000, setting forth “provisions implementing regulations governing political
broadcasting and equal access to the media in non-electoral periods”, as supplemented
by Resolution no. 22/06/CSP of 1 February 2006 setting forth “provisions enforcing
current rules and principles with regard to political broadcasting and equal access to the
media in non-electoral periods”, which strengthens the sanctioning protection in periods
immediately before elections by making reference both to sanctioning measures under
article 10, paragraphs 3 and 8 of law no. 28/00 and to fines under article 1, paragraphs
31 and 32 of law no. 249/97.
The radio and television general public service concessionnaire is required to
comply with the Commissione parlamentare per l’indirizzo generale e la vigilanza dei
servizi radiotelevisivi regulations of 18 December 2002 relating to “political
broadcasting and self-produced broadcasts in periods not involved in electoral or
referendum campaigns”, as amended by resolution of 29 October 2003.
In order to enforce the aforementioned resolutions AGCOM conducted 14
proceedings and adopted 14 measures, including 11 dismissal resolutions, 3 of which
involved news, 1 involved fee-paying self-produced broadcasts and 7 involved
spontaneous compliance by press publishers and television broadcasters with regard to
political polls.
Two measures entailed declaratory judgements barring further proceedings due
to the lack of formal and procedural requirements, while the last measure was adopted
in the period before spring 2006 general elections, pursuant to above-mentioned
Resolution no. 22/06/CSP, and concerned a television current affairs programme
characterized by a host anchoring the programme in the absence of discussion and by an
evident lack of balance, as just one political party was portrayed. With regard to the
case in point AGCOM prescribed the airing of a message setting forth the lawbreaking
that had been committed (article 10, paragraph 8, letter a of law no. 28/00), and it also
inflicted an administrative fine under article 1, paragraph 31 of law no. 249/97.
The watchdog task carried out by AGCOM also aims at causing radio and
television information relating to some given subjects, with respect to constitutionally
relevant socio-political initiatives, to be supplied in compliance with the fundamental
and general principles of the radio and television system under articles 3 and 7 of the
radio and television Consolidation Act, while also protecting a person’s fundamental
rights in the communications sector, including radio and television. In acting as a
watchdog AGCOM adopted 2 policy provisions, one with regard to primary elections
aimed at nominating candidates standing for Prime Minister at 2006 general elections,
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and the other relating to the collection of signatures aimed at calling a law-making
referendum with regard to the constitutional law purview amending Part II of the
Constitution.
In particular, with regard to the protection of the fundamental principles of the
radio and television system, which are to be identified in pluralism, fairness,
completeness and impartiality of information, as well as to the sensitivity to different
opinions and political trends, AGCOM adopted 8 measures, 3 of which involved
dismissal of cases relating to primary elections, and 5 involved reinstatement pursuant
to previous Authority resolutions relating to similar cases.
During the electoral period AGCOM conducted 78 proceedings, which ended
with the same number of measures being taken. In particular, as regards compliance
with Resolution no. 10/05/CSP of 3 February 2005 setting forth “Provisions
implementing regulations governing political broadcasting and equal access to the
media with regard to the campaign for regional elections called for 3 and 4 April 2005”,
in 5 cases complaints were dismissed due to the lack of proceedings requirements under
article 10, paragraph 1 of law no. 28/00; 9 more cases were dismissed, 7 of which
involved political information, 1 involved political broadcasting and 1 was related to
institutional broadcasting.
With regard to Resolution no. 11/05/CSP of 3 February 2005 setting forth
“Provisions implementing regulations governing political broadcasting and equal access
to the media with regard to campaigns for municipal and provincial elections called for
3 and 4 April 2005”, in 2 cases it was not possible to initiate proceedings as complaints
lacked requirements under article 10, paragraph 1 of law no. 28/00, while 6 cases were
dismissed, 2 of which involved political polls, 2 involved information and 2 involved
free-of-charge and fee-paying self-produced broadcasts.
Enforcement of Resolution no. 36/05/CSP of 16 May 2005 setting forth
“Provisions implementing regulations governing political broadcasting and equal access
to the media with regard to campaigns for national referenda partially repealing law no.
40 of 19 February 2004 setting forth “Regulations on medical assisted procreation”,
called for 12 and 13 June 2005” resulted in 25 measures.
Of these, 15 formalized the dismissal of proceedings as follows: 4 cases relating
to political information (in the context of a resolution, besides dismissal relating to the
electoral campaign period, the airing was prescribed of a message setting forth the
breach committed), 2 cases relating to free-of-charge self-produced political broadcasts,
5 cases relating to political broadcasting, 1 case relating to political and electoral polls
either broadcasted or published in the press, and 3 cases relating to electoral messages
either broadcasted or published in the press. In 4 cases it was not possible to initiate
proceedings as complaints lacked requirements under article 10, paragraph 1 of law no.
28/00, while 6 reinstatement measures were adopted with regard to information matters.
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In 2 of the latter cases the insertion of a compensating air time was prescribed; in 3
cases, alongside the reinstatement order, an accessory sanction was also imposed under
article 10, paragraph 8, letter a of law no. 28/00, which prescribed the airing of a
message setting forth the breach committed; in 1 case only the airing of the message
setting forth the breach committed was prescribed.
As to the enforcement of Resolution no. 29/06/CSP of 3 February 2006 setting
forth “Provisions implementing regulations governing political broadcasting and equal
access to the media with regard to campaigns for general elections to the House of
Deputies and to the Senate of the Republic, called for 9 and 10 April 2006”, it should be
pointed out that, with special reference to the above electoral campaigns, by the
uninterrupted updating of data (also published on AGCOM’s website) relating to the
monitoring of national television broadcasts it was possible to verify easily and within a
short timeframe any violations of the equal access to the media, and to initiate
committal proceedings also on an automatic basis.
Actions taken by AGCOM were of several types and rich in content, and
involved both political information and political broadcasts.
As to cases involving political information AGCOM adopted 23 measures as
follows;
• 3 measures adopted under article 10, paragraph 9 of law no. 28/00 and providing
for an order and notice for the national television information task to comply
with provisions on equal access to the media;
• 1 measure enjoining the concessionnaire to comply with the correctness and
impartiality of information, and ordering that a message be aired setting forth the
breach committed with respect to article 5 of law no. 28/00;
• 1 nonsuit measure due to the non-legitimation of the petitioner as to the
achievement of the quorum of one-fourth of voters;
• 12 reinstatement measures under article 10, paragraphs 1 and 5 of law no. 28/00
on information matters, ordering that news reports be aired with a fair
attendance of petitioner politicians;
• 2 measures providing for the enforcement both of the restoring sanction required
in order to restore fair treatment (article 10, paragraph 5, law no. 28/00), and of
the administrative fine – under article 1, paragraph 31 of law no. 249/97 – for
non-compliance with a previous measure adopted by AGCOM;
• 1 case dismissed relating to a programme aired by the radio and television
general public service concessionnaire on a regional basis;
• 1 measure providing that the presence of the petitioner politician, once aired, be
notified on condition to verify the relevant adequacy and effectiveness;
• 1 measure ruling the enforcement of an administrative fine – under article 1,
paragraph 31 of law no. 249/97 – following the non-observance of a previous
measure adopted by AGCOM;
• 1 measure ordering the public concessionnaire to notify measures to be adopted
with regard to compliance with provisions issued by the Commissione
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parlamentare per l’indirizzo generale e la vigilanza dei servizi radiotelevisivi as
regards a fair and impartial hosting and the absence of discussions, on condition
to verify the relevant adequacy and effectiveness.
As to cases involving political broadcasting 4 measures were adopted as follows:
• 3 measures ordering that political broadcasting programmes as scheduled by
radio and television broadcasters on a national basis, once aired, be notified on
condition to verify their adequacy and effectiveness with respect to compliance
with access principles as provided for by the law;
• 1 case dismissed following compliance with an order issued by AGCOM.
The total number of measures adopted by AGCOM also include calls stemming
from supervisory and guarantee actions and orders addressed to all national radio and
television broadcasters. In particular, in the first phase of the electoral campaign a
measure was adopted which called to comply with provisions set out with regard to
news broadcasts, with special reference to newscasts, in order to assure a fair treatment
of all coalitions and a balanced presence of competing party lists within each coalition.
In the last days of the electoral campaign AGCOM also adopted 3 orders
prescribing that politicians and parties be guaranteed fair access, and that fair treatment
and a balanced attendance of party lists running for elections be assured in national
news broadcasts and in particular in newscasts.
Finally, still with a view to AGCOM’s watchdog task as regards the enforcement of
current provisions on political information, mention should be made of 4 circular letters
issued in order to provide interpretative explanations. The first letter concerns
programmes dealing with in-depth news coverage, aired by national television
broadcasters, the second and third letters concern institutional broadcasting and free-ofcharge
self-produced political programmes aired by local radio and television
broadcasters, while the last one concerns political and electoral polls published in the
press and aired on television.
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3. AGCOM’S INSTITUTIONAL RELATIONS
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3.1 INTERNATIONAL RELATIONS
AGCOM’s role in the international dimension
The year just ended represented a very significant moment in AGCOM’s
institutional commitment on the international scene.
In the first place, the European legislation reform processes started to go into full
swing, with regard to both the electronic communications sector (with the so-called
Review 2006), and the audiovisual sector (with the revision of the “TV Without
Frontiers” directive), the results of which are bound to affect the role and activities of
the national Authorities called upon to apply the new European regulations. AGCOM
has devoted particular attention to these processes, taking an active part and presenting
proposals and documents of in-depth analysis in the various institutional venues.
More in general, AGCOM has verified the growing importance of the
international dimension in the sectors of its jurisdiction, also seen in the progressive
diffusion of market integration processes and in the industrial aggregation operations
taking place worldwide. For this reason, it was AGCOM’s intention to ensure an
increasingly assiduous and qualified presence in the international discussion and assume
a leadership role on several topics of particular importance in European-level discussion
(for example, on the topics of regulatory accounting and international roaming, within
the framework of the European Regulators Group – ERG).
Consistent with this policy line, AGCOM continued its institutional
commitment, at the various international venues, of development and discussion of the
themes regarding electronic communications (in addition to the above-mentioned ERG,
worthy of mention are the Communications Committee and the Radio Spectrum
Committee) and audiovisuals (the High-Level Group of National Regulatory
Authorities, the Contact Committee, the Standing Committee on Transfrontier
Television, and the European Platform of Regulatory Authorities), and worked on
strengthening and expanding the network of relations with foreign authorities and
institutions, through the formalization of bilateral agreements and twinning projects, as
well as the holding of meetings and information exchanges.
Electronic communications
Over the past few years, the European Regulators Group (ERG) has undoubtedly
made a name for itself as a privileged place of development and comparison between
the European Commission and the national Authorities on the main regulatory themes
regarding the electronic communications sector.
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First of all, the year 2005 registered important progress in the carrying out of the
process defining the institutional and organizational arrangement of the Group (started
after Commission decision no. 2004/641/EC, amending decision 2002/627/CE).
The participation in the proceedings of the ten new Member States of the
European Union was consolidated, and the Authorities of Turkey and Croatia joined the
ERG with “observer” status. 11
From the organizational standpoint, the ERG has undertaken the coordination of
the thematic working groups of the Independent Regulators Group 12 (IRG) for the
carrying out of the annual work programme, and has formalized the participation of
representatives of the European Commission at all organizational levels.
During the past year, the ERG has also strengthened the commitment aiming to
ensure the maximum transparency of its activities and the participation by those
concerned. All the documents with external importance were submitted for consultation;
several themes of particular importance and, as per standard practice, the work
programme for the year 2006, were presented in public hearings, with great
participation of the market actors and the associations.
A systematic information on the activities carried out and the decisions reached
is ensured by the website (www.erg.eu.int) and the drafting of an annual Report. In
February 2006, the ERG published, on its website, an informational manual on the
Group’s organization and operation.
Among the numerous topics dealt with during the period of reference, worthy of
mention are the analysis of the regulatory and competitive prospects of the broadband
and Voice over Internet Protocol (VoIP) services; the updating of the Common Position
on remedies; the cost accounting and accounting separation that led, with AGCOM’s
coordination, to the drafting of the Common Position of September 2005 on the
European Commissions Recommendation 2005/698/EC.
Worthy of particular attention are the initiatives undertaken on the subject of
international roaming and, starting from the end of 2005, on the Review 2005 themes,
both bound to continue throughout 2006 and for the coming years.
With regard to international roaming, after a long job of analysis, coordinated by
AGCOM, the Common Position was achieved, in May 2005, providing the national
Authorities with guidelines for the analysis of the wholesale market (market no. 17
among those identified in the European Commission recommendation of 2003). The
ERG also dealt with the problems concerning the limited transparency of retail prices.
This activity, also, was coordinated by AGCOM and ended in December 2005, with the
issuing of a document that binds AGCOM to undertaking several initiatives to improve
11 Today, therefore, the ERG brings together 33 European regulatory Authorities in the electronic
communications sector; in addition to the Authorities of the 25 Member States, participating with “observer”
status are the Authorities of Norway, Switzerland, Iceland, Liechtenstein, Romania, Bulgaria, Turkey, and
Croatia.
12 The Independent Regulators Group is an informal discussion group in the electronic communications sector,
in which the member countries of the ERG participate.
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the information on the prices of international roaming calls (such as the creation of
national informational websites 13 and the verification of the possibility of imposing on
national operators the obligation of information by means of SMS text messages) and
provides for a monitoring activity, for 2006, on the actual implementation of the
measures suggested.
In general terms, the ERG has worked in close collaboration with the European
Commission in the drafting of a common strategy aiming to achieve a decrease in the
prices of end services. Furthermore, after the initiative undertaken by the Commission,
in February 2006 it took part in the two public consultation phases and is actively
following the regulatory procedure to define a regulation on the subject, pursuant to
Article 95 of the EU Treaty.
At the end of 2005, with the Call for Input made during the month of November,
the European Commission started the process of revising the European regulatory
framework on electronic communications networks and services, with the objective of
verifying their adequacy, compared to the evolution of the technological and market
context, and to identify any corrective measures, in terms of objectives, instruments,
and procedures. All the national Authorities participating in the ERG decided to draft a
joint decision, with the objective of enhancing the experience acquired at the national
level during the first phase of application of the European regulations. The ERG
reported the overall adequacy of the current framework for dealing with the regulatory
needs that will arise in the coming years, and the advisability of limiting the revision to
a few details, guaranteeing the stability of the regulatory context and protecting the
investment plans. Among the suggested adjustments are the following:
• the application of the principle of technological neutrality to the discipline of
new-generation networks;
• the streamlining of the European notification procedures;
• the introduction of regulatory instruments capable of dealing with the
competition problems resulting from the ongoing vertical and horizontal
integration processes;
• the achievement of a revision of the provisions concerning management of
the spectrum;
• the focusing of greater attention on consumer protection.
The Commission’s initiative is the first step of a process that is presumably
bound to end at the end of 2007; the reform of the European regulatory framework will
thus be a priority theme for the ERG, both for the current year and for 2007.
Lastly, worthy of mention is the appointment of AGCOM to the Presidency of
the ERG for the year 2007. This is an office of particular international prestige, which
13 On the model of that already created by the Commission in the month of October 2005. The URL of
Commission’s web page is: http://europa.eu.int/information_society/activities/roaming/index_en.htm.
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ears witness to the appreciation of AGCOM’s commitment at the international level,
and takes on specific importance in view of the discussion over the revision of the
regulatory framework for electronic communications, which should reach the decisionmaking
phase precisely in 2007.
Because of the responsibilities connected with the definition and execution of
the work programme and the resulting duties of coordination and monitoring of all the
thematic working and institutional representation groups, the ERG Presidency
(including the period of the Vice Presidency which, according to the “troika” system,
covers the semester preceding and that following the period of the presidency) also
entails a growing commitment by the personnel of AGCOM involved at the various
levels in the international activities, and implies an adequate preparation from the
organizational standpoint. For this purpose, AGCOM has already started up internal
organizational activities necessary for ensuring a profitable and efficient management of
its mandate.
Also with reference to the electronic communications sector, we must also
mention AGCOM’s participation in the various committees set up in the context of the
European regulatory framework, with the objective of aiding the European Commission
in dealing with specific matters. Also to be pointed out is a constant and qualified
participation, in coordination with the Ministry of Communications, for the matters of
its sphere of action, in the Communications Committee (COCOM) which, during the
period of reference, concentrated its work especially on the matters described below.
First of all, the COCOM was involved, pursuant to Article 22 of the framework
directive, in the procedure of verification and proposal of veto by the Commission, on
the market analyses notified by the Member States pursuant to Article 7, paragraph 4, of
the framework directive (so-called “second phase”).
The necessity to implement measures in favour of disabled users was expressed,
and a working subgroup (Incom) was set up to analyze the critical profiles regarding the
implementation of the Community regulations in the various Member States.
Currently being discussed is the decision plan on the reservation of a series of
numbers beginning with “116” for the harmonized supply of pan-European services of
public utility; moreover, the discussion over the experimentation, in the Member States,
of services supplied over the electrical power lines (powerline communications) and the
problems connected with interferences that occur in some of them, continues within the
COCOM.
As for the regulation of the Voice over Internet Protocol (VoIP), the delegations
taking part in the COCOM were called upon the express, by means of answers to a
questionnaire prepared by the European Commission, their position with regard to the
regulation of this electronic communication system.
Lastly, also within the framework of the COCOM, the European Commission
started up the discussion over the revision of the regulatory framework for electronic
communications. Within the COCOM, the discussion mainly developed with regard to
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the topics of universal service, network security, and the appeal procedures before
national jurisdictional bodies. All the national delegations shared the concern over the
network security situation, and they pointed out the advisability of defining precise
obligations for network and service providers. In consideration of the future entry into
effect of the reformed regulations, the discussion is still ongoing over the possible
expansion of the universal service contents to the broadband services and mobile
services.
Lastly, with regard to the possibility of harmonizing the appeal procedures
before national jurisdictional bodies, in order to avoid the risk of adoptions of national
decisions that conflict with the Community regulatory framework, the Commission
pointed out the particular delicacy of the subject, in consideration of the strong
peculiarities and regulatory differences that characterize the legal systems of the single
Member States.
The first results of the discussion registered, also within the COCOM, an
agreement of principle of the Member States on the advisability of streamlining the
market notification procedures under Article 7 of the framework directive and of
improving the conditions for managing the spectrum.
AGCOM’s institutional participation, coordinated with the Ministry of
Communications, continued in the national delegation with the Radio Spectrum
Committee, set up by European Parliament and Council decision no. 676/2002/EC of 7
March 2002 (the so-called “radio spectrum” decision). It should be remembered that the
Committee was set up for the electronic communication networks and services, in the
context of the European regulatory framework of 2002, with the objective of assisting
the Commission in the definition and adoption of the technical implementation
measures suitable for fostering a higher degree of harmonization in the spectrum
policies. The aim is to render this scarce resource available in a coordinated manner and
efficiently useable at the European level and, as a result, to contribute to the
development of the European internal market.
During the period of reference, the Committee continued to deal with the themes
concerning the harmonization of the spectrum for short range devices (SRD), the
Terrestrial Flight Telephone System (TFTS), the additional 2.6 GHZ band for mobile
systems, the use of radio frequency identification devices (RFID), and 2GHz mobile
satellite systems (MSS), with the adoption of the related CEPT reports and, in some
cases, the preparation of a decision draft. Also noteworthy are the adoption of
Community decisions concerning the harmonization of the use of the 5 GHz spectrum
for Radio-LAN and for the future use of the former ERMES band, the adoption of
mandates to the CEPT regarding the specifications for a Community information on
spectrum use and the compatibility studies for broadband wireless access (BWA), as
well as an initial consultation on the harmonized introduction of the Wireless Access
Policy for Electronic Communication Systems (WAPECS) platforms.
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Audiovisuals
As for the audiovisual sector, during the period of reference AGCOM continued
its activities within the framework of the High-Level Group of National Regulatory
Authorities and the Contact Committee (both bodies set up by the European
Commission for the purpose of ensuring a venue for institutional discussion with the
national sector Authorities of the Member States.), the Council of Europe’s Standing
Committee on Transfrontier Television, and the European Platform of Regulatory
Authorities (EPRA).
In all the international venues (in particular, in the High-Level Group and the
Contact Committee), the discussion was centred on the process of revision of the “TV
Without Frontiers” directive.
In July 2005, the European Commission called a public consultation on the
revision of the directive, at which AGCOM participated through the presentation of a
series of position documents concerning the sphere of application of the new directive,
the changing of the rules on inserting advertising in television line-ups, the protection of
minors, and concentration in the media sector.
The positions of the various stakeholders (industry, regulators, consumer
associations) were the subject of comparison in the international conference organized
by the European Commission in Liverpool in September 2005. After the Liverpool
conference, in December 2005 the Commission published a directive proposal
(currently being discussed by the European Parliament), the final approval of which is
expected by the end of 2007.
The aim of the new directive is to modernize the rules on audiovisual content,
taking into account the new technological diffusion context, characterized by a growing
and differentiated number of technologies and platforms.
The consultation process carried out up to today has, in the first place, revealed
the favourable trend toward creating a “neutral” regulatory context, consisting of rules
applicable to all content providers, regardless of the type of technological platform or
network used. Faced with an increasingly complex and fragmented technological and
market panorama, it also highlighted the need for a regulatory simplification; the
application of excessively detailed regulations and the carrying out of the monitoring
activities by the national Authorities could, in fact, prove to be both hardly practicable
and little in keeping with the principle of proportionality.
In this regard, the main novelties of the directive proposal concern the field of
application and the rules on inserting advertising. With regard to the first aspect, the
proposal adopts an approach based on a double regulatory level. A first set of basic
rules (concerning the protection of minors, prohibition of the incitement to hate and
violence, identification of the editorial responsibility for content transmitted, as well as
of the commercial and advertising content) applies to all the so-called “audiovisual
services”, or to the audiovisual services consisting of moving images, with or without
sound, transmitted over electronic communication networks for entertainment,
221

information, or education purposes. This definition excludes from the field of
application, in addition to radio type services, all services which, even though they
include moving images, do not have as their primary purpose the providing of
audiovisual content to the public (such as, for example, those that are part of a private
electronic correspondence). Included, on the other hand, are all the on-demand services,
i.e. those based on libraries of contents made available by an operator and requested
individually by the single user.
A more specific set of rules applies to the so-called “linear” type contents, i.e.
the actual programme line-ups organized by publishers in a preset sequence. These
services are subject, in addition to the basis set of rules, also to rules on advertising (as
regards quantity and quality) and those concerning the quotas reserved for European
works and independent productions.
The application or non-application of the directive’s rules to audiovisual content
will no longer depend on the diffusion medium (for example a telephone network, or
terrestrial television frequencies), but on the nature of the service. On-demand nonlinear
services will be subject to regulation, albeit lighter, while all linear content,
regardless of the technology with which it is transmitted, will be subject to the same
rules.
As for, on the other hand, the insertion of advertising, the directive text proposed
by the Commission introduces a strong simplification of the existing rules, of both a
quantitative and a qualitative nature.
In addition to the themes regarding the revision of the directive, the High-Level
Group continued to work on the possible instruments suitable for achieving an effective
coordination among the national audiovisual regulatory Authorities. In particular, the
Commission made the proposal of an electronic forum (devoted to the national
regulatory Authorities) for the exchange of information and creation of a database of
satellite and cable broadcasters authorized in the various Member States.
Among the topics dealt with by the Contact Committee, worthy of note is a case
of negative jurisdiction conflict that involved Italy, and resulting from the alleged
violation, by a controlled-access satellite broadcaster, of Article 22, paragraph, of the
“TV Without Frontiers” directive. The treatment of the above-said case brought to the
fore the difficulty in applying the connection criteria defined by the directive for
identifying the country with jurisdiction.
Furthermore, AGCOM continued, during the period of reference, to play a very
active role within the EPRA, the European Platform of Regulatory Authorities. During
the plenum meetings of Sarajevo (May 2005) and Budapest (October 2005), subjects
were discussed dealing with the evolution of new platforms for the diffusion of
audiovisual content and the connected regulatory challenges (for example, the access to
content problem), the new forms of advertising, the monitoring of programmes and
other themes of interest to the regulators in a context in which the convergence between
222

audiovisual and telecommunications is becoming more and more a market phenomenon
rather than a mere technological potential.
In particular, during the meeting in Budapest, during the discussion of the
subject of public service reform, AGCOM described the provisions of Law no. 112/04
concerning the accounting separation between public service activities and commercial
activities, and illustrated its own regulation concerning the separate accounting scheme
that RAI will have to implement (cf. paragraph no. 2.6).
As regards AGCOM’s participation in the activities of the Standing Committee
on Transfrontier Television, worthy of note is, in the first place, the favourable
orientation of the Committee towards the extension of the Convention’s sphere of
territorial application to countries that are not members of the Council of Europe. An
eloquent sign of this trend is the signing of the Convention by Bosnia Herzegovina and
Albania. In fact, the Committee feels that allowing non-members of the Council of
Europe to join the Convention constitutes an opportunity both for the countries
themselves and for the expansion of the geographic area of application of the
Convention, to which, as a result, shared minimum rules are applicable in the
audiovisual sector.
At the request of Bosnia Herzegovina, the Committee’s opinion on the freedom
of reception and retransmission of programmes by cable and on copyright protection
was also approved.
With regard to the re-examination of the Convention, on which, during the
period of reference, the discussion was mainly centred, the Committee intends to
proceed in line with the future directive, while leaving open the possibility that the
Convention may govern several aspects having to do with the subject of human rights,
and express an added value with respect to the “TV Without Frontiers” directive. This
added value could consist of the different sphere of territorial application of the two
regulatory instruments.
The discussion on the re-examination of the Convention specifically concerned
the questions regarding the right to information and cultural objectives (access to the
events of greatest importance, right to brief abstracts, media pluralism, right to
correction); the themes of advertising, sponsorships, and telesales; the questions
concerning the sphere of application of the Convention, jurisdiction, the freedom of
reception and retransmission, the commitments of the parties, single-target advertising,
and abuses violating the rights recognized by the Convention, as well as the protection
of minors and respect of human dignity.
Bilateral relations
The objective of ensuring for AGCOM a qualified international dimension is
also based on the strengthening and expansion of the network of relations with foreign
Authorities and institutions, through the formalization of bilateral agreements and
223

twinning projects; through the organization of meetings, exchanges of information, and
participation in the drafting of comparative reports.
From this standpoint, even during the past year, there has been a series of
activities for the purpose of implementing the pre-existing bilateral agreements and
entering into new one with several foreign regulatory Authorities (from both the
electronic communications sector and the audiovisual sector).
Following up the agreement signed in October 2004 with the Maltese
Communications Authority (MCA), during the period of reference workshop days were
organized in Rome and Malta, focusing on the main themes of electronic
communication regulation, such as regulatory accounting, the implementation of
regulatory instruments, the rented lines, and the regulation of wholesale and retail
prices.
In March 2005, AGCOM and the Egyptian telecommunications Authority
(NTRA) signed a joint statement in Cairo for a bilateral cooperation in the electronic
communications regulation field. The statement sets as an objective the cooperation in
the regulation of the electronic communications markets and in the promotion of
technological innovation within the framework of the Information and Communications
Technologies (ICT).
In September 2005, a common statement was signed with the Brazilian national
telecommunications agency (ANATEL), in the field of electronic communications
regulation. With this agreement a dialogue was undertaken with Brazil, and the
importance of this dialogue can be seen by the significant number of Italian operators in
the country.
AGCOM’s attention to strengthening the relations with the regulatory bodies of
the South American continent was also seen in the context of the network of relations
between IRG and REGULATEL (the association bringing together the circuit of Central
and South American Authorities) and, markedly, of the IRG-Regulatel Summit held in
Sintra on 11 and 12 November 2005.
In Rome in January 2006, AGCOM and the Moroccan national
telecommunications regulation agency (ANRT) signed a bilateral cooperation
agreement in the electronic communications sector within the framework of a common
plan of action for the development of the information society. AGCOM and the Agency
agree to collaborate and promote the regulation, innovation, and training of resources in
their particular sectors, through the carrying out of bilateral consultations and exchanges
of information, as well as the involvement of experts and the use of any other
instrument that may be considered useful. The spirit of this agreement is, among others,
that of intensifying the relations with the countries of the Mediterranean basin, also for
the purpose of harmonizing the consideration of the themes that lead more and more
often to comparisons among the various countries.
Lastly, we would like to point out that AGCOM has organized numerous
bilateral meetings with various foreign institutional contacts (of Authorities,
224

Administrations, diplomatic representatives), with the objective of exchanging
information, sharing experiences and viewpoints on the main regulatory themes in their
specific sectors. During the period of reference, there were, among others, meetings
with the delegations of the Chinese Ministry of Information and the Ministry of
Communications of the Republic of Korea, the Conseil Supérieur de l’Audiovisuel
(CSA – the French Authority in the audiovisual sector), the Swedish Ministerial
Commission for digital television, the United Kingdom’s Department of Trade and
Industry (DTI), and the British regulator OFCOM.
In particular, the bilateral meeting with OFCOM held on 20 th and 21 st April
2006, has a peculiar significance; the two Authorities (both represented at the highest
levels) have had the possibility to compare views on the main topics being discussed in
the electronic communications and audiovisual sectors (from spectrum management, to
the possible solutions to encourage investments in new technologies, to the instruments
suitable for ensuring non-discrimination among operators, to the regulatory revision
processes taking place at the European level).
The meeting also provided the opportunity to confirm the identical “converging
attitude” of the two Authorities and verify and stress its concrete advantages.
In July 2005, the work programme was launched for the twinning between
AGCOM and the Communications Authority of Bosnia Herzegovina (CRA), entirely
financed by the European Commission and entrusted to the Italian Authority after a
tender called by the European Commission in November 2004. The programme will end
in September 2006 and its purpose is to help AGCOM of Bosnia Herzegovina in
defining the regulatory framework for governing the television sector. The twinning
agreement between AGCOM, the CRA, and the European Commission was signed in
Sarajevo on 14 June 2005; in October a high-level CRA delegation were Italy’s guests
for a series of meetings with the Council and with AGCOM offices for the purpose of
defining the details of the cooperation between the two Authorities.
Afterwards, AGCOM organized, at the offices of the Bosnia Herzegovina
Communications Authority, numerous meetings with AGCOM’s executives and
functionaries, experts from other countries, university professors, and sector
representatives, to cooperate within the framework of the specific activities envisaged
by the work plan agreed upon by the two Authorities and the European Commission and
structured into three sections.
Starting from the assumption that an in-depth knowledge of the market of
reference is the preliminary condition for its effective regulation, the first objective set
was the carrying out of an analysis of the audiovisual and electronic communications
sector in Bosnia. The achievement of this objective led to the drafting of an extensive,
detailed report that is about to be published.
The second section of activity, currently in its conclusive stage, involved local
experts and functionaries of AGCOM for the drafting of three sets of regulations, one of
which concerning, in particular, the creation of a registry of communication operators,
225

through which the Bosnia Herzegovina Communications Authority may gather, each
year, useful information on the enterprises operating in the communications sector. This
instrument will enable the CRA to monitor the market developments and its actors,
allowing it to promptly adopt the most effective regulatory measures.
The third section envisaged by the work plan concerns the organization of
activities focusing on the transfer of skills that are important for the personnel of the
Bosnian Authority. For this purpose, AGCOM organized both an advanced course for
CRA functionaries, and study trips to Italy and meetings with the major sector
operators. During the course, particular attention was devoted to converging
technologies and digitalization processes, which will represent, in the coming years, the
sector’s main development engine.
Twinnings such as that illustrated between AGCOM and the CRA represent one
of the main instruments of foreign policy adopted by the European Union, and their
purpose is to prepare the participation of the Balkan countries in the stabilization and
association process, a phase during which the candidate countries negotiate their
possible entry into the Union.
The twinning activity with the Bosnia Herzegovina Communications Authority,
which was a major commitment for AGCOM’s structure, contributed materially to the
process of Bosnia’s joining the European Union, with the advantages it entails for the
stability of a region so close to our country. It also, thanks to the alignment of Bosnia’s
regulatory framework to those adopted in the major European countries, has taken on
considerable importance within the framework of the globalization process of the sector
of reference. Operators interested in expanding their activity in regions adjoining ours
will, in fact, find things easier dealing with a transparent, effective regulatory context
not too different from their national one.
3.2 RELATIONS WITH NATIONAL INSTITUTIONS
During 2005, the relations between AGCOM and the national institutions
continued, based as always on a mutual spirit of cooperation.
AGCOM held hearings before Parliament, its main institutional contact, and, in
particular, on 20 September President Corrado Calabrò reported to the 9 th Commission –
“Transport, Post Office, and Telecommunications” – on the main themes concerning
AGCOM’s activity.
AGCOM carried out consultation activities with the Parliamentary Commission
for the general policy and the supervision of the radio and television services for the
purpose of issuing the regulations, within their respective responsibilities, for governing
radio and television broadcasts on elections and referendums (cf. paragraph 2.14).
226

Around 60 inspection union documents were also examined, sent mainly by the
office of the Prime Minister and the Ministry of Communications for the purpose of
transmitting the elements of their responsibility.
The main topics dealt with concerned the protection of users with regard to the
activity carried out by telephone operators, protecting the competition among all the
parties operating in the communications market, the subscription fee to the telephone
service provided by Telecom Italia, telephone frauds, the manner of using the specialrate
numbering system, the supply of the ADSL service, the problems connected with
the diffusion of digital technology, protection of minors, television advertising and
telepromotion.
With reference to the functions carried out by Parliament and the Government,
AGCOM, systematically and periodically, considered and monitored all the themes of
interest to AGCOM through a specific internal news bulletin. The analysis of the
parliamentary activity was based on the examination of the legislative proposals and the
related procedure, as well as on the reading of the stenographic accounts and the
amendment proposals. The government activity was accurately considered, focusing
particular attention on the measures of particular interest for AGCOM, among which
were: “Amendments to Part II of the Constitution”, “Consolidation Act on radio and
television matters”, “Amendments to Article 10 of Law no. 112 of 3 May 2004, on the
protection of minors in television scheduling”, “Conversion into law of Decree-Law no.
273 of 30 December 2005, containing the definition and extension of deadlines, as well
as consequent urgent provisions”, “Provisions on the matter of combating the sexual
exploitation of children and pedophilic pornography also via the Internet” and, within
the framework of the definition of the relationship with the Community system, the
measure “Provisions for the fulfilment of obligations deriving from Italy’s belonging to
the European Communities – Community Law 2005” by initiative of the Government
(Ministry for Community Policies).
During the year 2005, AGCOM continued its collaboration relations with the
Italian Antitrust Authority. In accordance with the collaboration agreement entered into
by the two Authorities, meetings were held between the offices for the purpose of
dealing with topics of their respective responsibilities and, in particular, analysing in
depth the aspects connected with the procedures regarding electronic communication
market analyses and, specifically, the definition of the important markets and
assessments of the degree of competitiveness of the markets analysed. With regard to
these procedures, the consultation activities undertaken last year culminated with the
formal transmission to the Antitrust Authority of drafts of the measures prepared by
AGCOM.
The collaboration relations with the Antitrust Authority, during the period of
reference, also took the shape of AGCOM’s providing of opinions on the subject of
misleading advertising (cf. paragraph 2.7) and merger operations in the communications
sector, and on that of procedures for the abuse of dominant position concerning
operators of the communications sector. The activity of providing of the above-said
227

opinions often gave rise, within the respective spheres of action, to constructive
discussions between the offices of the two Authorities on the topics dealt with, with a
view to productive institutional collaboration.
The following table shows the references relating to the 76 opinions on the
merger operations provided by the Antitrust Authority during the period between May
2005 and April 2006.
Table 3.1. Opinions rendered to the Italian Antitrust Authority with regard to merger
operations in the communications sector (May 2005-April 2006)
Proc. no. Type Date of arrival
of request for
opinion
Companies involved Authority’s
resolution
C/6981 Acquisition 21/04/2005 RTI s.p.a. / HSE s.p.a. 162/05/CONS
C/7001 Acquisition 06/05/2005 Apax Europe V and Apax Europe VI / Hit
Entertainment PLC
C/7023 Acquisition of a corporate
branch
C/7024 Acquisition of exclusive
control
C/7007 Acquisition of a corporate
branch
C/7006 Acquisition of a corporate
branch
C/7012 Acquisition of a corporate
branch
C/7013 Acquisition of a corporate
branch
13/05/2005 Utet Diffusione s.r.l. / De Agostini Rizzoli
Periodici s.r.l.
13/05/2005 RCS Periodici s.p.a. / De Agostini Rizzoli
Periodici s.r.l.
171/05/CONS
187/05/CONS
188/05/CONS
13/05/2005 La 7 Televisioni s.p.a. / Canale 55 s.r.l. 189/05/CONS
13/05/2005 La 7 Televisioni s.p.a. / Teleonda
Gallipoli s.r.l.
13/05/2005 RTI s.p.a. / Radiotelevisione di Campione
s.p.a.
13/05/2005 RTI s.p.a. / Teleprogrammi – Fintrading –
Triveneta
190/05/CONS
191/05/CONS
192/05/CONS
C/7022 Acquisition 20/05/2005 Almavita s.p.a. / FINSIEL s.p.a. 170/05/CONS
C/7026 Acquisition of a corporate
branch
20/05/2005 Accenture Outsourcing s.r.l. / Albacom
s.r.l.
C/7028 Acquisition 20/05/2005 Fox International Channels Inc. / Creative
Networks International B.V.
C/7034 Acquisition of several
sound radio broadcasting
systems
223/05/CONS
222/05/CONS
27/05/2005 RCS Broadcast s.p.a. / Publiaudio s.r.l. 240/05/CONS
C/7044 Acquisition 27/05/2005 Interbanca Gestioni Investment SGR /
Frame
C/7046 Acquisition of several
sound radio broadcasting
systems
C/7059 Acquisition of several
sound radio broadcasting
systems
C/7067 Acquisition of several
sound radio broadcasting
06/06/2005 Monradio s.r.l. / Nipa s.r.l. – Radio Sud
Italia s.n.c. –
Radio club 103 s.r.l.
Teramo Radio City
09/06/2005 Monradio s.r.l. / Radio Immagine Uno
s.r.l. and Radio Tele Sondrio News s.r.l.
17/06/2005 Monradio s.r.l. / Nuova Radio Veronica
One s.r.l.
241/05/CONS
242/05/CONS
243/05/CONS
266/05/CONS
228

systems
C/7069 Acquisition of a corporate
branch
C/7081 Acquisition of several
sound radio broadcasting
systems
C/7098 Acquisition of a corporate
branch
C/7115 Acquisition of several
sound radio broadcasting
systems
C/7099 Acquisition of a corporate
branch
C/7101 Acquisition of a corporate
branch
C/7114 Acquisition of a corporate
branch
C/7100 Acquisition of a corporate
branch
C/7111 Acquisition of a corporate
branch
C/7112 Acquisition of a corporate
branch
C/7113 Acquisition of a corporate
branch
C/7096 Acquisition of joint
control
C/7142 Acquisition of several
sound radio broadcasting
systems
C/7157 Acquisition of exclusive
control
C/7183 Acquisition of a sound
radio broadcasting system
C/7179 Acquisition of exclusive
control
C/7226 Acquisition of a sound
radio broadcasting system
C/7219 Acquisition of exclusive
control of a corporate
branch
C/7254 Acquisition of a sound
radio broadcasting system
C/7255 Acquisition of eight
sound radio broadcasting
systems
C/7266 Acquisition of exclusive
control
17/06/2005 La 7 Televisioni s.p.a. / Elefante TV s.p.a.
– Delta TV s.r.l.
17/06/2005 Monradio s.r.l. / Radio Vigevano Ducale
City s.r.l. – Beta s.r.l.
01/07/2005 Rete A s.p.a. / Associazione Progetto
Spazio 2000
268/05/CONS
267/05/CONS
287/05/CONS
01/07/2005 Monradio s.r.l. / Rock FM s.r.l. 295/05/CONS
01/07/2005 Rete A s.p.a. / Teleregione Campania
s.p.a.
288/05/CONS
01/07/2005 Rete A s.p.a. / Quarto Canale s.r.l. 289/05/CONS
01/07/2005 RTI s.p.a. / Telenorba s.p.a. 291/05/CONS
01/07/2005 Rete A s.p.a. / Telecuneo s.r.l. 290/05/CONS
01/07/2005 RTI s.p.a. / Onda TV s.r.l. 292/05/CONS
01/07/2005 RTI s.p.a. / Fin Television s.r.l. 239/05/CONS
01/07/2005 RTI s.p.a. / Telemare s.rr.l. 294/05/CONS
01/07/2005 Weather Investments II s.a.r.l. / Wind
Telecomunicazioni s.p.a.
18/07/2005 Monradio / Tecnivest s.r.l. – Lattemiele
s.r.l. – Lattemiele Sardegna s.r.l. –
Lattemiele Lombardia s.r.l. – Lattemiele
Toscana s.r.l. – Idee Vincenti s.r.l.
26/07/2005 RCS Periodici s.p.a. / Abitare Segenta
s.p.a.
05/08/2005 Nuova Radio s.p.a. / Radio Dimensione
Suono s.p.a.
296/05/CONS
308/05/CONS
321/05/CONS
337/05/CONS
05/08/2005 Sfera Editore s.p.a. / Publibaby s.p.a. 336/05/CONS
26/08/2005 RCS Broadcast s.p.a. / Radio TV Shadow
s.r.l.
26/08/2005 Sparkle Telecom Italia s.p.a. / Tiscali
International Network France s.a.s.
16/09/2005 RCS Broadcast s.p.a. / Radio Grosseto
International s.r.l.
16/09/2005 General Electric Company / CNBC
Europe
03/10/2005 General Electric Company / CNBC
Europe
351/05/CONS
350/05/CONS
388/05/CONS
389/05/CONS
397/05/CONS
229

C/7275 Acquisition of nine sound
radio broadcasting
systems
C/7274 Acquisition of three
sound radio broadcasting
systems
C/7289 Acquisition of several
radio and television
broadcasting systems
C/7297 Acquisition of fifteen
radio and television
broadcasting systems
C/7298 Acquisition of a radio and
television broadcasting
system
C/7299 Acquisition of several
radio and television
broadcasting systems
C/7302 Acquisition of seven
sound radio broadcasting
systems
C/7314 Acquisition of a radio and
television broadcasting
system
C/7315 Acquisition of a radio and
television broadcasting
system
C/7316 Acquisition of a radio and
television broadcasting
system
C/7323 Acquisition of a sound
radio broadcasting system
C/7324 Acquisition of a sound
radio broadcasting system
C/7325 Acquisition of a sound
radio broadcasting system
C/7326 Acquisition of four sound
radio broadcasting
systems
C/7327 Acquisition of a sound
radio broadcasting system
C/7370 Acquisition of exclusive
control
C/7381 Acquisition of joint
control
C/7387 Acquisition of a sound
radio broadcasting system
C/7388 Acquisition of a sound
di b d i
11/10/2005 Monradio s.r.l. / Valle d’Aosta 101
Piccola Società Cooperativa a.r.l.
399/05/CONS
11/10/2005 Monradio s.r.l. / Rock FM s.r.l. 398/05/CONS
14/10/2005 RTI s.p.a. / TeleOrvieto s.r.l. – Teleradio
Center – Video Firenze s.r.l.
20/10/2005 La 7 Televisioni s.p.a. / Telecolor
International T.C.I. s.p.a.
20/10/2005 La 7 Televisioni s.p.a. / Società
Industriale Grafica Editoriale S.I.G.E.
s.p.a.
20/10/2005 La 7 Televisioni s.p.a. / Radio Televisione
Peloritana
20/10/2005 Monradio s.r.l / Radiant s.r.l. – Publiaudio
s.r.l.
422/05/CONS
424/05/CONS
426/05/CONS
425/05/CONS
423/05/CONS
28/10/2005 RTI s.p.a. / Telesolregina s.r.l. 436/05/CONS
28/10/2005 RTI s.p.a. / T3 Suedtirol s.r.l. 437/05/CONS
28/10/2005 RTI s.p.a. / Tevere TV s.r.l. 438/05/CONS
07/11/2005 RCS Broadcast s.p.a. / Radio TV Shadow
s.r.l.
439/05/CONS
07/11/2005 RCS Broadcast s.p.a. / Semir s.r.l. 440/05/CONS
07/11/2005 RCS Broadcast s.p.a. / RTL 102.500 Hit
Radio s.r.l.
07/11/2005 RCS Broadcast s.p.a. / Gruppo ADN Italia
s.r.l.
441/05/CONS
442/05/CONS
07/11/2005 RCS Broadcast s.p.a. / Radio Cava s.r.l. 443/05/CONS
01/12/2005 VSNL / Teleglobe International Holding
Ltd
475/05/CONS
02/12/2005 RCS Media Group s.p.a. / DADA s.p.a. 476/05/CONS
09/12/2005 RCS Broadcast s.p.a. / Radio Lagouno
s.r.l.
09/12/2005 RCS Broadcast s.p.a. / Mediatelecom
l
491/05/CONS
492/05/CONS
230

adio broadcasting system s.c.r.l.
C/7409 Acquisition of exclusive
control
C/7429 Acquisition of nine radio
and television
broadcasting systems
C/7417 Acquisition of joint
control
C/7432 Acquisition of a sound
radio broadcasting system
C/7461 Acquisition of a sound
radio broadcasting system
C/7466 Acquisition of several
sound radio broadcasting
systems
C/7459 Acquisition of a corporate
branch
C/7467 Acquisition of several
sound radio broadcasting
systems
C/7464 Acquisition of exclusive
control
C/7548 Acquisition of several
sound radio broadcasting
systems
C/7549 Acquisition of a corporate
branch
C/7546 Acquisition of several
sound radio broadcasting
systems
C/7493 Acquisition of a corporate
branch
C/7557 Acquisition of 22 radio
and television
broadcasting systems
C/7562 Acquisition of a radio and
television broadcasting
system
C/7579 Acquisition of a sound
radio broadcasting system
C/7574 Acquisition of ten radio
and television
broadcasting systems
C/7568 Acquisition of a radio and
television broadcasting
system
C/7596 Acquisition of a radio and
television broadcasting
16/12/2005 H3G s.p.a. / MIT s.p.a. 6/06/CONS
20/12/2005 3lettronica Industriale s.p.a. / Canale 10
s.r.l.
21/12/2005 Millennium Directory Holding and
Fininvest s.p.a. / Pagine Italia s.r.l.
21/12/2005 RCS Broadcast s.p.a. / L’Abaco
Elettronico s.r.l.
04/01/2006 RCS Broadcast s.p.a. / Radio TV Shadow
s.r.l.
7/06/CONS
8/06/CONS
9/06/CONS
67/06/CONS
04/01/2006 Nuova Radio s.p.a. / Radio Lagouno s.r.l. 66/06/CONS
04/01/2006 3lettronica Industriale s.p.a. / Elan s.r.l. 68/06/CONS
04/01/2006 Nuova Radio s.p.a. / RTL 102.500 Hit
Radio s.r.l.
65/06/CONS
13/01/2006 Albacom s.p.a. / Atlanet s.p.a. 64/06/CONS
27/02/2006 RCS Broadcast s.p.a. / Onda Azzurrra s.r.l. 125/06/CONS
27/02/2006 RCS Broadcast s.p.a. / Blu Media s.r.l. 126/06/CONS
27/02/2006 Monradio s.r.l. / Radio Arcobaleno s.r.l. 124/06/CONS
07/03/2006 RTI s.p.a. / Europa Tv s.p.a. 185/06/CONS
07/03/2006 3lettronica Industriale s.p.a. / Lombardia
Televisioni s.r.l.
186/06/CONS
10/03/2006 RTI s.p.a. / Telemolfetta s.r.l. 187/06/CONS
17/03/2006 RCS Broadcast s.p.a. / DS
Communications s.r.l.
17/03/2006 Telecom Italia Media Broadcasting s.r.l. /
Rete 7 s.p.a.
189/06/CONS
190/06/CONS
17/03/2006 RTI s.p.a. / Quadrifoglio TV s.r.l. 188/06/CONS
27/03/2006 RTI s.p.a. / Appennino TV s.r.l. 212/06/CONS
231

system
C/7597 Acquisition of a radio and
television broadcasting
system
27/03/2006 RTI s.p.a. / Erreuno TV s.r.l. 213/06/CONS
3.3 RELATIONS WITH THE MINISTRY OF COMMUNICATIONS
The collaboration with the Ministry of Communications, which the complexity
of the regulatory framework of the communications systems renders necessary and
advisable, continued throughout the past year, for the purpose of ensuring consistency
and continuity in the action of the two bodies, and also of allaying the uncertainties with
regard to consumers and users concerning the attribution of the specific and different
responsibilities.
A topic of major importance on which AGCOM worked with the Ministry was
that of the procedures for the assignment of the 900 MHz frequencies and their
subsequent reorganization, and the 1800 MHz frequencies, into the band freed by the
TACS services. With regard to this matter, as is well known, AGCOM will draft the
regulations, while the Ministry will issue the act of assignment.
Other sectors in which there was cooperation between AGCOM and the Ministry
were the drafting of the agreement on the guidelines for the content of the further
obligations of the general public radio and television service and the discussion of the
obligations of keeping separate accounts weighing on the public radio and television
service concessionaire. In this regard, AGCOM is finishing the procedures envisaged by
Article 47 of the Consolidation Act, with the appointment of the auditing company to
which to entrust the oversight of the separate accounts for the revenues deriving from
the subscription fees and the charges incurred by the concessionaire company, during
the previous calendar year, for the providing of the service (cf. paragraph 2.6). This
oversight, consistent with the provisions of the regulations, is preparatory for the
decision of the Ministry of Communications, which establishes by decree, in November
of each year, the amount of the subscription fee, necessary to cover the costs the
concessionaire company will presumably incur to fulfil the specific general public radio
and television service obligations.
The currently most significant project on which the Ministry and Authority
acting together is certainly that concerning the creation of the “frequency cadastre”, a
single, up-to-date, reliable data archive supporting the actions concerning television
frequencies. The synergy started will make it possible to keep the realization times
down, with a more rational use of the technical resources that both the Ministry and
AGCOM have at their disposal. It is advisable to create the frequency archive because it
is necessary to have an up-to-date instrument for being able to assess the efficient use of
the radio spectrum, identify redundant frequencies, and arrange the available resources
better, since they are in any case limited compared to the existing demand. The updating
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is even more appropriate in the current phase in which, with the start-up of the digital
terrestrial technology, due to the trading of frequencies, there has been a digitalization
of systems that were once analogue (cf. paragraph 2.6.).
Through he activities created by a joint working group, AGCOM and the
Ministry of Communications may be able to update, respectively, the National
Frequency Registry and the Registry of Communication Operators (R.O.C.), into which
the data of the National Frequency Cadastre will flow.
With regard to the supervision and penalty activity focusing on protecting
minors (cf. paragraph 2.9.), at the Ministry’s request AGCOM has designated its
representative on the TV and Minors Committee, which was recently renewed,
reconfirming Mr. Emilio Rossi and appointing Mr. Franco Angrisani as alternate
member.
AGCOM has also, at the request of the Ministry, provided opinions on the
occasion of the adoption of the new regulations for the organization and operation of the
Higher Institute of Communications and Information Technologies, on the basis of a
specific request from the Council of State, advisory section for regulatory acts, called
upon for an opinion in accordance with Art. 17 of Law no. 400 of 23 August 1988.
The relations with the Ministry of Communications have also required a precise
and constant coordination activity at the international level, in particular with regard to
the participation in the Committee for Communications and the national delegation on
the Radio Spectrum Committee (see paragraph 3.1.).
Lastly, AGCOM has participated, alongside the Ministry, in the international
frequency planning and coordination activities, within the framework of the Regional
Radio Communications Conference (RRC-06) called by the radio communication sector
of the ITU for revision of the 1961 Stockholm Plan (cf. paragraph 2.6.). AGCOM has
collaborated with the Ministry since 2001, especially with regard to the definition of the
so-called requirements, Italy’s requests for frequency resources to be submitted to the
ITU, and the preparation of and participation in bilateral meetings with neighbouring
countries for identifying, within the framework of such requirements, the frequencies
compatible with the above-said countries.
3.3 RELATIONS WITH REGIONAL COMMUNICATIONS
COMMITTEES
During the period of reference, the Regional Communications Committees
(Comitati regionali per le comunicazioni – Co.re.com.), defined by Law no. 247/97 as
“functionally bodies of AGCOM”, continued to have important functions in the
communications sector for protecting consumers and users.
Following the policy guidelines expressed by AGCOM in its resolutions no.
52/99 and no. 53/99, eighteen regions issued the laws setting up the Co.re.com.’s and
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appointed the chairpersons and members, to which should be added the Autonomous
Province of Bolzano (Table 3.2.). On the other hand, fourteen Co.re.com.’s entered into
the agreement with AGCOM for exercising the delegated functions on the territory (the
last agreement was signed by AGCOM and the Co.re.com. of Abruzzo); whereas the
Co.re.com.’s of Apulia, Molise, and Sicily, and the Provincial Committee of Bolzano
have already officially expressed their willingness to start the delegation process (Table
3.3.). For about half of the Co.re.com.’s that have received delegations, the activity is by
now in its third year, with a considerable growth of experience gained in the actual
exercise of the functions assigned to them.
The reports concerning the activity carried out in the year 2005 reveal a
considerable level of satisfaction, confirming the important results achieved in
performing the functions. Moreover, the same programmatic reports, regarding the
activity plans prepared for 2005, show a renewed commitment in continuing along the
route of improvement of local-level services and increase of the already significant
activities for which they are responsible.
A particular context among those defined in the function delegation system is
certainly that of the disputes between the telecommunications service operating body
and the users, with specific regard to the settlement attempt phase (cf. paragraph 2.11.).
In fact, in the cases where the user wishes to take legal action for the violation of a right,
he must present a settlement attempt before the Co.re.com. of his region, if it has
already signed the bilateral agreement with AGCOM for exercising the delegated
functions. From the time of the presentation of the obligatory settlement attempt, the
deadlines for taking legal action are suspended, and are resumed with the expiry of the
procedure’s conclusion, which must take place within 30 days from the presentation of
the settlement attempt.
The activities connected with the settlement attempts have led to the attainment
of results of great significance, and the case statistics produced in the exercise of this
important delegation, which offers users the possibility to safeguard their rights and
have a third-party judge free of charge, is by now noteworthy. In 2005, a total of 10,000
settlement cases between users and telecommunications operators were dealt with, with
an increase of more 150% over the previous year. For around 60%, a positive outcome
was registered, with a reaching of an agreement between the parties. With regard to this,
during the period of reference, various periodic meetings were held between AGCOM
and the Co.re.com.’s, during which the delegated Committees offered proposals and
suggestions for improving the procedures in effect. AGCOM then intervened with
resolution no. 137/06/CONS, to amend resolution no. 182/02/CONS concerning the
adoption of the regulations for solving disputes arising in the relations between
telecommunications bodies and users. It should be said that these suggestions will also
be considered within the framework of the process of revision of the above-said
regulations, which AGCOM is about to undertake for the purpose of rendering it more
appropriate for the needs determined by the new regulatory and operating arrangements.
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The delegation concerning the protection of minors has contributed to raising the
level of attention to the quality of the programming made by radio and television
broadcasters in the local context, stimulating the initiative of the Co.re.com.’s
themselves, within the framework of the promotion of conferences and discussions on
the relationship between minors and information media, or autonomous initiatives for
monitoring the quality of local television programming.
AGCOM will, in the short term, assign the Co.re.com.’s the delegation of the
monitoring over local radio and television programming, also for the purpose of
supervising compliance with the regulations on protecting minors and, generally
speaking, monitoring the quality of television programming in relation to the broadcasts
aired locally. Among the activities to be delegated to the Co.re.com.’s, of particular
significance and importance are those concerning the local level management of the
Communications Operators Registry (R.O.C.) and the activity supervising the
institutional advertising of public bodies, the latter responsibility already envisaged by
Law no, 112/2004 and by the Consolidation Act on radio and television.
On the occasion of the recent political election, various meetings were held
between the National Coordination body of the Co.re.com.’s and AGCOM, for the
purpose of creating the most useful operating procedures for rendering effective the
connection between central and local bodies with the task of applying the provisions of
Law no. 28/00 on political information and communication. “The Par Condicio Unit”
set up ad hoc by AGCOM, has had a constant and profitable relationship with the
Co.re.com.’s, both for promptly providing all the useful organizational communications,
and for allaying the numerous interpretational doubts and controversial cases that have
come up.
AGCOM then confirmed its economic commitment and support of the activity
delegated to the Co.re.com.’s, disbursing the grants envisaged for the year 2005 and
confirming a similar commitment for the year 2006 as well. This was in spite of the fact
that the Government grant to AGCOM was eliminated with the most recent finance act,
bearing witness to the attention and importance acknowledged to the Co.re.com.’s as
important structures on the territory for guaranteeing and protecting users and citizens.
The tables below illustrate, respectively, which Co.re.com.’s have already been
established, and the implementation status of the delegation process regarding the
functions assigned them.
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Table 3.2. Co.re.com.’s established
Region or Autonomous
Province
Regional law establishing the Co.re.com. Chairman
Umbria Reg. Law no. 3 of 11 January 2000 Luciano Moretti
Tuscany Reg. Law no. 10 of 1 February 2000, amended with Law
no. 80 of 28 December 2000
Omar Calabrese
Apulia Reg. Law no. 3 of 28 February 2000 Giuseppe Giacovazzo
Basilicata Reg. Law no. 20 of 27 March 2000 Mario Della Luna
Piedmont Reg. Law no. 1 of 7 January 2001 Pierumberto Ferrero
Calabria Reg. Law no. 2 of 22 January 2001 Umberto Giordano
Liguria Reg. Law no. 5 of 24 January 2001 Federico Filippo Oriana
Emilia Romagna Reg. Law no. 1 of 30 January 2001, amended with Law
no. 27 of 31 October 2002
Piero Vittorio Marvasi
Marches Reg. Law no. 8 of 27 March 2001 Gianni Marasca
Friuli Venezia Giulia Reg. Law no. 11 of 10 April 2001 Franco Del Campo
Lazio Reg. Law no. 19 of 3 August 2001 Angelo Gallippi
Veneto Reg. Law no. 18 of 10 August 2001 Mario Modulo
Abruzzo Reg. Law no. 45 of 24 August 2001 Tino Fortunato Di Sipio
Valle d’Aosta Reg. Law no. 26 of 4 September 2001 Fabio Truc
Campania Reg. Law no. 9 of 1 July 2002 Samuele Ciambrello
Bolzano Prov. Law no. 6 of 18 March 2002 Hansjörg Kucera
Sicily Co.re.com. established under Art. 101 of Finance Act no.
3 of 27 March 2002
Anna Alessi
Molise Reg. Law no. 18 of 26 August 2002 Tito Lastoria
Lombardy Reg. Law no. 20 of 28 October 2003 Maria Luisa Sangiorgio
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Table 3.3. Implementation of the delegation process
Co.re.com. Resolution Agreement signed Starting date
Calabria 402/03/CONS 17 December 2003 1 January 2004
Valle d’Aosta 402/03/CONS 17 December 2003 1 January 2004
Basilicata 402/03/CONS 18 December 2003 1 January 2004
Lazio 402/03/CONS 18 December 2003 1 January 2004
Friuli Venezia Giulia 402/03/CONS 29 January 2004 1 February 2004
Tuscany 402/03/CONS 29 January 2004 1 February 2004
Umbria 402/03/CONS 5 February 2004 1 March 2004
Emilia Romagna 402/03/CONS 5 February 2004 1 March 2004
Liguria 402/03/CONS 19 February 2004 1 March 2004
Piedmont 18/04/CONS 16 June 2004 1 July 2004
Marches 18/04/CONS 28 July 2004 1 September 2004
Veneto 18/04/CONS 23 December 2004 1 February 2005
Lombardi 95/05/CONS 3 March 2005 1 May 2005
Abruzzo 166/06/CONS to be defined to be defined
3.5 RELATIONS WITH THE UNIVERSITIES AND RESEARCH
ORGANIZATIONS
Last year, also, there were significant cultural and scientific exchanges with the
universities and primary research centres, typically governed by means of the Bilateral
Agreement instrument. These are important occasions, because they provide valuable
contributions to the process of knowledge and monitoring of the markets and topics
subject to AGCOM’s regulations, guaranteeing a contribution of skills and
professionalism useful for further qualifying the institutional activity.
During 2005, in particular, relations were carried on with the Office of the Prime
Minister – Higher Education School for the Public Administration (SSPA – Scuola
Superiore per la Pubblica Amministrazione) – Innovation Sector – to which, with a
special agreement, AGCOM has entrusted the development and implementation of a
project for the implementation of the Training Plan for its employees for the two-year
period 2005-2007 (cf. paragraph 4.1.).
Of particular importance was also the agreement signed, in the second half of
2005, by AGCOM and the National Statistics Institute, for conducting a methodological
study on the quality of the statistical information made known by the survey on
television viewing.
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Under the framework agreement signed in 2002 by AGCOM and the Federico II
University of Naples, it is specified that, in the year 2005, the study on the audiovisual
services project called “Area relating to broadband xDSL technology: VDSL and
SDSL. Analysis of performance, status of the standardization activity, and applications”
ended. The objective of the study was to analyse in depth the aspects connected with the
broadcast of broadband television services using xDSL technology. The result of the
study, analysing the network architecture and technologies used, analysed the different
characteristics of the various types of audiovisual services provided by the operators
currently on the market, and their future evolution from the standpoint of development
and technological innovation.
AGCOM also backed training programmes and contributed to the creation of
publications at universities and research institutes. This commitment took the form, in
particular, of the participation by the President and members at conferences and study
meetings.
Lastly, it should be mentioned that, during the year 2005, the collaboration
provided by AGCOM for the holding of master’s programmes and specialization
courses promoted by major Italian universities and concerning subjects of primary
interest for AGCOM.
3.6 THE NATIONAL USERS BOARD (CNU)
With resolution no. 5/06/CONS of 12 January 2006, AGCOM appointed the new
members of the National Users Board (CNU – Consiglio Nazionale degli Utenti): Luca
Borgomeo, Marina D’Amato, Remigio del Grosso, M. Micaela Fagiolo, Paolo Landi,
Piergiorgio Liverani, Monica Multari, Giovanni Pagano, Paolo Piccari, Marco
Ramadori, and Mario Russo. The decision was preceded by a complex work by the
offices and by a detailed discussion aiming to outline a configuration of the new CNU
that would be one of both qualified representativeness and high profile. The objective
can be said to have been fully achieved, considering the professional qualities of the
members and the representativeness of the associations that indicated them.
Article 1, paragraph 28, of Law no. 249 of 31 July 1997 assigns an important
duty to the CNU in that, made up of experts named by the associations representing the
telecommunications and radio/television service users, it expresses opinions and
formulates proposals – to AGCOM, the Parliament, the Government, and all public and
private organizations that have responsibilities in the field of electronic communications
– on matters concerning the safeguard of rights and the legitimate needs of the citizens
as active parties in the communication process, and it also promotes discussion
initiatives on these topics.
The CNU took office on 28 February 2006 and embarked on a profitable and
intense collaboration with AGCOM, which has always devoted much attention to
consumers’ problems and, during the past year, intensified the occasions for meeting
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with the associations of reference and set up, within the framework of the new
organization of its offices, a Directorate specifically devoted to consumer protection.
The first task for the CNU was, as envisaged by the regulation concerning the
designation, organization, and functioning of the body, the election of the Chairman and
Deputy Chairman. After the standard formalities, Luca Boromeo was named Chairman
and Remigio del Grosso Deputy Chairman.
The first sessions of the CNU were devoted to identifying the essential points of
a programme of activities for the period between March and April 2006, and to
summarizing operational themes and policy lines for a meeting with AGCOM, which
was held on 4 April 2006.
During the first period of its activity, the CNU appointed five regular members
and five alternate members to the Committee for the Application of the TV and Minors
Self-Regulation Code, and one member to the Committee for the Application of the
Telesales Self-Regulation Code. Furthermore, within the framework of the provisions of
Articles 2, 6, and 30 of the Service Contract between the Ministry of Communications
and Rai, the CNU appointed two members to the Commission on Quality, five members
to the Minors Commission, and one member to the Standing Consultative Body on
Social Planning.
The National Users Board passed a resolution for requesting the application of
Article 10, paragraph 9, of Law no. 112 of 3 May 2004, incorporated into the
Consolidation Act of Radio and Television, on the basis of which the Ministry of
Communications, in accordance with the Ministry of Education, University, and
Research, must conduct school campaigns to inform on the correct and informed use of
the television medium. With subsequent resolutions, the CNU intervened concerning
problems related to improper commercial practices employed in the telephony sector,
causing great troubles for users, also for the purpose of protecting adolescent users who,
using their cell phones, can access material not suitable for minors. Moreover, the CNU
expressed its disagreement over the creation of an Italian version of a satellite channel
entirely devoted to newborn babies.
Lastly, worthy of note is the fact that the CNU has set up its own “Minors, TV
and Internet” Board, and “Relations with Co.re.com.’s” Board.
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3.7 THE FINANCIAL POLICE AND POSTAL AND
COMMUNICATIONS POLICE
With reference to the regulatory framework and the memorandums of
understanding drafted in July 2002 and February 2003, the collaboration activity
between AGCOM, the Financial Police – through the Special Radio Broadcasting and
Publishing Unit – and the Postal and Communications Police confirmed, for 2005 also,
a relationship of productive and useful cooperation that made it possible, within their
respective spheres of action, to put into motion synergies and professional talents
capable of having a decisive affect on the quality of the actions and their effectiveness.
The collaboration activity with the Financial Police is based on the consolidated
experience in the economic-financial field, used mainly in the activities monitoring
compliance with the regulations in effect on dominant positions, advertising sales
ceilings, accounting separation obligations, and the obligations of communications
operators concerning the payment of the yearly concession fee, as well as the activity
monitoring copyright protection and the compliance with the principle of equal access
to political communication media. The Financial Police also played a fundamental role
within the framework of the supervision over the access to communication media and
over the compliance with the regulations protecting intellectual property rights.
The collaboration with the Postal and Communications Police mainly makes use
of the inspection and investigation activities made available for user protection.
During each election and referendum campaign period, the Special Unit of the
Financial Police (also interfacing with the provincial units of the corps) worked in close
collaboration with AGCOM’s offices for the purpose of acquiring magnetic media,
documentation, and material useful to AGCOM for carrying out its duties under the
laws in effect, of managing the reports and complaints involving local broadcasters and
publications, and also of making available, as needed, specialized personnel for
guaranteeing compliance with the “par condicio” (equal time) laws during the preelection
period.
Also in 2005, the Special Unit guaranteed the fulfilment of the duties envisaged
for the communications sector operators; in particular, with regard to the payment of the
annual fee owed AGCOM, as a source of self-financing calculated at 0.65 per thousand
of the revenues earned, the activity carried out by the Financial Police made it possible
to discover 875 defaulting operators who had to pay the above-said fee. As for the
ascertainment of the payment of the annual concession fees for the exercise of the
radio/television activity at the national and local levels, pursuant to Article 27,
paragraph 9, of Law no. 488 of 23 December 1999, the activity carried out by the
Special Unit of the Financial Police made it possible to complete the checks of public
and private television operators to see whether they had paid the fees for the years 2000
and 2001.
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During 2005, the Special Unit also made 27 checks of local broadcasters
nationwide, verifying the correctness of their fulfilment of the payment of the
government concession taxes and the regular keeping of the programme register, as well
as their compliance with the copyright laws.
On the subject of checking on the obligations concerning institutional
advertising and updating of the Communications Operators Registry, part of the Special
Unit personnel collaborate productively with AGCOM’s Inspection and Registry
Department.
This cooperation has contributed significantly to an increase in the efficiency of
the activities of the Communications Operators Registry.
As for the supervision activity regarding the simultaneous broadcast of
programmes, as stated in Article 21 of Law no. 223 of 1990, AGCOM delegated the
Special Unit of the Financial Police to verify, with regard to several radio circuits
operating in a syndication system, the compliance with the law’s provisions. The
activity, still ongoing, has been concluded for 26 broadcasters, and has made it possible
to find both criminal violations, for which 16 notifications of criminal offences were
sent to the competent judicial authority, and cases falling within the responsibilities of
the delegating Authority itself.
The Special Unit of the Financial Police carried out, also independently,
accesses to the premises of companies operating in the communications sector, for the
verification of alleged illegitimate behaviours reported by users. In short, the Unit
brought to conclusion the following:
a) 100 actions carried out on delegation from AGCOM, which produced the
discovery of 117 irregularities charged directly and reported to AGCOM,
and 10 notifications of criminal offences transmitted to the Public
Prosecutor’s office;
b) 29 delegated investigations received by the judicial Authority, of which 27
were concluded with the charging of irregularities reported to the Public
Prosecutor’s office;
c) 21 actions carried out under the General Command and other departments of
the corps, as well as on request from outside bodies;
d) 23 actions carried out on its own initiative, of which 14 concerning copyright
protection, 3 concerning telecommunications, and 6 conducted on the basis
of public safety laws, the criminal code, and violations committed on the
Internet.
With regard to copyright protection and the rights connected with its exercise, 60
actions were carried out with positive results, leading to the charge and release on bail
of 21 persons and the infliction of fines for a minimum assessed value of around
850,000.00 euro.
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Within the framework of these actions, 411,930 audio and video files, 10,473
miscellaneous magnetic media, 65 software programs, 21 personal computers, and other
IT equipment were seized.
In the telecommunications field, 15 actions were conducted with positive
outcomes, and 27 persons were charged and released on bail.
For the year 2005, also, the activity carried out by the Postal and
Communications Police for combating computer fraud and intervene in the context of
the repudiation of telephone traffic to special rate codes, with initiatives undertaken on
3,497 complaints filed. The Postal and Communications Police focused their particular
investigation activity in 2005 on this latter type of traffic and, in particular, that toward
international satellite numbers starting with the area code 00X. They also carried out
175 actions concerning the activation, by some telephone operators, of services not
requested, as well as 17 reports from AGCOM’s offices concerning complaints of
services not requested and fraudulent connections to porn sites on the Internet. In
addition, they monitored the numbers starting with 0878, finding various administrative
offences, which were reported, for their respective fields of responsibility, to AGCOM
and the Ministry of Communications. The monitoring activity carried out, on the basis
of reports coming from users and consumer associations, and from the Postal and
Communications Police, also concerned, in particular, specific services offered by
electronic communication operators and several television broadcasts which are
considered, due to their content, not suitable for minors. Lastly, also in 2005, the Postal
and Communications Police service forwarded 60 ordinary complaints concerning the
fields of the institutional activity.
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4. Governance structure
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4.1. GOVERNANCE STRUCTURE AND HUMAN RESOURCES
As provided for by law no. 249 of 31 July 1997, the President, the Commission for
infrastructures and networks, the Commission for services and products and the Council
are AGCOM’s governing bodies.
The Commissions are collegial bodies composed of the President and four
Commissioners, whereas the Council is composed of the President and all
Commissioners. The collegial bodies’ entire membership has been replaced following
the expiry of the previous term of office.
AGCOM’s President, Corrado Calabrò, was appointed by Italian President’s decree of 9
May 2005, as adopted upon proposal of the Deputy Prime Minister in agreement with
the Minister of Communications, upon advice of the relevant parliamentary committees,
issued under article 2 of law no. 481 of 14 November 1995 setting forth regulations
governing competition and public utilities and establishing public utility regulatory
authorities.
The Senate of the Republic and the Chamber of Deputy elect 4 Commissioners each. On
16 March 2005 the Senate’s assembly elected Commissioners Giancarlo Innocenzi and
Michele Lauria to the Commission for Services and Products, and Commissioners
Stefano Mannoni and Roberto Napoli to the Commission for Infrastructures and
Networks. On 16 March and on 5 May 2005 the Chamber of Deputies elected
Commissioners Gianluigi Magri and Sebastiano Sortino to the Commission for Services
and Products, and Commissioners Enzo Savarese and Nicola D’Angelo to the
Commission for Infrastructures and Networks.
AGCOM’s organizational structure was revised at the end of 2005. As announced by
the President Corrado Calabrò, in his introductory speech of the Annual Report to
Parliament last year, the effort of the new Council - which took office in Naples on 16
May 2005 - was to overcome the “weakness of the structure” which has to fulfil
overwhelming supervisory tasks in the enforcement of the regulatory framework passed
at EU level.
Therefore, after a first intervention aimed at adjusting the staff according to flexibility
criteria, the Council introduced a new organizational structure based on guiding
principles with a view to:
• Reduce AGCOM’s intervention times through a more effective action;
• Combine effectiveness with more rational resource allocation as well as a
significant cutting of operating costs;
• Regenerate the internal information circuit, by means of a more accurate and
computerized management of flows for the benefit of decision-making bodies,
with a noticeable advantage on the external image of AGCOM as a whole.
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Figure 4.1
4.1. AGCOM’s governing bodies and the President’s secretariat
Commission for services
and products (CSP)
Giancarlo Innocenzi Botti
Commissioner
Michele Lauria
Commissioner
Sebastiano Sortino
Commissioner
Gianluigi Magri
Commissioner
Source: processing by AGCOM
President
Corrado Calabrò
Council
Authority President’s
Cabinet
Commission for
infrastructures and
networks (CIR)
Stefano Mannoni
Commissioner
Nicola D’Angelo
Commissioner
Roberto Napoli
Commissioner
Enzo Savarese
Commissioner
Guido Stazi
Head of the President’s
Cabinet
The reorganization process, passed with resolution no. 460/05/CONS and then
with resolution no. 506/05/CONS, which modified the structure and functioning
regulations, redesigned AGCOM’s operational machinery, moving focus from tasks to
subjects. In this way, also based on an assessment resulting from the experience gained
over the first seven years of activity of AGCOM, it was decided to favour an increased
focusing on AGCOM’s institutional mission by integrating the tasks related to
preliminary investigations and proceedings, as aforesaid, by subjects and by paying
renewed attention to the needs related to consumers’ protection 14 , strengthening the
14 With the new organization the Department for consumers’ protection has been set up in AGCOM headquarters in Naples.
245

coordination among structures and concentrating human resources in core business
activities. Furthermore, at AGCOM’s headquarters in Naples, the Department for
studies, research and training was set up.
This Department aims at creating a research centre of excellence in cooperation
with Institutions and Bodies on the territory. AGCOM based this renewal process on the
most interesting European experiences, which include also AGCOM itself, as model of
authority of convergence. Being one of the organizations characterized by specific
know-how and significant innovation, AGCOM deemed as necessary the introduction
of increased flexibility in its structure, so as to be ready and more suitable for facing the
challenges entailed by the convergence among networks and contents. The new
organizational structure, which came into effect on 1 st February 2006, is still in its
implementation stage. Subsequent steps include the identification of second-level
offices, the attribution of responsibilities to executives, based on selective criteria of
skills and merit, the creation of a new competition season to fill the vacant managerial
and executive positions, yet taking into account rigidity as well as limits in terms of
numbers related to the staff structure.
AGCOM’s organizational structure is composed of the General Secretariat and
of first- and second-level governance units. The first-level governance units are
Departments and Services.
The General Secretary heads the administrative structure, He plays the role of
legal and institutional “junction” connecting AGCOM’s structure to the policy and
guidance tasks of President and Council, to whom he reports the smooth running and
the efficiency of the structures. In order to favour the connection with the structure, for
the benefit of the activities of the President and Commissioners, an Authority’s
President Secretariat has been set, which works in synergy with the General Secretariat.
246

President’s Cabinet
Guido Stazi
DEPT.
Electronic
communication
networks and services
Vincenzo Lobianco
Audiovisual contents
and media
Laura Aria
Market analysis and
competition
Antonio Perrucci
Consumer protection
Emilia Visco*
Training, research
and study
Antonio Perrucci
(pro tem)
Figure 4.2. AGCOM’s structure
GENERAL SECRETARIAT
Roberto Viola
Deputy General Secretary
Antonio Perrucci
Source: processing by AGCOM | * Federico Flaviano as from 24 July 2006.
SERV.
Legal
Nicola Gaviano
Supervisory and
registry
Nicola Sansalone
Politics
communication
and conflict of interest
resolution
LauraAria(protem)
Human resources
Nicola Sansalone
(pro tem)
Regional Committees
for communications
Board Secretariat
External relations
and Press
247

From the HR management viewpoint, through the mobility procedures laid down
in article 3, paragraph 67, of law no. 350 of 24 December 2003 (the 2004 finance law),
on 1 st June 2005, those members of staff who were seconded and/or temporary at
AGCOM, complying with requirements provided for by the law itself became
permanent. Open competitions launched last year are still in progress, whereas new
competitive examinations (aimed also at the strengthening of AGCOM’s headquarters
in Naples) have been announced for the fixed-term recruitment of: no. 1 statisticalinformation
technologist, for the activities to be carried out for the project to define
techniques to collect data on ratings; no. 1 unit for the position of Administration and
Personnel Service Head; no. 1 unit for the position of Head of the Department for
Studies, Research and Training.
Pursuant to provision, among others, of the above-mentioned regulation as set
forth in article 3, paragraph 67 of law no. 350 of 24 December 2003, AGCOM adjusted
the rules regulating fixed-term contract staff to the provisions included in legislative
decree no. 368 of 6 September 2001.
Considering the current staff structure of 320 employees, in addition to 15
assigned by law no. 215 of 20 July 2004 concerning conflict of interests, as at 31 May
2006, AGCOM’s total staff in office amounted to 254 units, to be divided according to
their qualification and type of contractual relationship (Table 4.1.).
Table 4.1 AGCOM’s Staff as at 31 May 2006
Staff as at 31 May 2006
Grade Permanent (Ruolo) Seconded (Comando)/
Temporarily moved from
other civil service bodies
Fixed-term contract Total
Managers 13 6 2 21
Officials 97 2 28 127
Operating staff 59 8 18 85
Executive staff 19 1 1 21
Total staff 254
Source: processing by AGCOM
The process under way to reorganize offices and recruiting procedures requires
the planning of the policies for human resources management, in order to carry out the
rational allocation of the resources themselves according to criteria based on skills and
merit.
In the reference period, in order to guarantee the continuous growth of the
existing skills, AGCOM intensified its training programmes and refresher courses,
allocating more resources and entering into an agreement with the Scuola Superiore
della Pubblica Amministrazione (a national cultural and training school for senior civil
servants) to start specific programmes and a three-year plan of training, which chime in
with the needs of staff and AGCOM’s strategic goals. In the arrangement of such Plan,
contents and teaching techniques have been identified which will be adopted in line
248

with the institutional actions to spread the training methods of the Observatory of the
Scuola Superiore della Pubblica Amministrazione.
In particular, within the training path adopted, permanent training activities have
been identified and also specific teaching initiatives have been devised and organized
based on the various areas of responsibility.
Fruitful contacts have been established with other civil service training
institutions and schools (such as, for instance, Formez and Istituto Guglielmo
Tagliacarne), as well as with Universities in order to launch joint efforts through special
agreements within the scope of general policy agreements already entered or to be
entered into (cf. paragraph 3.5.).
4.2. THE ETHICAL COMMITTEE
The Ethical Committee is in charge of ascertaining the correct application and
ensuring the compliance with ethical and behavioural standards set forth in the Ethical
Code. It is composed of three members of well-known independence and moral
reliability chosen by AGCOM’s Council.
The Ethical Committee is chaired by professor Leopoldo Elia, President
Emeritus of the Constitutional Court, and members are Pasquale De Lise, former
President of a Section of the Council of State and currently President of the Regional
Administrative Court of Lazio, and Riccardo Chieppa, President Emeritus of the
Constitutional Court.
The Ethical Committee carries out its responsible activity of assessment,
inspection, in-depth analysis and proposal, both as a matter of course, and upon request
of AGCOM’s Council. It identifies criteria and expresses approaches aimed at settling
specific practical issues.
The Committee performs its duties according to provisions set forth in the
Ethical Code (resolution no. 18/98 and amendments thereto) which applies to
employees and consultants. With reference to AGCOM’s members, duties of the Ethical
Committee are carried out by AGCOM’s Council itself upon the Committee’s advice, in
compliance with provisions set forth in resolution no. 17/04/CONS.
In the year under examination, as it has already occurred in the past, the
Committee answered promptly and exhaustively to the questions put by AGCOM’s
President and Council, providing assessments and proposals in the sensitive field of
behavioural ethics.
Figure 4.3. The Ethical Committee
Ethical
Committee
Source: processing by AGCOM
4.3. SYSTEM OF CONTROLS
Leopoldo Elia Pasquale De
Lise
Riccardo Chieppa
249

AGCOM’s system of controls is defined by the provisions set forth by AGCOM
itself concerning administrative and financial management and organization. Such
regulations provide the presence of two bodies, the Guarantee Committee and the
Internal Control Service, which are in charge of supervising administrative and
accounting fairness and strategic control.
Both bodies carry out their activities in full autonomy and report to AGCOM’s
President and Council. The recent reorganization project of AGCOM, in force from 1 st
February 2006, placed (cf. paragraph 4.1.) the technical-administrative support to the
controlling Committees within the President's Secretariat of AGCOM. In this way,
placing emphasis, on the one hand, on the preferred relations with this important
managing body and, on the other hand, on the strategic value of controls to verify the
attainment of the managerial goals. In this regard, AGCOM decided to introduce
specific auditing duties for the General Secretariat, in order to promote an integrated
internal system for the planning and control activities, without prejudice to controls
carried out by the relevant bodies and, in the end, by the National Audit Office (Corte
dei Conti), which has the control on AGCOM’s report by law.
The Guarantee Committee is in charge of guaranteeing the accuracy of the
accounting and administrative management of AGCOM and of supervising the
compliance with the relevant laws and regulations, as well as of auditing the periodical
reports and the annual balance sheet (cf. paragraph 4.4.).
By regulation amendment, adopted with its resolution no. 374/05/CONS,
AGCOM deemed as appropriate to strengthen the supervisory role of the Guarantee
Committee, by introducing the issuance of relevant opinion also on the budget structure
in addition to that on the balance sheet to be approved by AGCOM’s Council. During
2005, even if the term of office of the previous Authority’s Council expired, to which
also that of the members of the Committee itself is directly connected, the Committee
carried out its activity of control, deemed as appropriate to prepare its report on the
financial statement for the benefit of the new Council.
The Guarantee Committee - set up with no. 713/00/CONS, in compliance with
article 42 of the administrative and accounting management regulations - was reestablished
with resolution no. 375/05/CONS, by the new Authority’s Council on 16
September 2005. AGCOM’s Council, considering the high institutional profile held,
the well-known independence and moral reliability of its members, decided to renew in
the office, as President and Member respectively, Francesco Sernia and Marcello
Taddeucci, and recognizing her professionalism, independence and reliability to appoint
for the first time, Germana Panzironi, to replace the resigning Luigi Fiorentino.
The Internal Control Service was reinstalled with resolution no. 165/06/CONS,
since its previous term of office expired in January 2006.
The establishment of such Service complies with article 25 of the co-ordinated
text of the structure and functioning regulation in force. This Service is entrusted with
the “the task of verifying, by comparative audits of costs and returns, both the
250

achievement of the objectives set by current regulations and by AGCOM’s resolutions,
and the accurate and cost-effective management of public resources, as well as the
fairness and success of the administrative activities carried out by AGCOM’s
departments, services, and offices” (article 25, paragraph 1).
The Internal Control Service works by monitoring the operational items with a
view to find any critical situation, informing accordingly AGCOM’s Council and
suggesting, at the same time, corrective measures.
The monitoring and analysis activity carried out by the Internal Control Service
is contained in the periodical reports to the President and the Council, which are the
starting point to express joint observations.
During 2005, the activity of the Internal Control Service was influenced by the
long vacant period preceding the appointment of the new Authority’s Council.
In spite of this, the Service - which had also a member resigning prior to the end
of the term of office - carried out two Reports (the Sixth and the Seventh Reports) and
met the Council to define the guidelines of its activity.
The Internal Control Service is currently composed of three external members:
Luciano Hinna, as President, Raffaele Maria De Lipsis and Massimo Lasalvia, as
members. Their term of office lasts two years and can be renewed.
Figure 4.4. The Guarantee Committee
Guarantee Francesco Marcello
Committee Sernia Taddeucci
Source: processing by AGCOM
Figure 4.5. Internal control service
Germana
Panzironi
Internal Control Luciano Raffaele Maria
Service Hinna De Lipsis
Source: processing by AGCOM
4.4. THE BUDGET
Massimo
Lasalvia
The 2006 budget was approved with resolution no. 112/06/CONS of 2 March
2006 and contains the strategic policies expressed by AGCOM’s Council with the
approval of the 2006/2008 long-term planning (resolution no. 111/06/CONS of 2 March
2006). The budget has an authorizing nature, is prepared yearly for the subsequent year
and is drawn up based on cash and accrual basis, in compliance with the principles of
unity, annuity, totality and integrity, truthfulness, fairness, accounts balancing and
251

disclosure, which in addition to the publication in the Official Journal is ensured also by
the publication in AGCOM’s website.
The 2006 budget analysis shows a financial approach based on balancing, in that
the total income amount - net of clearing entries - equal to € 59,656,000.00 is matched
by a total expenditure for the same amount, thus guaranteeing a balanced 2006 budget.
Compared to the previous year, among the resources, it is to be pointed out a
reduction of the annual subsidy of € 16,539,391.00 by law no. 266 of 23 December
2005 (2006 finance act) – Table C (Official Journal of the Italian Republic no. 302 of 29
December 2005 – ordinary supplement no. 211/L) which set such subsidy at €
3,920,000.00.
It is interesting to point out that the State subsidy produces a return on taxes, to
the charge of AGCOM, to be paid to the Campania region for IRAP (Regional Tax on
Industrial Activity) equal to € 2,241,618.00; therefore, the subsidy - net of such fiscal
charges - totals € 1,678,382.00.
As regards AGCOM’s own resources – as pursuant to provisions laid down by
article 6, paragraph 1, b) of law no. 249/1997 and by article 2, paragraph 38, b), of law
no. 481/1995, as amended by article 1, paragraph 66, of law no. 266/2005 which set the
amount of the contribution at 1.5 per thousand of the revenues of the operators of the
communications market – a total amount of € 54,433,000.00 is envisaged. The
corresponding resolution no. 110/06/CONS of 2 March 2006 on “Amount and method
of payment of the contribution due to the Communications Regulatory Authority, for
2006” was approved with Decree of the Presidency of the Council of Ministers (DPCM)
of 14 march 2006 and published in the Official Journal of the Italian Republic – General
series no. 74 of 29 March 2006.
As far as expenditure is concerned, the 2006 budget shows a number of changes
compared to that of 2005.
Resources allocated to management responsibility centres, in terms of budget,
are equal to € 47,169,288.00, net of the provisions for contingencies and
charges for Institutional Bodies, totalling about 91% of current expenditure.
In particular, about 74% of current expenditure, equal to € 38,333,288.00 is
managed by the Administration and Personnel Service, having primary responsibility in
the coverage of general indirect costs for the operation of AGCOM, including costs for
staff. About 17% of current expenditure, equal to a € 8,836,000.00 budget endowment,
was allocated to other responsibility centres.
As regards the system of controls, the Guarantee Committee is in charge of
ensuring the accuracy of the administrative and accounting management, as laid down
in articles 27 and 42 of the accounting and administrative management regulations (cf.
paragraph 4.3.).
The 2005 final statement was approved by Council resolution. It included the
assessment of the state subsidy equal to € 21,921,391.00 (inclusive of the contribution
252

for conflict of interests), € 22,330,338.99 of AGCOM’s own resources
resulting from the Economy and Finance Minister’s decree of 22 July 2005 (published
in the Official Journal of the Italian Republic no. 174 of 28 July 2005), the contribution
as pursuant to article 6 of the regulations concerning the satellite broadcasting of
television programmes (resolution of 18 December 2002, published in the Official
Journal of the Italian Republic no. 9 of 13 January 2003) as well as interest receivable
accrued on the bank current account at AGCOM’s treasurer institution (San Paolo
Banco di Napoli).
4.5. DOCUMENTATION SERVICES
AGCOM’s activity concerning study and documentation is developed into two
main directions: the first focuses on the promotion and the execution of activities of
analysis, study and documentation on the regulatory, market and technological
scenarios related to electronic communication, also in order to carry out and circulate
scientific publications, the second is based on the typical management services of the
scientific library and on the provision of related services.
As far as the first aspect is concerned, AGCOM ensures the update of the
collection of rules and regulations relating to its institutional action taking into account
the different regulatory resources concerning international, EU and domestic laws. Such
activity requires the involvement of internal specialist resources as well as of
international, EU and domestic institutions with which ongoing and fruitful cooperation
has been established (cf. paragraphs 3.1. and 3.2.). In this regard, AGCOM’s internal
staff prepared papers aiming at the acquisition of information and documents
concerning electronic communication, market and technological developments. In
particular, fact-finding inquiries were conducted on technologies and architectures for
the provision of mobility TV services and on the systems currently in use for the
collection of data concerning television ratings.
Furthermore, through the development of the update activity from the legal,
technological, economic-financial, social and statistic viewpoint, AGCOM aims at
contributing to the setting up of a centre for specialized research – in line with the
European scenario – which can both satisfy experts and researchers of the sector and
strengthen the cooperation with documentation and study departments of government
and parliamentary institutions in addition to the various private and public research
centres and institutions. Therefore, in 2005 as well, valuable wealth of documents
relating to electronic communications was made available by AGCOM to experts and
researchers which are highly qualified and demanding users.
During the first quarter of 2006, a number of internal workshops for in-depth
study and refresher courses were held for Members of the Council, executives working
in the technical secretariats of Commissioners and Heads, with a view to focus attention
on some of the most topical and strategic aspects of AGCOM’s activity and scope. In
detail, the following workshops were carried out: “The review of the new regulatory
framework concerning electronic communications: the UK and the EU experience” and
“Complementarity and replaceability of advertising channels: empirical aspects and
253

methodological profiles”. Moreover, activities were started for the carrying out of other
workshops, such as “The impact of liberalization and privatization processes in the
market of fixed telecommunications”, “ Achievements and failures of the
communications regulator: an assessment of the 1997-2004 period”, “Presences, copresences
and uses of Digital TV platforms in Italian households”, “The development of
on-demand services in Italy. Pay-per-view and Video-on-demand: market outlook and
scenario” and “The Italian market of TV production: regulation and market dynamics”.
The workshop on “Transparency of the international roaming” and the
presentation of the book on “Economics of knowledge. Theoretical profiles and
empirical evidence”, edited by AGCOM within a cooperation project with the
publishing firm, Il Mulino, are other occasions of study and exchange of opinions on
topics related to AGCOM’s institutional activity. In particular, such editorial initiative
contributes to the scientific and economic debate on topics related to information and
knowledge.
Moreover, in the reference period, AGCOM contributed to the publication of the
book “The guarantees in the local communications system: delegation to Co.re.com”,
carried out within the framework of the agreement between Formez and the Department
of Public Administration of the Presidency of the Council of Ministers known as
“Institutional innovation - project of federalism scenarios”.
The second aspect of the activity, that is the management of the scientific
library, is carried out mainly offering information support to internal staff, by making
available, through various search options, the knowledge of topics concerning the
electronic communications sector and related topics.
Through a “virtual showcase” carried out in AGCOM’s intranet, it is possible to
search by author, subject, title, kind, key words or full-text so as to access lists of titles
and have a homogeneous interface of the searched topic. Moreover, it is possible to
view the complete index card with information on the location of the works in order to
find them. The system can double the service using both digital and paper consultation.
The monitoring of such IT system includes the carrying out of a number of
activities related to systems such as the regular update of the library collection,
information as to the acquisition of new books and periodicals, the implementation of
the incremental back-up of data and statistics on accesses to the service, as well as the
participation in initiatives for the update of the tools related to the management of ITbased
libraries.
In order to offer an environment which is responsive as much as possible to the
research activity in the regulatory, economic ad legal fields, a “participated” system to
improve the system has been adopted. As a matter of fact, in addition to assistance to
users, proposals for change and/or integrations given by the users of the network service
are accepted so as to improve the quality of the service itself.
The library collection is presently made up of 3,500 books (with approximately a
5% increase compared to last year’s collection), of 220 current periodicals specialized
254

in the economic, legal, sociological and communications engineering fields, and of 30
on-line data banks made available to internal users through their work stations
connected to the intranet. Moreover, the library also includes a relevant number of
general reference books such as encyclopaedias, dictionaries and indexes and it has also
a collection of the Official Journal of the Italian Republic (Gazzetta Ufficiale) and of the
Official Journal of the European Union since 1986 to date.
In 2005 the growing trend – with an increase approximately by 30% compared
to the previous year – of the consultation of documents included in the electronic
catalogue was confirmed.
4.6. OFFICIAL INFORMATION AND THE WEBSITE
AGCOM ensures the divulgence of its decisions and the spreading of the
measures adopted by means of the publication in the Official Journal of the Italian
Republic, the Official Bulletin and the website. The Reports to the Parliament are made
in compliance with the law and are made public every time this is not in conflict with
regulations and expediency reasons. Through the publication in the Official Journal of
the Italian Republic, AGCOM can ensure wide knowledge of its most significant
decisions under the profile of the external relevance, thus guaranteeing the availability
of information to a large number of stakeholders, citizens, operators and consumers
which are interested in the activity carried out by AGCOM.
The complex activity of relation with the press and mass media in general is
carried out by the President and the Members with the aim to strengthen the image of
Authority, through shared communication methods, which can safeguard the
institutional prestige and the authoritativeness of AGCOM itself as well as of its
members.
Following the instructions of the President and the Council press releases are
issued which are used to inform as to the most important decisions adopted by AGCOM
disclosing briefly the main contents and press conferences are organized to enable
information operators to have all the necessary information to carry out their work, thus
ensuring the utmost transparency in the sensitive and significant decisions adopted by
AGCOM.
Over the year, expenditure concerning the “external” presence of AGCOM has
been strongly reduced, limiting its participation in occasions of exhibition which serve
as “showcase” with stakeholders, consumers and other institutions.
AGCOM’s website (www.agcom.it) is a tool which is essential to ensure
administrative transparency and to give communication and information to the outside.
Though AGCOM’s website was still in its original version, it is still the
reference point for operators and users, that visit the website on a daily basis, with a
very high number of accesses, also to download the most interesting pages, concerning
the most recent documents as well as the mostly used forms.
255

During the year, activity was focused on the implementation of the section
devoted to the “operators and users” counter, with regard in particular to the pages for
“directory assistance services” and “international roaming services”. Specific attention
has been given to the implementation of the pages concerning “political communication
and equality of access to media”, considering also the various electoral periods which
characterized the first six months of 2006 and to the rationalization of the section
relating to the instructions to enter the Register of Communications Operators.
The online guide “Using mobile phones abroad: international roaming services”
is to be mentioned, This activity is part of the initiatives of the European Commission
and of the European Regulators Group (ERG) with the aim to strengthen transparency
as tool for consumer protection and competition promotion (cf. paragraph 3.1.).
To that end, a specific section has been included in AGCOM’s website
containing information and useful suggestions to help consumers to cope in the complex
world of international roaming pricing. The guide does not aim at suggesting which is
the best offer on the market, but to put at consumers’ disposal useful information in
order for them to be able to choose easily and with more awareness among the various
offers available on the market.
AGCOM is about to complete the activities to re-launch the new website which
will be available upon completion of the works to create an innovative technical
platform, which will make possible a more efficient management of the internal
document flow, thanks also to the adoption of more detailed and targeted classification
methods. The new institutional site will make use of a dynamic search engine and of a
simple but engaging graphic interface in addition to a coherent and updated database.
In the arrangement of the contents and of the graphic aspect of the new website,
the English section will gain considerable importance considering also the forthcoming
international commitments of AGCOM which will lead the European Regulators Group
(ERG) (cf. paragraph 3.1.).
AGCOM’S ACTIVITY
Summary of the main measures (16 May 2005 - 31 May 2006)
Council CIR CSP Tot
MARKET ANALYSES 15 15
NETWORKS AND SERVICES OF ELECTRONIC
COMMUNICATIONS
66
Plans and procedures for frequency allotment 1
Interconnection and access (including regulatory accounting)
Universal service and users’ rights
4 2
Universal service financing 2
Numbering plans and its integration (numbering for public utilities, VoIP,
etc.)
5
256

Measures to guarantee rights of end users (Number portability, SIM lock,
directory assistance)
7
Disputes between telecommunications operators and users 37
Disputes between telecommunications operators 7
Fixed-to-mobile integration 1
MULTIMEDIA AND AUDIOVISUAL CONTENTS 33
Obligations of the public radio and television service 2
Guarantees of pluralism 8
Digital technology television 7
Conflict of interests 1
Equality of access to media 9
Advertising 3
Disputes between operators to access the satellite platform 3
SANCTION-RELATED ACTIVITES to protect competition, consumers
and minors
343
Radio and television public service concessionaire
Warning obligations resolution no. 136/05/CONS, Incompatibility
4
Protection of minors 32
Equal treatment (par condicio)
Right to rectification
115
Obligations of communication (Public bodies and Register of
Communications Operators (ROC))
40
Advertising 29
Polls 3
Charters of Services 6
Protection of the rights of users and subscribers 24 5 1
Obligations concerning the programming of concessionaires 11 52
Obligations of electronic communications operators (CPS, Numbering,
etc.)
ACTIVITY RELATED TO AUTHORIZATIONS
21
Transfers of property of radio and television enterprises 52
Transfer of radio and television enterprises 21
Broadcasting of satellite programmes 57
Departure from rules concerning “European shares” 2
RELATIONS WITH CORECOM (Regional Committees for
Communications)
1
Process to grant delegation 1
REGULATIONS AND PROCEDURES
ADVICE OF THE ITALIAN ANTITRUST AUTHORITY (AGCM)
6 2 8
Merging operations 89
Measures concerning deceptive advertising
ORGANIZATION
173
Bodies and regulations of organization 8
TOTAL 563 65 240 868
257

ACRONYMS
ADSL .............Asymmetric Digital Subscriber Line
AIE .............Associazione Italiana Editori (Italian Publishers Association)
AIIP .............Associazione Italiana Internet Provider (Italian Internet Services
Providers
Association)
AMPS .............Advanced Mobile Phone System
ANR .............Autorità Nazionali di Regolamentazione (National Regulatory
Authorities)
API .............Application Programme Interface
ARPU .............Average Revenue Per User
ATM .............Asynchronous Transfer Mode
A2P .............Application to Person
AVI .............Automated Vehicle Identification
B2B .............Business to Business
B2C .............Business to Consumer
BWA .............Broadband Wireless Access
CAS .............Conditional Access System
CD .............Circuiti Dedicati (dedicated circuits)
CDMA.............Code Division Multiple Access
CDMA/EV-DO...Code Division Multiple Access/EVolution Data Optimized
CEIR .............Central Equipment Identity Register
CEPT .............Conference of European Post and Telecommunications
CIR .............Commissione per le Infrastrutture e le Reti (Commission for
Infrastructures and
Networks)
CLEC .............Competitive Local Exchange Carrier
CNCU .............Consiglio Nazionale dei Consumatori e degli Utenti (The National
Council of Users
and Consumers)
CNU .............Consiglio Nazionale degli Utenti (The National Council of Users)
COCOM..........Comitato per le Comunicazioni (Communications Committee)
Co.re.com........Comitati regionali per le comunicazioni (regional communications
committees)
CPS .............Carrier Pre Selection
CS .............Carrier Selection
CSP .............Commissione per i Servizi e i Prodotti (Commission for Services and
Products)
CVP .............Canale Virtuale Permanente (Permanent Virtual Channel)
DAB .............Digital Audio Broadcasting
DAB IP............Digital Audio Broadcasting Internet Protocol
DBS .............Direct Broadcasting Satellite
DCS .............Digital Cellular System
258

DECT .............Digital Enhanced Cordless Telecommunication
DGC .............Dipartimento Garanzie e Contenzioso (Guarantees and Disputes
Department)
DICAM............Dipartimento Contenuti Audiovisivi e Multimediali (Audiovisual and
Multimedia
Content Department)
DMB .............Digital Multimedia Broadcasting
DRM .............Digital Right Management
DSL .............Digital Subscriber Line
DTH .............Direct To Home
DTS .............Dispositivo Telefonico per Sordomuti (Telephone Device for deaf
people and for
people with speech disabilities)
DTT .............Digital Terrestrial Television
DVB .............Digital Video Broadcasting
DVBH ............Digital Video Broadcasting Handheld
DVBH +..........Digital Video Broadcasting Handheld Satellite
DVB-T ............Digital Video Broadcasting Terrestrial
DVD .............Digital Video Disc
DVR .............Digital Video Recorder
EAB .............Equal Access Board
EDGE .............Enhanced Data rates for Gsm Evolution
ENISA.............European Network and Information Security Agency
EPG .............Electronic Programme Guide
EPRA .............European Platform of Regulatory Authorities
ERG .............European Regulators Group
ETSI .............European Telecommunications Standards Institute
EV-DO.............Evolution – Data Only
FCC .............Federal Communication Commission
FDMA .............Frequency Division Multiple Access
FIEG .............Federazione Italiana Editori Giornali (Italian Newspaper Publishers
Association)
FIMI .............Federazione dell’Industria Musicale Italiana (Italian Federation of the
Phonographic Industry)
FLO .............Forward Link Only
FPM .............Federazione contro la Pirateria Musicale (Italian Anti-piracy Federation)
FRIACO..........Flat Rate Internet Access Call Origination
FTTB .............Fiber To The Building
FTTC .............Fiber To The Curb
FTTH .............Fiber To The Home
FTTN .............Fiber To The Node
FTTP .............Fiber To The Premises
FWA .............Fixed Wireless Access
GPRS .............General Packet Radio System
259

GSHDSL ........Global Standard High-Bit-Rate Digital Subscriber Line
GSM .............Groupe Spéciale Mobile (Special Mobile Group)
HD .............High Definition
HDTV .............High Definition Television
HSDPA............High Speed Downlink Packet Access
HSUPA............High Speed Uplink Packet Access
HTML .............Hyper Text Markup Language
ICCP .............Committee for Information, Computer and Communications Policy
ICT .............Information and Communications Technologies
IDEN .............Integrated Dispatch Enhanced Network
IES .............Informativa Economica di Sistema (Media and Communications
Industry Database)
IFPI .............International Federation of the Phonographic Industry
ILEC .............Independent Local Exchange Carrier
IMEI .............International Mobile Equipment Identity
IMP .............Interactive Media Player
IMS .............Internet Multimedia Subsystem
IOT .............InterOperator Tariff
IP .............Internet Protocol
IP TV .............Internet Protocol Television
IP VPN............Internet Protocol Virtual Private Network
IRG .............Independent Regulators Group
ISDN .............Integrated Services Digital Network
ISM .............Instrumental, Scientific and Medical
ISO .............International Standard Organisation
ISP .............Internet Service Provider
ITU .............International Telecommunication Union
IVR .............Interactive Voice Response
JIC .............Joint Industry Committees
LAN .............Local Area Network
LLU .............Local Loop Unbundling
M2M .............Machine To Machine
MAN .............Metropolitan Area Network
MBMS.............Multimedia Broadcasting Multicast Service
MDA .............Movement Detection and Alert
MDNS .............Managed Data Network Services
MLDS .............Local Multipoint Distribution Services
MHP .............Multimedia Home Platform
MMDS.............Multichannel Multipoint Distribution System
MMS .............Multimedia Message Services
MNP .............Mobile Number Portability
MP3 .............MPEG layer format 3
MPEG .............Motion Pictures Experts Group
MSS .............Mobile Satellite System
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MVAS .............Mobile Value Added Services
MVNO.............Mobile Virtual Network Operator
NGN .............New Generation Network
NIC .............Network Interface Card
NUTS .............Nomenclatura Unità Territoriali Statistiche (Statistical Territorial Areas
Nomenclature)
NVoD .............Near Video on Demand
OLO .............Other Licensed Operator
ONP .............Open Network Provision
OSI .............Open System Interconnection
PAMR .............Public Access Mobile Radio
PAN .............Personal Area Network
PATS .............Publicly Available Telephone Service
PBX .............Private Branch Exchange
PCM .............Pulse Code Modulation
PCMCIA.........Personal Computer Memory Card International Association
PDA .............Personal Digital Assistant
PIN .............Personal Identification Number
PLC .............Power Line Communication
PMR .............Private Mobile Radio
PNAF............. Piano Nazionale di Assegnazione delle Frequenze (National Frequency
Allocation Plan)
PNRF .............Piano Nazionale di Ripartizione delle Frequenze (National Frequency
Apportionment Plan)
PoP .............Point of Presence
POTS .............Plain Old Telephone Service
PPV .............Pay Per View
PSTN .............Public Switched Telephone Network
P2P .............Peer to Peer
PVR .............Personal Video Recording
RBOC .............Regional Bell Operating Companies
RDS .............Radio Data System
RFID .............Radio Frequency IDentification
R-LAN.............Radio Local Area Network
ROC .............Registro degli Operatori di Comunicazione (Register of
Communications Operators)
SA .............Shared Access
S-DMB............Satellite-Digital Multimedia Broadcasting
SDSL .............Symmetric Digital Subscriber Line
SGD .............Stadio di Gruppo Distrettuale (District Switch)
SGT .............Stadio di Gruppo di Transito (Transit Switch)
SGU .............Stadio di Gruppo Urbano (Local Switch)
SIAE............. Società Italiana Autori ed Editori (Italian Authors and Publishers
Association)
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SIM .............Subscriber Identity Module
SIP .............Session Initiation Protocol
SL .............Stadio di Linea (Line Stage)
SLA .............Service Level Agreement
SMS .............Short Message Service
SOHO .............Small Office Home Office
SRD .............Short Range Device
SRR .............Short Range Radar
STS .............Supplementary Telephony Services
SVoD .............Subscription Video on Demand
TACS .............Total Access Communication System
TCAM .............Telecommunication Conformity Assessment and Market surveillance
T-DMB............Terrestrial Digital Multimedia Broadcasting
TFTS .............Terrestrial Flight Telephone System
TISP .............Telecommunication and Information Services Policies (OECD)
3G .............Third Generation
UGS .............Unità per la Gestione delle Segnalazioni (Complaint Management Unit)
ULL .............Unbundling del Local Loop (Local Loop Unbundling)
UMA .............Unlicensed Mobile Access
UMTS .............Universal Mobile Telecommunications System
UNE .............Unbundled Network Elements
UNE-P.............Unbundled Network Elements – Platform
UPA .............Utenti Pubblicità Associati (Advertising Users Association)
Urp .............Ufficio relazioni con il pubblico (Public Relations Office)
USIM .............Umts Subscriber Identity Module
UWB .............Ultra Wide Band
VAS .............Value Added Services
VDSL .............Very high data rate Digital Subscriber Line
VHS .............Video Home System
VoBB .............Voice over Broadband
VoD .............Video on Demand
VoIP .............Voice over Internet Protocol
VPN .............Virtual Private Network
WAN .............Wide Area Network
WAP .............Wireless Application Protocol
WAPEC...........Wireless Access Policy for Electronic Communication System
WASP .............Wireless Access Service Provider
Wi-Fi .............Wireless Fidelity
Wi-max............Worldwide interoperability for microwave access
WISP .............Wireless Internet Service Provider
WLAN.............Wireless Local Area Network
WLL .............Wireless Local Loop
WLR .............Wholesale Line Rental
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