Communications Regulatory Authority

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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