Italy

[IT] Agcom Board Presents an Assessment of the 2005-2012 Term

IRIS 2012-6:1/24

Giorgio Greppi

Autorità per le garanzie nelle comunicazioni (AGCOM)

On 2 May 2012, the board of the Autorità per le garanzie nelle comunicazioni (the Italian Communications Authority - Agcom) presented an assessment of its term of office from 2005 to 2012, showing how during this period the overall landscape of the communications sector has changed drastically: in 2005 the most successful company in regard to capitalization was Exxon corporation, in 2012 it is Apple; in 2005 social networks were at a start-up phase, today they reach over one billion subscribers. Internet has enhanced the circulation of products and services and the number of companies registered on the National Communications Register managed by Agcom has increased from twelve thousand in 2005 to sixteen thousand in 2012.

The television sector has been deeply affected by Agcom action. After 30 years of administrative lack of clarity, the National Frequencies Register has been completed, followed by a rational allocation plan for the transition from analogue to digital television. In addition, part of the digital dividend that accrued from the switchover process has been allocated to the telecommunication services with a contest that generated EUR 4 billion. The Italian TV market has faced a slow process of renewal, the share of the six main channels edited by Rai and Mediaset has decreased from 85% in 2005 to 67% with the corresponding growth of Sky, La7 and thematic channels, and 90% of the economic resources are mainly shared by Rai (28.5%), Mediaset (30.9%) and Sky (29.3).

Agcom’s monitoring of television content has been continuous and has been followed by many interventions such as moral persuasion, warnings and sanctions that over the seven-year term has amounted to over EUR 2.2 million, all confirmed by the administrative courts. Agcom has also reported to Parliament about the need for an update of the regulatory framework, specifically in the field of political and electoral messages and called for a reform of public service broadcasting activity.

Despite the current Italian phase of economic phase stagnation, the telecommunications sector has maintained a 6% average annual growth rate, and overall turnover has reached 3.2% of national GDP (2.7% in 2005). The retail market quota of the incumbent operator has faced a 20% decrease from 2005, with a final cost decrease for end consumers of over 33%, while the final cost of essential services such as transport, energy and water has been increased. The fixed TLC (Telecommunication Line Provider) overall turnover has increased from 20.3 billion euro in 2005 to 23.5 billion euro in 2012.

Agcom has completed two market analysis cycles following EC Commission Recommendations nos. 2003/311 and 2007/879, revisiting the relationships between the incumbent operator and other competitors. Furthermore, by the creation of a structure called “Open Access” within Telecom Italia, Agcom has finally realized the organic separation between the incumbent operator’s access network and services, which achieved a fair level playing field for all players. Open Access is considered as a benchmark in the EU. Regarding price regulation, Agcom has introduced new bottom-up models also based on forward-looking long-run incremental costs. From 2005 to 2012 there has been a 15% decrease in fixed retail final prices.

The mobile sector has reached 52% coverage of the TLC market, while the number of users with mobile internet connection has increased by 16 times since 2005. There is no mobile operator with a market share above 35%. Mobile data traffic has exceeded voice traffic due to a 48% penetration rate by smartphones (EU average rate 39%).

The alternative dispute resolution system has been implemented on a regional basis with more than 246 thousand disputes solved, 72% of these decisions favoured consumers. Mobile number portability transfers have reached 30 million since 2005, with a speedy procedure reduced from 10 days to 1 day. Over the seven-year term the sanctions adopted for consumer protection amounted to 27 million euro. National broadband penetration is still below the EU average rate (lines/citizens ratio is 21 versus 27 EU average), with a related lower penetration of connected families, e-commerce transactions and ICT exports. TLC operators are investing in the acquisition of mobile frequencies for LTE technology. Agcom has provided a system of regulation for VoIP services, distinguishing between the unmanaged VoIP and the managed VoIP for which Agcom has also introduced specific obligations.

Regarding copyright protection over electronic communication networks, Agcom has carried out two public consultations and asked for a legislative initiative to update the existing framework.

Following an Agcom report to the government and to Parliament, legislative decree no. 201/2011 appointed Agcom as the national regulator for the postal sector.

Agcom has also maintained a strong relationship with Parliament with more than 40 hearings, in addition to the yearly reports, and has played a leading role in the international field, assuming the Presidency of the European regulatory group (formerly ERG, now changed to BEREC), the Euro-Mediterranean network of Regulators (EMERG) and the Radio spectrum policy group (RSPG).