Connected Research

Union policy research in the 21st century

Italy broadband chief outlines high-speed plans

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In his annual address of the Italian parliament, Corrado Calabro, the head of AGCOM, Italy’s telecoms regulatory authority, has outlined further detail of how the mechanics of his plan for a new company to fund the development of a nationwide high-speed broadband network in Italy would operate.

According to totaltele.com (registration required; limited viewing time), drawing on the reports of international newswires, the new company would include the main telecoms operators as ‘a strong nucleus of industrial partners’ and could also build on public funds given the €1.47bn that the Italian government has already promised to provide to overcome the digital divide between rural and urban areas. The aim of the new company, a kind of public-private partnership, would be to replace throughout Italy the copper network with one built entirely on fibre, with network build and switchover to the new network proceeding on a region-by-region basis. AGCOM would retain responsibility for tariff setting so as to ensure a return for the operators involved, where the approach would be to mimic how existing utilities operate networks.

The proposal did not state whether the new company would include the copper network of Telecom Italia, the incumbent former monopoly operator, as part of its asset base. Spinning off Telecom Italia’s network has been the aim of Forza Italia, the dominant party in Italy’s centre-right ruling coalition; the management of Telecom Italia has resisted such a plan although it is open to ideas for shared investment projects, provided that the solutions proposed deliver it a suitable return on investment.

The alternatives for Telecom Italia would appear to be to fold its existing network, and its €6.7bn planned investment, into the new company with the aim of building a single high-speed broadband network throughout Italy to which all operators in the new company had access, benefitting on the same terms; or going it alone, building out its own, competing, network to that of AGCOM’s new company (and, presumably, to an earlier timescale) – yet still facing regulatory control over the tariffs it can charge both retail consumers and other operators seeking wholesale access.

For me, the preferred solution would be the one that looks a little like the nationalisation of a common asset (however called), and which avoids the waste of resources and environmental implications inherent in building out rival networks whose ability to compete against each other is anyway likely to be circumvented by regulatory controls on tariffs…

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Written by Calvin

08/07/2009 at 4:45 pm

Posted in Telecoms regulation

Tagged with ,

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