In telecommunications, the consolidation and development of competition are not antithetical but the rules of the game must be clear. As for the network, a collaboration between the operators is certainly desirable to use common resources but "the model of the single and neutral network does not exist in any country, even if Great Britain is approaching" and, finally, on the future of the coveted Metroweb "the the most important condition is to guarantee access to its network infrastructure in a non-discriminatory manner”. These are the ideas of Alberto Pera, now a lawyer in one of the major Italian firms and director of Enel but with a past as secretary general of the Antitrust Authority which has always led him to pay particular attention to telecommunications, a crucial sector for the development of the country but also very complex to regulate. Here is the interview he gave to FIRSTonline about it.
FIRSTonline – The Government plan for the development of ultra-broadband, the recent investigation by the Antitrust and Agcom, the signs of consolidation of the sector and the race to conquer Metroweb between Telecom Italia and Vodafone reveal that Italian telecommunications are once again faced with a crucial passage but one question dominates the others: are the aggregations and mergers between companies or their assets compatible with the protection and development of competition?
PERA – Truly, at the European level, and in the perspective of further development of the internal communications market, a process of consolidation of the operators is seen as desirable, and indeed inevitable, in order to achieve economies of scale and range, and to have operators competing on a continental level. This process will probably also have repercussions in Italy: However, the factors that determine competition at the national level can be different, in particular there can be problems of access to the infrastructure or risks of collusive conduct, and therefore attention should always be paid to the effects of specific competitive operations.
FIRSTonline – The Antitrust-Agcom investigation into the telecommunications has focused its attention on the location of the fixed network with three main considerations: the ideal structure of the network would be that in the hands of an independent entity that does not carry out service activities, a particular supervision in the event that the incumbent acquires new assets and, finally, the encouragement of forms of joint ventures between operators for the development of the network, considered the most probable and realistic among the various possible scenarios. What do you think?
PEAR – The investigation starts from an assumption about the evolution of fiber technology which in truth, if generalized, appears at least questionable: not only in Italy, but in Europe the idea prevails that copper-based technology still offers considerable possibility. It is in the light of this different consideration that the proposals must be examined. Abstractly, it can be thought that the ideal set-up would be that of an independent subject. However, communications technology is constantly evolving, and the incentive provided by the competition may be appropriate. In fact, the model of the single and neutral network does not exist in any country, even if Great Britain comes close. Collaboration between several operators in order to use common resources (for example cable ducts) is certainly desirable. If the idea is that of a broader and more structural collaboration, a kind of cooperative network society, it is an extremely complex project which risks having an impact on downstream competition. Assuming that the economic conditions exist, and that the operators are available, it should be designed with great skill to give rise to an absolute separation between the market area and the infrastructural services area and it would certainly be subjected to very careful scrutiny by the Antitrust Authorities .
FIRSTonline – The race for Metroweb, which has the largest fiber optic network in Europe centered on Milan, is the case that holds the most attention and on which the future structure of the sector and the spaces for competition may depend: under what conditions should the operation to reconcile network development and competition take place?
PEAR – It seems to me that, whoever the buyer is, the most important condition is to guarantee access to the Metroweb infrastructure in a non-discriminatory manner. And certainly if the Antitrust Authority were to deal with it, this will be one of the topics. Of course, other issues can arise in relation to the articulation of the market and the diffusion of the fiber.
FIRSTonline – Is the tender decisive in the sale of Metroweb? Is the price enough to decide the buyer of Metroweb or are the competitive profiles decisive? What guarantees should Telecom, which is currently the strongest player on the network, give and what guarantees should Vodafone provide?
PEAR - If F2i has an interest in selling, it is right to sell at the best price. Rather, the regulatory framework should be clear and potential buyers should be aware of what constraints they might have to bear, so as to be able to calibrate their offers. In particular, as mentioned, with regard to guaranteeing access, which concerns both Vodafone and Telecom. However, it is clear that in the case of Telecom there is one more unknown factor, represented by the assessment of the Antitrust regarding the effects on the various markets which, as already anticipated in the Inquiry, could be problematic: Telecom could find itself having to give further concessions to get a green light for the acquisition.
FIRSTonline – Is it realistic to think that the sale of Metroweb could pave the way for a network company made up of all the operators who would contribute their assets and in which the Cdp would lead the way and act as guarantor? Can the Government and the Authorities play a role in this field?
PEAR – I have already mentioned that it would be a very complex operation also from the point of view of the structure in order to prevent collusive outcomes. But in the first place there is the economic problem of valuing the assets contributed by the various companies, and in particular those contributed by Telecom. And this seems to me to be a very difficult problem to solve in the current situation. And I wouldn't expect government intervention on the matter.
FIRSTonline – Some say that there are too many mobile telephone operators in Italy and that the fact that some of them have never reached balanced budgets signals forms of dumping which has benefited consumers but distorted the market: you who what do you think?
PEAR – It is the essence of competition that one tries to assert itself on the market, and it would not seem appropriate to speak of dumping. Ultimately the degree of competition in the mobile phone market is a highly positive fact. And it has allowed the various operators to propose themselves with different characteristics, for example as regards the quality of the service, and also of economic offers.
FIRSTonline – What do you think of the Government's broadband plan?
PEAR – It seems to me that the main problem of the sector is the growth in demand. Except in limited cases, there is no great demand for advanced IT services that require ultra-broadband and therefore a vast fiber network. And this is serious as it is reflected in an industrial structure and a non-advanced service offer (I am thinking, for example, of the tourism sector, in an age in which tourist services are increasingly marketed on the web). The Government should draw up an organic plan for public administration and school services and help develop an IT culture among businesses and citizens. Greater demand would make investment more attractive.
