Judgment;Summary — ECLI:EU:C:2024:762
Date: 2024-09-19
Language of the case: Italian
Court formation: First Chamber
Subject matter: Telecommunications
Procedure: Reference for a preliminary ruling
Origin: Italy

Summary C-273/23 – 1 
Case C-273/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
26 April 2023 
Referring court:  
Consiglio di Stato (Italy) 
Date of the decision to refer: 
18 April 2023 
Appellants: 
Autorità per le Garanzie nelle Comunicazioni 
Ministero dello Sviluppo economico 
Telecom Italia SpA 
Respondents: 
Telecom Italia SpA 
Vodafone Italia SpA 
Fastweb SpA 
Autorità per le Garanzie nelle Comunicazioni 
Tiscali Italia SpA 
BT Italia SpA 
  
Subject matter of the main proceedings 
Appeal before the Consiglio di Stato (Council of State, Italy) against two 
judgments by which the Tribunale amministrativo regionale per il Lazio (Regional 
Administrative Court, Lazio, Italy; ‘the TAR Lazio’) declared unlawful some 
decisions of the Autorità italiana per le Garanzie nelle Comunicazioni 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-273/23 
 
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(Communications Regulatory Authority, Italy; ‘AGCOM’). Those decisions had 
held that the burden relating to the provision of the universal service in the 
telephony sector on the operator responsible for providing that service was unfair 
and, consequently, had required mobile telephone operators to contribute to that 
burden. 
Subject matter and legal basis of the request 
The reference for a preliminary ruling concerns the compatibility with Directive 
97/33 and Directive 2002/22, and with the EU law principles of transparency, 
least market distortion, non-discrimination and proportionality, of national 
legislation which requires mobile telephone operators to contribute to the burden 
relating to the provision of universal service in the telephony sector on the 
operator responsible for providing that service, where that burden is considered 
unfair, without the national regulatory authority [(‘NRA’)] being required to 
verify that there is a competitive relationship or substitutability between those 
operators within the same market. In addition, the reference for a preliminary 
ruling concerns the question of whether, in the light of Directive 97/33 and 
Directive 2002/22, and of the EU law principles of transparency, least market 
distortion, non-discrimination and proportionality, the national regulatory 
authority is permitted to verify that the burden on the operator responsible for 
providing the universal service in the telephony sector is unfair and, consequently, 
to impose a contribution obligation on mobile telephone operators on the basis of 
criteria other than that of substitutability between fixed telephone network 
services and mobile telephone network services. 
Article 267 TFEU. 
Questions referred for a preliminary ruling 
‘Must Directive 97/33/EC, and in particular Article 5 thereof, and Directive 
2002/22/EC, and in particular Article 13 thereof, applicable ratione temporis, and 
the principles of transparency, least market distortion, non-discrimination and 
proportionality, be interpreted as meaning that: 
(a) it is permissible for national legislation to impose by law the extension to 
mobile telephone operators of obligations to contribute to the financing of unfair 
burdens arising from the provision of the same universal service, without making 
such cases subject to verification by the NRA that there is a competitive 
relationship or substitutability between the contributing operators and the 
designated operator for the provision of that service within the same relevant 
market under competition law; 
(b) NRAs are permitted, in addition to or as an alternative to the criterion of 
substitutability between fixed and mobile network services, for the purposes of 
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verifying the unfair nature of the burden, to use other criteria – and if so, which 
ones – to establish a financing obligation on mobile operators?’ 
Provisions of European Union law relied on 
Commission Directive 90/388/EEC of 28 June 1990 on competition in the markets 
for telecommunications services, Article 4c, paragraph 1. 
Directive 97/33/EC of the European Parliament and of the Council of 30 June 
1997 on interconnection in Telecommunications with regard to ensuring universal 
service and interoperability through application of the principles of Open Network 
Provision (ONP), Article 5. 
Directive 2002/22/EC of the European Parliament and of the Council of 7 March 
2002 on universal service and users’ rights relating to electronic communications 
networks and services (Universal Service Directive), Article 13. 
Provisions of national law relied on 
Decreto del Presidente della Repubblica (D.P.R.) n. 318 – Regolamento per 
l’attuazione di direttive comunitarie nel settore delle telecomunicazioni 
(Presidential Decree No 318 concerning regulations for the implementation of 
Community Directives in the field of telecommunications), of 19 September 1997 
(‘Presidential Decree No 318/1997’), Article 3(6) and (11). 
Article 3(6) and (11) provided: 
‘3. Where, in accordance with the provisions of this article, the universal 
service provision obligations represent an unfair burden on the organisation or the 
organisations responsible for providing the universal service, a mechanism shall 
be established to share the net cost of those obligations with other organisations 
operating public telecommunications networks, providers of publicly available 
voice telephony services and organisations providing mobile and personal 
communications services. That mechanism shall not be applicable where: […] (b) 
the net cost of the universal service provision obligations does not represent an 
unfair burden […]. 
[…] 
11. On the basis of the net cost calculation […], the Authority, also taking into 
account the market benefit if any which accrues to the organisation responsible, 
shall determine whether the mechanism for sharing the net cost of the universal 
service obligations is justified. In that case, the corresponding burden shall be 
allocated on the basis of objective, non-discriminatory and proportionate criteria 
[…]’. 
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Decreto – Finanziamento del servizio universale nel settore delle 
telecomunicazioni (Decree on financing of universal service in the 
telecommunications sector) of 10 March 1998, Article 2(2). 
Article 2(2) provided: 
‘… a cost-sharing mechanism, based on the principles of non-discrimination, 
transparency and proportionality, shall be imposed on organisations which operate 
public telecommunications networks, which provide voice telephony services to 
the public, in proportion to the use by those organisations of the public 
telecommunications networks, or which provide mobile and personal 
communications services at national level.’ 
Decreto legislativo n. 259 – Codice delle comunicazioni elettroniche (Legislative 
Decree No 259 on the Electronic Communications Code) of 1 August 2003, 
Article 62(1), Article 63(1) and (3) and Annex 11. 
Article 62(1) provided: 
‘Where the Authority considers that the provision of universal service referred to 
in Articles 53 to 60 may entail an unjustifiable burden on the undertakings 
designated to provide that service, it shall provide for the calculation of the net 
costs of that provision. For that purpose, the Authority may: (a) proceed to 
calculate the net cost of the individual components of the universal service 
obligation, taking into account the commercial benefits if any which accrue to the 
undertaking designated to provide the universal service, in accordance with the 
procedures laid down in Annex 11 […]’. 
Article 63(1) and (3) provided: 
‘1. Where, on the basis of the net cost calculation referred to in Article 62, the 
Authority finds that a designated undertaking is subject to an unjustifiable burden, 
upon request by that undertaking, it shall allocate the net cost […] between the 
providers of electronic communications networks and services […]. 
[…] 
3. The system for sharing the costs must respect the principles of transparency, 
least market distortion, non-discrimination and proportionality, in accordance with 
Article 2(5), (6) and (7) of Annex 11. […]’. 
Pursuant to Article 3(2) and (6) of Annex 11: 
‘2. A cost-sharing mechanism, based on the principles of non-discrimination, 
transparency and proportionality, shall be imposed on undertakings which operate 
public communications networks, which provide publicly available telephone 
services, in proportion to the use by those undertakings of the public 
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communications networks, or which provide mobile and personal communications 
services at national level. 
[…] 
6. The mechanism referred to in paragraph 2 shall not be applicable where: 
[…] (b) the net cost of the universal service provision obligations does not 
represent an unfair burden […]’. 
Succinct presentation of the facts and procedure in the main proceedings 
1 Telecom Italia SpA (‘Telecom’) is the operator responsible for providing 
universal service in Italy in the telephony sector, which comprises a set of basic 
services, provided at affordable prices and related only to fixed telephony. 
According to the Italian legislation, where the provision of the universal service 
gives rise to a so-called ‘net cost’, that is to say, where the costs incurred by the 
provider exceed the benefits, the national regulatory authority must assess whether 
that cost represents an ‘unfair burden’ for the operator responsible, also taking 
into account market benefits if any which that operator derives from it. Where the 
national regulatory authority considers that the net cost of universal service (‘the 
NCUS’) represents an unfair burden, it shall allocate that burden among the 
operators in the telephony sector, including mobile telephone operators. 
2 By Decision 263/20/CIR, published on 21 July 2020, AGCOM, which is the 
national regulatory authority, launched a public consultation in order to review the 
potentially unfair nature of the NCUS imposed on Telecom for the years 1999 to 
2009. That decision was adopted following a series of administrative court 
judgments which had annulled some previous decisions on the matter. Vodafone 
Italia SpA (‘Vodafone’) brought an action against Decision 263/20/CIR before the 
TAR Lazio. 
3 AGCOM subsequently adopted Decision 18/21/CIR, in which it used one 
parameter for the so-called ‘prima facie’, that is to say, first-level, assessment of 
the potentially unfair nature of the NCUS and another parameter for the so-called 
‘seconda facie’, that is to say, second-level, assessment of that unfairness. 
4 As regards the so-called ‘prima facie’ assessment, more specifically, AGCOM 
used the parameter of the existence of increasing competitive pressure from 
mobile telephony services. In that regard, AGCOM noted that, although fixed and 
mobile telephony services are not perfectly substitutable for one another, the 
mobile telephony service exerts increasing competitive pressure on the fixed 
telephony service, in cases where the customer decides to use only the mobile 
telephone or decides to use the mobile telephone also at home, while keeping the 
fixed network service. Still in the context of the so-called ‘prima facie’ 
assessment, AGCOM also relied on the Body of European Regulators for 
Electronic Communications (BEREC) report of 2017, according to which, in order 
to determine the unfair nature of the burden and the consequent applicability of 
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the sharing mechanism, it is necessary to assess the degree of competitiveness of 
the market on the basis of the following indicators: (i) shares in the market for 
access by volume and revenues; (ii) volume and shares in the telephone traffic 
market; (iii) degree of interconnection for origination and termination services on 
fixed and mobile networks; (iv) deployment of services on a mobile network; (v) 
benefits for operators resulting from the universal service obligations; (vi) 
financial position of the operators. 
5 As regards the so-called ‘second facie’ assessment, on the other hand, AGCOM 
used the parameter of the NCUS/EBITDA ratio and the burden on the universal 
service provider was considered unfair in the presence of an NCUS/EBITDA ratio 
of more than 0.17%. 
6 In Decision 18/21/CIR, AGCOM concluded that, as regards the years 1999 and 
2000, the provision of the universal service did not entail an unfair net cost for 
Telecom and that, therefore, the sharing mechanism was not applicable. By 
contrast, as regards the years 2002, 2003, 2004, 2005, 2006, 2007 and 2009, the 
provision of the universal service did entail an unfair net cost for Telecom and, 
therefore, the mechanism for sharing with other operators in the telephony sector, 
including mobile telephone operators, was applicable. 
7 Decision 18/21/CIR was also challenged by Vodafone before the TAR Lazio. In 
addition, by a separate action, Telecom challenged that decision in relation to the 
years 1999 and 2000, for which the net cost of the universal service remained 
entirely borne by it. In that proceeding, Vodafone, among others, entered an 
appearance by bringing a cross-appeal. 
8 The TAR Lazio ruled on Vodafone’s action by judgment No 1963/2022, annulling 
Decision 18/21/CIR on the ground that the parameter represented by the 
NCUS/EBITDA ratio of more than 0.17%, used in that decision to assess the 
potentially unfair nature of the NCUS, is arbitrary and unreasonable. Telecom, 
AGCOM and the Ministero dello Sviluppo economico (Ministry of Economic 
Development, Italy) appealed against that judgment before the Council of State. 
Vodafone entered an appearance in both proceedings by bringing a cross-appeal. 
9 In addition, the TAR Lazio ruled on Telecom’s action in judgment No 2218/2022, 
upholding Vodafone’s cross-appeal with reasoning similar to that set out in 
judgment No 1963/2022. Telecom and AGCOM appealed against judgment 
No 2218/2022 before the Council of State. In both proceedings, Vodafone, among 
others, entered an appearance by bringing a cross-appeal. 
The essential arguments of the parties in the main proceedings 
10 Vodafone submits that, pursuant to both Presidential Decree No 318/1997 and the 
Electronic Communications Code, the extension to mobile telephone operators of 
the obligation to contribute to the burden relating to the provision of the universal 
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service presupposes the existence of competitiveness by substitutability between 
fixed and mobile telephony. 
11 As regards the years 1999, 2000, 2002 and 2003, the allocation of the burden 
relating to the provision of the universal service was the subject of a series of 
judicial decisions of the Council of State and of the Corte di Cassazione (Supreme 
Court of Cassation, Italy), having the force of res judicata, which held that in the 
years at issue there was no competitive market between the fixed telephony and 
mobile telephone operators and that, therefore, the condition for imposing the 
burden on mobile telephone operators was not satisfied. Moreover, the effects of 
those decisions also extend to the years 2004, 2005, 2006, 2007 and 2009, in 
respect of which the decisions of AGCOM 65/09/CONS and 623/15/CONS ruled 
out the existence of a competitive relationship by substitutability between fixed 
and mobile telephony. The abovementioned judicial decisions also took into 
account the Commission’s communication of 27 November 1996. 
12 According to Vodafone, moreover, the analysis carried out by AGCOM in 
Decision 18/21/CIR is unlawful in that it finds that there is increasing competitive 
pressure from mobile telephony services in relation to fixed telephony services. 
On the one hand, indeed, the parameter of competitive pressure is essentially 
identical to that of substitutability between fixed and mobile telephony, which 
remains an indispensable condition for a finding that there is a competitive 
relationship between the two services. On the other hand, the finding of increasing 
competitive pressure from mobile telephony services contradicts the market 
analyses carried out by AGCOM in the abovementioned Decisions 65/09/CONS 
and 623/15/CONS. 
13 In contrast, AGCOM and Telecom claim that neither European legislation nor 
national legislation provides that the contribution of mobile telephone operators to 
the NCUS is subject to verification of the condition of substitutability between 
fixed and mobile telephony. In particular, the Commission’s communication of 
27 November 1996 merely gave the Member States the choice as to whether or 
not to include mobile telephone operators among those required to finance the 
universal service. The Italian legislature opted for their inclusion, first by 
Presidential Decree No 318/1997 and the Decree of 10 March 1998, and 
subsequently by the Electronic Communications Code. 
14 Moreover, in many other EU countries, in the years taken into consideration in 
Decision 18/21/CIR, the mechanism for financing the universal service involved 
fixed and mobile telephone operators without distinction. That extension of the 
obligation to contribute to all fixed and mobile telephone operators was not 
challenged by the companies of the Vodafone group active in the other European 
countries. 
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Succinct presentation of the reasoning in the request for a preliminary ruling 
15 First, the referring court notes that there are fluctuations in the administrative 
case-law on the subject. On the one hand, some decisions of AGCOM which had 
applied the NCUS sharing mechanism were annulled on the ground that it had not 
been proven that there was a relationship of substitutability between fixed and 
mobile telephony, which had to be regarded as the condition for the imposition of 
the contribution obligation on Vodafone. On the other hand, by judgment 
No 6881/2019, the Council of State held that the criterion of substitutability 
between fixed and mobile telephony, as a condition for the contribution obligation 
on mobile telephone operators, was ‘misleading’, that is to say, incorrect. 
16 Secondly, the referring court notes that, according to the national legislation, the 
inclusion of mobile telephone operators among the persons required to contribute 
to the financing of the NCUS, where the provision of the universal service 
represents an unfair burden, is not expressly subject to demonstrating that there is 
a sufficient degree of substitutability between fixed and mobile telephony. 
Nevertheless, national case-law considers that such substitutability is a necessary 
parameter for the purpose of determining the unfair nature of the burden relating 
to the provision of the universal service. 
17 Thirdly, the referring court notes that the parameter of competitive pressure used 
by AGCOM in Decision 18/21/CIR appears to be largely similar to that of 
substitutability between fixed and mobile telephony used in previous regulatory 
decisions on the subject. 
18 Fourthly, the referring court takes the view that the criterion for extending to 
mobile telephone operators the obligation to contribute to the NCUS cannot be 
readily inferred from the European legislation and considers, therefore, that it is 
necessary to refer the abovementioned questions to the Court of Justice of the 
European Union for a preliminary ruling.