WRITTEN QUESTION P-0458/98 by Roberta Angelilli (NI) to the Commission (16 February 1998)

Subject: Fibre optics campaign by Telecom Italia and Rome Municipality

Over a year ago, Rome Municipality, in cooperation with Telecom Italia, launched a campaign, which is still in progress, to publicise the ROMA NEXUS project (as part of the Socrates plan) for the establishment of a fibre optics public communication network. This project is proving extremely costly: the work completed so far has involved the digging of trenches over a distance of 1000 km, causing considerable inconvenience to the general public. In May 1997, however, Telecom Italia announced as part of its industrial plan that, on the basis of the experience acquired at international level, it felt it necessary to replace the optical fibres with ADSL (Asynchronous Digital Subscriber Line) technology. The latter makes it possible for the communication network's cabling system to be based on the 'twisted wire pair' network already used for telephony instead of installing glass fibres which, among other things, require lengthy and costly digging operations, causing massive disruption to the city's streets. In January 1998, Telecom Italia therefore announced that, in the case of the Rome, only one quarter of the digging operations planned for the installation of glass fibres would be carried out, given that from 1999 onwards telematics services would be installed solely on the basis of the ADSL system.

1. Will the Commission state whether, on the basis of the above information, the advertisement published by Rome Municipality and Telecom Italia, 'Con la rete a fibre ottiche arriva in porto il futuro di questa città' ('The fibre optics network: a guarantee for our city's future') violates Community law, under Directive 84/450/CEE ((OJ L 250, 19.9.1984, p. 17. )) on misleading advertising, given that cabling operations will involve the use - not of fibre optics - but of another technology (ADSL), and that users who are being inconvenienced are being misled into believing that they will have access to advanced glass fibre-based technology, despite the admission made by the same authorities that the telematics network would in future be based on ADSL technology?

2. Will the Commission consider whether there has been distortion of competition in this case, i.e. will it assess the adverse effects of this publicity campaign on Telecom's potential competitors with regard to the provision of broad-band services, who were already in a position to provide ADSL-based network facilities?

Answer given by Mr Bangemann on behalf of the Commission (24 March 1998)

1. The choice of a technology is an internal strategic decision of an enterprise, based on a number of elements which include actual and potential demand for the services to be supported by the technology in question, the undertaking's financial capacity and the expected rate of return over investment. Telecom Italia's decision to replace only partially the existing copper wires by optical fibres for the city of Rome and, instead, to use ADSL technology with a view to improving the transmission capacity of the existing wires, has to be considered in this context. As to the advertising campaign, the Commission does not have enough factual elements to assess whether Directive 84/450/EEC has been infringed. The Commission will, however, consider requesting further information from Telecom Italia to finalise its assessment.

2. The Commission is aware that, since the regulatory framework currently in place in Italy has been completed only recently, Telecom Italia's campaign should be monitored with particular attention so as to ascertain any potential pre-emptive effect on competition in the infrastructure market. In case of complaints such investment announcement could be examined both by the national competition and telecoms regulatory authorities and the Commission and could lead to formal decisions, if it would be established that they pre-empt competition.