WRITTEN QUESTION P-4069/00 by Antonio Di Pietro (ELDR) to the Commission. Increase in Telecom subscription rate.
Date: 2000-12-20
Institutions: European Parliament, Provisional data
Subjects: Italy, infringement of EU law, tax, telephone

20.12.2001

EN

Official Journal of the European Communities

C 364 E/5

As from January 2001 the monthly summaries of Council acts include references to the voting procedure
followed for the adoption of the acts by the Council (unanimity, qualified or simple majority). These
monthly overviews are published on the Council(cid:146)s website (http://ue.eu.int, under (cid:145)Transparency(cid:146) and
(cid:145)Summary of Council acts(cid:146)).

(2001/C 364 E/006)

WRITTEN QUESTION P-4069/00

by Antonio Di Pietro (ELDR) to the Commission

(20 December 2000)

Subject: Increase in Telecom subscription rate

According to Italian press reports, the European Commissioner responsible for competition, Mario Monti,
has asked the Italian telecommunications watchdog body (Autorit(cid:224) per le Garanzie nelle Comunicazioni
italiane) to increase the Telecom annual subscription rate for fixed telephony by at least 6 %, excluding
VAT and inflation.

This subscription generates a total income of around ITL 7 700 billion for Telecom Italia each year. It would
appear, on the basis of comparable purchasing power, to be the highest in Europe. However, with the
switch from a concessionary to a licensing system, the telephone subscription rate should, with a view to
guarding against distortions of competition, gradually fall rather than rise until it only covers the actual
cost of maintaining the fixed network.

The problem is that the investigations aimed at establishing the (cid:145)access deficit(cid:146) were conducted by a former
Ministry of Communications director, who had moved on to the watchdog body and was then recruited by
Telecom Italia.

In response to the Commissioner(cid:146)s request, two Italian consumer organisations (cid:129) Adusbef and Codacons
(cid:129) have submitted to the competent authorities a complaint questioning Mr Monti(cid:146)s right to impose such
an increase on an independent authority and asking whether his role should not be limited to making
representations to national governments.

In the light of the above, it would seem necessary to establish whether any member of the Commissioner(cid:146)s
office may be in a position of conflict of interest with respect to the request to the watchdog body to
increase the subscription rate.

Answer given by Mr Monti on behalf of the Commission

(2 May 2001)

Acting on a proposal by the Member of the Commission who was responsible for competition at the time,
the Commission decided in 1998 to initiate infringement proceedings against Italy, because that country
had not authorised Telecom Italia to rebalance its telephone tariffs. Article 4c of Directive 90/388/EEC, as
amended, provides that before the liberalisation of the market on 1 January 1998 the Member States must
allow telephone tariffs to be aligned on real costs. The purpose of this is to stop prices being held below
costs in some markets, which would deter investments by new entrants into these markets.

During September and October 2000, experts from the Italian telecommunications watchdog body
(AGCOM) and the Commission agreed on the cost of the service providing access of Telecom Italia. This
made it possible to calculate the necessary increase in the annual subscription rate in order to enable
Telecom Italia to generate sufficient revenue to cover the cost of this service. The purpose of the
Commission(cid:146)s action in relation to AGCOM was solely to remind it that if it did not permit such an
increase, the Commission would have no alternative but to refer the matter to the Court of Justice to find
that the Directive was being infringed. The Commission was obliged to refer the matter to the Court of
Justice if, after more than two years of proceedings, AGCOM still did not allow Telecom Italia to align its
annual subscription rate on the real cost. Since the Directive refers to alignment on the real costs of the
services concerned, it is not legitimate to make an international comparison.

C 364 E/6

Official Journal of the European Communities

EN

20.12.2001

Telecom Italia was not involved in the process of calculating the cost of the access service, except to
provide the required accounting data or details on the accounting methodology used. As regards the Italian
former senior official mentioned by the Honourable Member, who is currently working within Telecom
Italia, this is a purely internal Italian matter on which the Commission cannot comment.

The Commission has received a letter from consumers(cid:146) associations, questioning the relevance and
legitimacy of its action with regard to the rebalancing of tariffs. It has replied to this letter, which seemed
to be based on misunderstandings, by explaining the grounds for its action. The Commission does not call
into question the (cid:145)price cap(cid:146) principle introduced by AGCOM. Consequently, if Telecom Italia increases its
annual subscription rate, it will have to reduce other prices to remain below the ceiling set for 2001 and
2002. For the average consumer, this operation will involve no extra cost. Lastly the Commission has not
imposed an increase in the annual subscription rate, let alone fixed its amount, and has merely set out the
legal constraints to which it was itself subject.

Lastly, no member of the office of the Commissioner responsible for Competition has a conflict of
interests.

(2001/C 364 E/007)

WRITTEN QUESTION E-0040/01

by Jeffrey Titford (EDD) to the Commission

(18 January 2001)

Subject: Human rights abuses in Saudi Arabia

I am informed that the European Commission has addressed a number of issues involving the death
penalty in Saudi Arabia and the execution of young people under the age of 18 years.

I understand that these matters have been raised with the Gulf Cooperation Council.

representations has the European Commission made to the Gulf Cooperation Council,

What
Government of Saudi Arabia or any other bodies, when did it do so, and what was the outcome?

the

Answer given by Mr Patten on behalf of the Commission

(31 July 2001)

The Commission is concerned about the human rights situation in Saudi Arabia including the extensive
use of the death penalty. However, there is no specific agreement with Saudi Arabia, which would allow
a direct exchange of views and dialogue on these issues with the Saudi government.

A regular political dialogue has been established within the context of the Cooperation Agreement
between the Community and the Gulf Cooperation Council countries, which includes the United Arab
Emirates, Saudi Arabia, Bahrain, Qatar, Oman, and Kuwait.

In this dialogue, human rights is an important part of the agenda. In the last two years, the situation in
Saudi Arabia and in the other Gulf Cooperation Council (GCC) countries has been discussed extensively at
the yearly senior officials and Ministerial meetings between the Union and the GCC. This development
follows the increased interest in the human rights situation in the region by the EU, which was also
expressed at the last two annual meetings of the United Nations Commission on human rights, where the
Union raised the situation in Saudi Arabia, including the issue of the death penalty.