Update 2 May 2007: The National Regulatory Authority AGCOM has today issued a major public consultation document (Delibera 208/07/CONS) which covers functional separation (including 13 proposed measures) and next generation access networks.
Interested parties are given 60 days to comment on the main body of the consultation (46 pages, available only in Italian) and on an associated study (128 pages, available only in Italian). The accompanying AGCOM press release can be accessed by clicking here.

Yesterday, the Italian minister of Communications released
the exact wording of the proposed legislative amendment relating to functional
separation in the telecommunications sector.

The proposal amounts to enabling the National Regulatory
Authority AGCOM to:

1) Impose, on
operators declared as having Significant Market Power, where justified and
proportionate, an 'atypical obligation', i.e. a regulatory obligation that is
not part of the standard menu of regulatory obligations contained in articles
9-13 of the Access and Interconnection Directive 2002/19/EC, and reflected in
articles 46-50 of the Italian Code on electronic communications (the 'Codice').

T-REGS Note: Directive 2002/19/EC enables such 'atypical
obligations' to be imposed by regulatory authorities in 'exceptional
circumstances' and subject to the procedure in Article 8.3 of the directive,
i.e. the European Commission must take a decision authorising or preventing the
adoption by the national regulatory authority of such measures, which amounts
to an explicit veto power of the European Commission.

The precise wording of the proposed obligation, which is
proposed to be inserted as the new Article 45 3-bis in the Codice, can be
paraphrased as follows:

  • AGCOM may define direct rules in order to ensure that the
    administration and management of all elements that constitute the access
    network and associated facilities, including the components necessary to supply
    broadband services, are subject to...

  • A regime based on criteria of autonomy, of neutrality and
    functional separation of the other activities of the undertaking, with full
    guarantee of equality of treatment (external and internal) for all the
    operators demanding access.

  • The regime would encompass the most appropriate organisational
    measures, determined by AGCOM. 
2) As regards
the exact scope ('perimeter') of the activity subject to functional separation
(the notion of 'access network' is not defined), the implementation details,
etc., the procedure is not necessarily foreseen as an obligation of functional
separation imposed unilaterally and comprehensively by the regulatory
authority. AGCOM would be entitled to accept voluntary commitments, or come to
an agreement with the SMP operator. Any outcome of such a procedure would, however,
be materialised in an approval decision of AGCOM, and such an AGCOM decision
would, in fine, contain obligations determined by AGCOM.

This could be achieved through the procedure that is already
contained in Article 14bis of legislative decree 223 of 2006, converted into
law 248 of 2006.

In order to ensure speedy availability of the new powers to
AGCOM, it is proposed that the insertion of the new Article 45 3-bis in the
Codice would be achieved by adding a section to draft legislation that is currently
pending before Parliament (legislative proposal 2272).

The full text (available in Italian only) of the proposed
legislative amendment and the accompanying recital can be accessed by clicking

The web page of the Italian Chamber of Deputies, on which
the parliamentary process relating to legislative proposal 2272 can be
monitored, can be accessed by clicking here.

For a discussion of this important development, please
contact Yves Blondeel.