Italian competition watchdog probes FiberCop plan

Italy’s antitrust authorities are keen to ensure that the planned creation of a new wholesale fibre network won’t harm competition.

To that end, the Competition and Market Guarantor Authority (AGCM) has launched an investigation into all those entities currently involved in the FiberCop joint venture, including Telecom Italia, Fastweb, Tiscali and KKR.

The EU has already said that as far as it is concerned, the creation of FiberCop doesn’t constitute a merger, so it won’t investigate. For its part though, the AGCM wants to look into the contracts governing the establishment and operation of FiberCop, and the supply agreements with Fastweb and Tiscali.

“The development of fibre telecommunications networks represents a crucial goal for our country that can be achieved quickly only through the development of healthy dynamic competition,” the AGCM said, in a statement. “In this perspective, the Authority – recognising the possible efficiencies of shared infrastructure projects – has launched an investigation to ensure that the agreements in question do not involve unnecessary competitive restrictions and that they provide adequate incentives for the disposal of the old technology of copper networks.”

It is worth remembering that FiberCop is on course to get even bigger when it carries out its expected merger with another Italian wholesaler, Open Fiber. This will create a new entity called AccessCo. This part of the process came a step closer last week when utility Enel, which owns half of Open Fiber, agreed to sell up to its entire stake in the company to Macquarie Infrastructure and Real Assets (MIRA) for €2.65 billion.

There is no doubting the potential benefits to end users of creating a telco with the scale and financial clout to invest in fibre coverage in all areas of the country. However, it is understandable that such a move would attract regulatory scrutiny.

“The investigation aims to verify that the [FiberCop] agreements do not create obstacles to competition between operators in the medium and long term and are aimed at ensuring the rapid modernisation of the country’s fixed telecommunications infrastructure,” the AGCM said.

Indeed, as we all know, healthy competition spurs innovation and keeps prices in check. An alliance of rivals like FiberCop has the ring of a cartel to it, one that is expected to dominate the wholesale last-mile market. It is therefore up to the AGCM to ensure it does not behave like one.