Italians Launch Probe Into €1.2B FTTH Plan

There was a frisson of excitement last summer when Telecom Italia (a.k.a. TIM) and Fastweb announced a joint venture to invest €1.2 billion (US$1.3 billion) by 2020 in fiber-to-the-home (FTTH) connections to about 3 million homes in 29 Italian cities that already have significant fiber-to-the-cabinet (FTTC) deployments. (See Eurobites: T Italia, Fastweb Form FTTH JV.)

Now, though, that plan is under threat. Italy's competition authority -- L’Autorità Garante della Concorrenza e del Mercato (AGCM) -- has launched an investigation into the JV for "possible violation" of anti-competitive rules.

The AGCM notes that while the plan might well enable the "more efficient development of innovative technological infrastructure," it could also be "potentially capable of preventing, restricting or distorting" competition in the wholesale broadband access market.

So now the AGCM is seeking evidence, and, in collaboration with Italy's "Special Unit Antitrust of the Financial Police" (gulp!), it has "carried out a series of inspections" at the headquarters of Telecom Italia and Fastweb.

Telecom Italia (TIM) has issued a statement saying it has "behaved correctly and the industrial project is valid, which enables the acceleration of the dissemination of FTTH services, in line with the objectives of the National Ultrabroadband Strategy, increasing competition and bringing about benefits for consumers." It added that it will "assure the Authority maximum collaboration and transparency during the proceedings."

Swisscom AG (NYSE: SCM)-owned Fastweb is also on message. It is "convinced of the correctness of its actions and of the validity of the industrial project Flash Fiber," which, it says, is taking fiber to 20,000 homes per week "in line with industry forecasts and in line with the plans of public infrastructure in the country." It also "renews its confidence in AGCM and will continue to work constructively with the Authority."

Watching closely will be Enel, the power utility that joined forces with Italian state funding company CDP Equity SpA to form Open Fiber, the new Italian wholesale FTTH network operator. It is planning to spend €2.5 billion ($2.66 billion) on its access infrastructure and recently closed the acquisition of Metroweb for €714 million ($758 million) as part of its efforts to pass more than 9.5 million homes in 200 Italian cities. (See doclink 729268}.)

The result of the investigation will also be closely monitored by the European ultra-broadband community, which gathers next week for the annual FTTH Council Europe event, held this year in Marseille. There will be plenty of people and companies there hoping that planned investments are not held back.

— Ray Le Maistre, , Editor-in-Chief, Light Reading