Telecom Italia approves network separation plan

On 6 March 2018, Telecom Italia (TIM)’s board approved a plan to move the company’s fixed network assets into a legally separated entity, which will still be part of the group and will be 100% controlled by TIM. According to the plan, access to the network will be granted through a ‘one-stop-shop’ access point for regulated and unregulated wholesale services for all operators including TIM, delivering a 'fully neutral and equivalent' model.

Luca Schiavoni, Senior Analyst at Assembly comments:

“Several factors contribute to TIM’s decision. It is perhaps striking that, despite the currently changing political landscape in the country, the board decided to approve the plan without waiting for a new government to take power. On the one hand, this is because nearly all the main political parties in Italy have taken the stance of the need to have a separated fixed network, which means that political pressure for this to happen would have likely continued under the new parliament. On the other, the market in Italy is evolving in such a way, that it is now a good time for TIM to make the spin-off.

In particular, the rise of wholesale-only provider Open Fiber has, for the first time since the liberalisation of Italy’s telecoms market, put significant pressure on TIM’s future wholesale revenues, currently around €2bn per year and forecast to decline by about a third by 2022. Alternative operators quickly warmed to Open Fiber’s arrival on the market, which is now starting to give them an alternative to TIM’s network. For years, these operators have raised concerns about access conditions and TIM’s way to satisfy their access requests.

For now, it is hard to make predictions about ownership of the network. TIM will be the sole owner for the time being, though political pressure and changes in market conditions could result in new investors (both private and public) coming into the netco. It will take at least one year before things become clearer on this front.”

Stakeholders unhappy with spectrum deal as part of the EECC code

On March 1, 2018, the European Commission, the EU Parliament, and the EU Council reached a preliminary agreement on parts of the forthcoming European Electronic Communications Code, related to spectrum policy. The agreement includes the availability of spectrum for 5G in the EU by 2020; a 20-year period of ‘investment predictability’ for spectrum licences; and enhanced coordination and peer review of planned radio spectrum assignment procedures.

Luca Schiavoni, Senior Analyst at Assembly comments:

"Thursday’s agreement obviously brings the EU one step closer to having a framework for 5G – a drum which policy makers and the industry have beaten hard in the last few weeks, particularly in Barcelona at MWC. However, there is little to cheer about, as once again the distance between different institutions has emerged, and compromises mean nearly everyone is unhappy.

The 20-year period for licences’ length is probably too little, too late, and is certainly seen as such by the industry, whose appetite was whetted by the EC through a promise of 25-year long permits in the initial proposal. Governments, on the other hand, tried to push for a 15-year period, as they have an interest in retain more control on the resource and its frequency of award.

Some stakeholders, such as ETNO, have already voiced their discontent, and they are likely to be joined by others. They very much have a point – progress in 5G deployment in other regions, such as the US, shows that investment is key, and requires a favourable regulatory environment. EU institutions maintain they want 5G commercially available by 2020, though it is currently unclear whether they will even be able to ensure the necessary spectrum awards will have taken place by that deadline."

Tech companies should take down illegal content in one hour

The European Commission issued today a set of operational measures to tackle illegal content online. This also includes terrorist content and hate speech. Tech companies are recommended to follow a ‘one-hour-rule’ to take down terrorist content and to implement faster detection systems, including automated ones. Tools should also be shared with smaller companies. Businesses will have to submit information to the EC about their compliance with this Recommendation within three months.

Luca Schiavoni, Senior Analyst at Assembly comments:

“Today’s Recommendation from the EC is not binding, but certainly has the practical effect of strongly steering these companies’ takedown processes and making them stricter. Pressure has been mounting on these companies to take action against terrorist content and abusive speech, as show by the flurry of activity around the issue of 'fake news' in several countries.

On their side, the main social networks are already taking action, as they have understood they cannot ignore the problem if they want to avoid prescriptive regulation. Twitter and Google are implementing technology to detect bad content and fake accounts, and Facebook is poised to do something similar in the coming months.

The main problems are likely to arise for smaller online platforms, for two reasons: they are less likely to be on the regulators’ radar, and they generally have reduced financial capabilities to invest in the implementation of similar instruments. To this end, it is sensible that the EC has recommended the industry share best practices and technology; and we could see more of what recently came out of the UK government, which invested in a technology solution to detect terrorist content and wants small platforms to adopt it.”