Nationalisation devil may have been exorcised, but at what cost?

aprile 2, 2016

Pubblicato In: Varie

Sir, According to Massimo Mucchetti’s “proposal for Telecom Italia’s network” (Letters, March 29), all the “interested parties”, ie Telecom Italia, Enel and Metroweb, should “contribute their fixed networks” to a “New Company (NC) to be floated on an exchange”. Senator Mucchetti is keen to stress that his proposal is not to nationalise the network. However, he fails to provide further details: the terms and conditions at which the networks will be transferred to the NC and what the NC will charge for the use of network by the “interested parties”.

If the owners of the infrastructure agree on the deal, and the final users find acceptable the prices they will ultimately pay for the service, why has this solution not yet been enacted? Is it because some pressure has to be exerted on the actual owners to convince them to “contribute”? Is it because the final users might balk at tariffs high enough to ensure a profit to the monopolistic NC?

Senator Mucchetti may be content to have exorcised the “devil” of a nationalisation. But, in a fully standardised and interoperable telecommunications industry, desperately seeking a sustainable equilibrium between consolidation and competition, Italy would regress to the monopolistic structure of the past, to the insane idea of centrally planned investments.

My proposal for Telecom Italia’s network

lettera di Massimo Mucchetti al Financial Times del 29 marzo 2016

Sir, According to Rachel Sanderson’s report “Telecom Italia left guessing after Bolloré moves” (March 23), I am calling for Telecom Italia’s network to be nationalised. This is not so; the writer may have been misled by the inaccurate headline that the daily La Repubblica chose to sum up an interview I gave on the matter, where I simply took up an idea proposed by Franco Bernabè (then chairman of Telecom Italia) in a Senate hearing.

The proposal is that the fixed line network be transferred to a New Company (NC), to be floated on an exchange, to which Telecom Italia, Enel, Metroweb (and other interested parties) will contribute their fixed networks. They all would thus, at least initially, control the NC, which shall carry only a reasonable part of Telecom’s excessive debt burden; this will give Italy the next-generation network it badly needs. Later on, the founders could gradually scale down their stakes in the NC, enlarging the market float.

As can be seen, the Italian republic would, only initially, hold an indirect, minority stake, via Enel and Metroweb. My proposal is thus not to nationalise the network, and has nothing to do with a “patriotic retaliation” against Vivendi; on its takeover of Telecom, let me say that the market was, once more, totally trampled upon. Unfortunately, Italian law mandates a tender offer only if the acquirer crosses the threshold of 25 per cent (formerly 30 per cent) in the target. To prevent this happening, in 2013 I proposed to set the bar at 15 per cent; to no avail.

The real snag en route to the NC is in the assessment of Telecom Italia’s landline copper network, next to which Enel plans to lay optical fibre cables throughout Italy. If Enel is unwilling to start a joint project with Telecom Italia, and recognise a value for the partner’s copper network contribution acceptable to Telecom, it will have to go it alone. It will then have to challenge Telecom, without cross subsidies between electricity distribution — which is regulated — and telecommunications infrastructure. Far from any statist idea, the market will then choose the better project.

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