Telecoms boss hits back as Monti blasts old monopolies

Date: 11/07/02

By Peter Chapman

COMPETITION Commissioner Mario Monti has drawn fire from his native Italy for allegedly implying that all former state-run monopolies are abusing their market power to fleece competitors.

Speaking at a Brussels conference on competition in local telephone networks known as the 'local loop', Monti invited complaints from new entrants that have been illegally shut out of the market for fast broadband internet services.

The commissioner, who has already announced anti-trust probes in Germany and France, said he believed there was 'no smoke without fire' and that 'numerous complaints by access seekers at national and European levels do reflect actual competition problems'.

But Telecom Italia director Riccardo Perissich told European Voice that this helped to spread the belief that the old monopolies 'in general are behaving badly' - although he admitted Brussels must keep an eye on specific cases where operators had tried to squeeze out new entrants.

'If we are accused of a crime, first a crime must exist and there must be reasonable suspicion that we are the assassin.'

'We are not,' he said, adding that the company had recently been cleared of any wrongdoing following a probe by Italian watchdogs.

Perissich also rejected calls by the CEO of Europe's biggest independent internet service provider, Tiscali, for the big incumbent telecom operators to be forced to grant rivals access to key parts of their broadband infrastructure - as they must do for voice-based telephone calls.

Tiscali's Renato Soru told European Voice that interconnection to the old monopolies' technology was needed because a new EU law allowing firms to rent parts of the basic local loop from incumbents to offer fast 'ADSL' internet services was 'simply a disaster'.

He said new entrants did not have the money to replicate the high-tech equipment needed to offer ADSL over the local loop.

Without interconnection to all of the incumbents' boxes and wires, he said, 'competition will be cancelled'.

But Perissich said 'the only result' would be for incumbents to scale down their investment in new broadband technology because they would make no profit from the services.

Competition Commissioner Mario Monti has drawn fire from his native Italy for allegedly implying that all former state-run monopolies are abusing their market power to fleece competitors.