On March 11th, 2011, the Supervisory Board Annual Report on the activities performed, the results obtained in 2010 and the work programme for 2011 was presented during a conference held at the MAXXI Museum in Rome. Said Report was published, together with the Conference proceedings, on the Supervisory Board (SB) website. A preview was presented to the National Regulatory Authority AGCom during the SB hearing held on February 9th, 2011.
At the beginning of the year the SB started a series of initiatives to implement the Plan of activities for 2011, regarding, in particular, checks on operators and the systems involved in quality and development plans of the fixed access network.
More specifically, as regards Undertakings Group no. 1, analysis was started into causes of rejection of Retail Work Orders and the activities performed to verify the actual progress and the level of operation of the New Delivery Process (NDP).
Moreover the supervisory activities continued to verify respect for principles of equality of Internal/external treatment and non-discrimination by Open Access e National Wholesale Services staff established by the Code of Conduct as per Undertakings Group no. 2.
In relation to Undertakings Groups no. 3 and no. 4, the SB started checks on the basic data useful for calculating the indicators foreseen, on the basis of the specifications regarding the certification of data communicated by Telecom Italia to the SB. Furthermore, starting from January, the monitoring system was integrated with the new KPIs resulting from the 2009 technical workshops, which were gradually adopted and became fully operative and integrated in the report at the beginning of 2011.
As regards the quality and development of the fixed access network as per Undertakings Groups no. 5 and no. 6, the monitoring of the progress of the action plans envisaged in the planning documents supplied by Telecom Italia continued. Furthermore, the SB asked Telecom Italia for some additional information regarding the mechanism of the pre-warning system for indicating exchange saturation levels.
Lastly the SB is carrying out in-depth investigations following the complaint by the Welcome Italia Operator, which started procedure "S01/11 - Welcome Italia/Bistream services saturation problems - Implementation of Undertakings Group no. 5 relative to the guarantees of transparency of the technical plans for the quality of the fixed access network".
Progress on the implementation of the Undertakings
Undertakings Group No. 1
(setting up a New Delivery Process)
As far as Undertakings Group no. 1 is concerned Resolution n. 5/2011, provided for analysis to be started on the causes of rejection of Work Orders (so-called KO) in relation to the offer of Telecom Italia Retail services.
Furthermore, the SB, given the increasingly greater number of alternative Operators participating in the New Delivery Process (NDP), decided, with Resolution n. 8/2011, the start of activities aimed at verifying the actual progress and the level of operation of the NDP. The participation of representatives of the Supervisory Office was also provided for at the bilateral meetings between Telecom Italia and the alternative Operators, both those who participate in the NPD and those for which preliminary adhesion activities are under way.
Telecom Italia also sent the SB its response regarding the requests made with Resolution no. 22/2010 containing recommendations aimed at making operation of the delivery process more efficient and transparent.
Undertakings Group No. 2
(establishment of a new incentive system and a Code of practice)
The SB has planned three meetings with Telecom Italia which will focus on the progress of the training courses for Open Access and Wholesale Department personnel, verification of the effectiveness of these courses and the assessment of the 2011 MBOs defined by Telecom Italia, to determine their correlation with the measures contained in the Undertakings.
Undertakings Group No. 3
(establishment of a performances monitoring system for SMP services)
As regards Undertakings Group no. 3, the SB decided, with Resolution n.4/2011, the start of activities by the Supervisory Office to verify the basic data useful for calculating the indicators foreseen, on the basis of the specifications regarding the certification of data communicated by Telecom Italia to the SB (for in-depth information see the relative paragraph below).
Undertakings Group No. 4
(guarantees of transparency of the monitoring system)
With reference to the KPI monitoring system for Undertakings Group no. 4, the activities to verify the information and data supplied by Telecom Italia in the first quarter of 2011 regarding the reports containing the surveys for the months of December 2010, January and February 2011, the IVQ 2010 and the final annual report for the same year continued.
Starting from January the monitoring system was integrated with the new KPIs resulting from the 2009 technical workshops, which were gradually adopted and became fully operative and integrated in the report at the beginning of 2011. Telecom Italia furthermore agreed to the OLOs' requests relative to inserting further KPIs regarding end-to-end throughout times and Voice/Active Line Delivery services; said new KPIs will come into operation in the third quarter of 2011.
Undertakings Group No. 5
(guarantees of transparency of technical plans for the Quality of the fixed access network)
With Resolution n. 6/2011 the SB requested from Telecom Italia detailed information regarding the state of saturation of the exchange areas served by miniDSLAM equipment and the intervention criteria aimed at their desaturation.
The SB also analysed the documents produced by Telecom Italia in accordance with Undertakings Group no. 5, which in the first quarter 2011 regarded the final figures IVQ 2010 and the Programme for IIQ 2011; the SB also received from Telecom Italia the 2010 annual report on the quality of the fixed access network.
Undertakings Group No. 6
(guarantees of transparency of technical plans for the Development of the fixed access network)
Regarding the development of the fixed access network, the monitoring and auditing of the progress of the action plans envisaged in the planning documents supplied by Telecom Italia continued.
In particular, Telecom Italia sent the final reports for the fourth quarter 2010 for the development of the fixed access network - NGA network, Broadband Coverage and Lotting Plan.
The 2010 Annual Report and the Quarterly Programme for the second quarter of 2011 were also sent.
Undertakings Group No. 8
(integration of Telecom Italia regulatory accounting and calculation of transfer charge)
As regards Undertakings Group no. 8, a meeting was held in January during which Telecom Italia updated the SB regarding the activities implemented by Telecom in compliance with the provisions of the above Undertakings Group; in particular the steps of the main interventions started in compliance with the measures laid down in the Undertakings, among which, starting in 2009, the construction of the new accounting systems and the definition of Transfer Charges to price, followed by later meetings with AGCom aimed at defining the Guidelines for the application of new reference models, later submitted for public consultation with Resolution 2/11/CONS.
Undertakings Group No. 12
(obligation to report activation of unrequested services)
The SB analysed the content of the report containing the data relative to the fourth quarter of 2010 sent by Telecom Italia.
Undertakings Group No. 14
(measures to reduce the number of disputes with the customers)
Telecom Italia sent the SB the report on the progress of settlement activities carried out on a national level from July 1st to December 31st, 2010, on which the SB started the usual monitoring activities.
Presentation of the 2011 Annual Report on the activities carried out, the 2010 results and the 2011 Work Programme
On March 11th, 2011, the SB presented the Annual Report on the interventions carried out, the results obtained in 2010 and the main activities scheduled to be started in 2011 within the context of the conference on the topic "What is the future of electronic communication networks?" held at the Museum of XXI Century Art MAXXI in Rome.
The Chairman of AGCom, Corrado Calabrò, the CEOs of Telecom Italia, Franco Bernabè, WIND, Luigi Gubitosi, and BT Italia, Corrado Sciolla, the Director General of Tiscali, Luca Scano, and Professors Decina, Prosperetti and Libertini took part in the event.
From the introductory report, illustrated by the Chairman, Prof. Giulio Napolitano, it emerged that, in order to improve the implementation of the Undertakings, during 2010 the SB made 33 specific Recommendations to Telecom Italia : 14 concerned the New Delivery Process, 6 the Code of Conduct for Open Access personnel, 11 the quality of the network and 2 its development. Of these 33 Recommendations, 6 required considerable updating of company management procedures.
With the strategic lines of intervention for 2011, approved with Resolution n. 1/2011in order to guarantee the implementation of the Undertakings, the main intervention activities of the SB were identified, particularly those relating to improving the quality of access network.
The Annual Report, together with the Conference proceedings, were published and made available on the SB website.
Alternative operator complaints
Complaint S01/11 - Welcome Italia/Bistream services saturation problems - Implementation of Undertakings Group no. 5 relative to the guarantees of transparency of the technical plans for the quality of the fixed access network
On February 7th, 2011, the SB received a complaint from the Welcome Italia S.p.A operator, regarding an alleged breach of the Undertakings by Telecom Italia. In particular the claimant Company complained of inconvenience caused to its customers due to the saturation of the Telecom Italia exchanges for the supply of Bitstream services and the fact that the Company disregarded some communications made in 2010 regarding desaturation operations planned but then not implemented on the reference exchange This situation, according to the claimant, as well as determining the impossibility to guarantee customers the due regularity in supply of the service, could potentially compromise the alternative Operators' capacity to plan network development strategies and marketing of Retail services sufficiently in advance.
The SB started the verification activities provided for by its Regulation with Resolution n. 2/2011, inviting the parties concerned to supply any information useful in defining the case.
After proceeding with the 30 day extension of the terms for concluding the investigation, the SB convened a hearing for Telecom Italia on March 24th, 2011: during this hearing, the Company pointed out that the critical elements relative to the "slow navigation" complaints by Welcome Italia were due to more general problems concerning the growth in broadband traffic at a higher rate than expected. This growth has forced Telecom Italia to constantly reconsider its plans to upgrade the band capacity of the saturated DSLAM ATMs, increasing the number of expansion operations. In relation to the growing average requirements for the year under way, the number of interventions currently planned for 2011 (1,882) today appears insufficient; considering the present growth trend, the objectives of the Annual Plan will therefore be reformulated, foreseeing at least 2,500 expansion interventions.
The difficulties deriving from the need to continuously adapt the content of the Plan to face the increasing traffic, were added to by those connected with desaturation operations for exchanges served by DSLAM ATM, technology now out of production; according to Telecom Italia the only way to desaturate DSLAM is therefore to bring DSLAM IP alongside existing systems and migrate Telecom Italia Retail customers onto these. For the migration of Wholesale customers, however, the OLOs will have to equip themselves with Ethernet interconnection Kits in exchanges which currently only have ATM interconnection Kits.
In order to supplement the desaturation activities and make them suitable for a continuous increase in traffic, Telecom Italia has also undertaken new initiatives, including:
- the reduction in the price of the Ethernet band with respect to the ATM band;
- assignment of residual resources to the expansion of sites with no alternative in Ethernet; Telecom Italia will inform Operators that, for exchanges already served by Ethernet, starting from a certain date (being defined), once there are no more ATM resources available, only orders for activation of new Bitstream accesses on Ethernet platform will be handled;
- "traffic shaping" policies - initially for solely Retail customers - for which traffic will be restricted in the use of some services which are more burdensome in terms of band occupation, such as, for example, the so-called "peer to peer" services.
Upon conclusion of the meeting, Telecom Italia undertook to send a note to the SB giving information about the interventions implemented to overcome the critical elements highlighted by Welcome Italia, the methods for handling Trouble Tickets, the distribution across the territory of the increase percentage of recorded band and the representation of the number of exchanges desaturated in 2010 and 2011, disaggregated into interventions carried out on exchanges open to LLU and exchanges not open to LLU.
KOs Retail analysis
The SB started analysing the causes of rejection of Work Orders (so-called KO) regarding the offer of Telecom Italia Retail services.
The Supervisory Board, as decided in the 2011 Work Plan, assigned the Supervisory Office to set up an extension of the KO analysis carried out last year, in order to assess the effective equality of internal-external treatment with regards to handling of the delivery process. The analysis will focus on verification of the causes of cancellation of Work Orders in relation to Telecom Italia Retail customers and the assessment of possible differences in treatment with regards OLO customers. The verification is planned to to have a duration of 11 months and at the end the Supervisory Board will prepare a report to illustrate the interventions carried out and the results achieved.
Certification of data
A project was set up in 2010 aimed at validating the mechanism for extracting the data generated by the performance Monitoring System for Telecom Italia SMP services regarding Trouble tickets and Work Orders.
The SB started verification activities regarding the accuracy of the basic data useful for calculating the indicators specified in Undertakings Groups no. 3 and no. 4. The verification will have a duration of 12 months, starting with the data available at January 2011.
These verification activities are conducted by Supervisory Office personnel, who report the results to the Supervisory Board on a quarterly basis. As an outcome of the verification activities, the SB will prepare a final report giving its assessment also as regards any corrective action to be taken.
The first sample extraction relative to January 2011 data was carried out on March 28th. A sample of 386 work orders for the delivery process (KPI 1 indicators) and 947 trouble tickets for the assurance process (KP2 indicators) were examined, for a total of 1,333 elements. The identifying elements of the sample records were sent, in the presence of Open Access, the University of Catania and the Supervisory Office, to Telecom Italia, which provided to supply, for each record, all data present in the operative databases. In comparing data extracted from the database used to calculate the KP1 and KP2 indicators within Undertakings Group no. 4 and the corresponding data present in the operative databases no significant differences emerged.
The exchange saturation pre-warning signalling system ("Amber Light")
As an outcome of the analysis carried out regarding the closure of about 500 exchanges to the marketing of bitstream services due to network saturation referred to in Complaint S01/2010 by the OLOs, the SB recommended Telecom Italia to set up a shared pre-warning mechanism for indicating the status of exchanges close to saturation.
With Resolution n. 7/2011 the SB decided to continue the verification activities aimed at assessing the pre-warning mechanism for indicating the status of exchanges close to saturation (so-called "amber light"). Furthermore, in order to asses the consequences of exchange saturation on the number of customers who potentially cannot be served on the saturated DSLAM systems, the SB requested that Telecom Italia inform them, with special quarterly reports, of the consistency by geographical area in terms of telephone users in the areas served by saturated DSLAM and the number of ADSL customers already active over these areas.
Other SB activities
- During the first quarter of 2011 contacts with AGCom and relations with alternative Operators were intensified, allowing, as in the case of the Wind Operator, to go deeper into specific regulatory matters, the definition of which is destined to have significant effects on the Undertakings; reference is made, in particular, to matters concerning the interpretation of the extension of applicability of the Undertakings to new generation network access services too.
- The activities for the study and analysis of functional separation models adopted on an international level also continued. Particular attention was paid by the SB to the document approved in February by BEREC (the Body of European Regulators for Electronic Communications), following a specific public consultation, containing the guidelines for interpreting the new articles 13 bis and 13 ter of the Access Directive, relating respectively to the functional separation decided by a national Authority and the voluntary separation proposed by an SMP operator. This document highlighted the validity of the Open Access model, which is to all effects an example of functional separation.