The Supervisory Board (SB) presented the Annual Report on the activities carried out and the results achieved in 2011 and on the work scheduled for 2012, at the convention “Governance of the digital network and agenda” held at Palazzo Barberini in Rome on 20 March 2012. This Report was published on the internet site of the SB.
The Report contains an assessment of the three-year mandate of the SB and the outlook as regards future activities.
With Determination no. 6/2012, the SB closed Complaint No. S02/2011, initiated following the report of Fastweb to verify the actual respect for the principle of equal treatment with reference to presumed discrimination relative to contracts stipulated between Telecom Italia and the contracting companies for the supply of the unbundling activation service. Specifically, the SB, as a result of the evidence that emerged, asked the Company to make the alternative Operators aware of the possibility of using survey tools to determine the satisfaction of their customers regarding the quality of the intervention performed by the contracting company, for purposes of evaluation of the service provided by that company.
The usual verification activities conducted by the SB as provided by Resolution No. 718/08/CONS then continued regarding the actual compliance of the Undertakings by Telecom Italia.
With reference to the Undertakings Group No.1, the adhesions continued to the New Process of Delivery (NPD), which during the period in question involved Vodafone and Wind for the bitstream service.
As regards the subjects covered in the Undertakings Group No. 2, the SB was able to review the results of the survey on Customer Satisfaction OLO of 2011, which yielded good results in terms of the satisfaction of the alternative Operators with the service received overall from Telecom Italia.
During the Council of 8 February 2012, the SB approved, with Determination no. 4/2012, the final report of the verification activity regarding the accuracy of the basic data necessary for the calculations of the performance indicators; on the subject, no anomalies were encountered relative to any differences between the data taken randomly together with the Open Access representatives from the Telecom Italia systems and similar data coming from the operational databases. This activity, started with Determination no. 4/2011 of 8 February 2011, was conducted over a 12 month period starting in January 2011.
The SB then concluded, with Determination no. 5/2012, the supplemental inquiry conducted regarding certain performance indicators, ascertaining the compliance of the values resulting from the KPI analysed with the principles of equal treatment.
With reference to the subjects covered in the Undertakings Group No. 8, Telecom Italia then explained the contents and implementation methods of Resolution No. 678/11/CONS bearing the Guidelines on Regulatory Accounting of fixed line network and service contracts to the SB during a meeting held in February.
Lastly, the meetings of 22 February and 13 March 2012 are reported, during which the Offices of the SB and those of the Authority agreed on the start of a permanent consultation model which, during 2012, may be usefully extended to the entire sphere of jurisdiction of the SB. Monthly meetings are planned aimed at the mutual exchange of information of the activities in progress and on the programmes of work. This will also allow problems in the management of the network and the access services to be investigated in greater depth and more effectively as they emerge.
Progress regarding the implementation of the Undertakings
Undertakings Group no. 1
(start of the New Process of Delivery)
The adhesions to the NPD continued during the first quarter of 2012; in particular, during the period in question the following companies adhered:
- Vodafone and Wind for the bitstream service; this last Operator will also adhere shortly to the WLR and LLU services;
- BT Italia and Panservice for the LLU service.
From the beginning of the NPD, the orders registered on the bitstream service were more than 200,000 (60,000 of which recorded during the first two months of 2012).
The Work Orders passed in the so called “Coda Unica” (single queue) and closed positively were 778 (data updated to 15 March 2012).
Undertakings Group no. 2
(establishment of a new system of incentives and a code of conduct)
During a special hearing held on 8 February 2012, the SB was able to view the results of the investigation on Customer Satisfaction OLO for 2011. The investigation, conducted between October and December 2011, verified the satisfaction of the alternative Operators with the service received overall and measured the performance levels and impact of the individual elements relative to the following areas of service: commercial, technical and administrative; the survey showed an improvement in all the areas listed. In particular, during the interviews, the acknowledgement of the OLOs emerged regarding the progressive improvements resulting from the different actions put into effect, agreed on with Telecom Italia during the various technical tables and workshops held in 2011.
The Supervisory Office then completed the analysis of the Delivery contract stipulated by Telecom Italia with the network companies, in accordance with what is provided by Determination no. 23/2011, following requests made by the Operator Fastweb (for greater detail, please see the specific paragraph relative to Complaint S02/2011).
Classroom training course sessions were held in January on equality of treatment for approximately 100 employees belonging to the Custom Service Department (former PSO).
Then at the request of some network companies, Open Access developed a specific handbook on equal treatment for all business employees.
Undertakings Group no. 3
(establishment of a performance monitoring system for SMP services)
The Supervisory Office continued verifying the basic data necessary for the calculation of the performance indicators included in the Undertakings Group No, 4, as provided by Determination no. 4/2011, also carrying out an inspection on-site at AOL Sardinia.
During the Council of 8 February 2012, the SB approved, with Determination no. 4/2012, the final report on the monitoring activity in question.
For more details, please see the following paragraph relative to the certification of the data.
During the first quarter of 2011 the work of defining the new basket of End to End indicators, which must replace the current set of KPI, continued.
Undertakings Group no. 4
(guarantees of transparency of the monitoring system)
In addition to the 2011 annual report, Telecom Italia has sent to the SB the reports on the indicators relative to December 2011 and January and February 2012.
With Determination no. 16/2011 of 5 July 2011, the SB had started an in-depth study concerning the critical issues that had arisen regarding certain indicators. In September Telecom Italia provided a response to the requests made by the SB. With Determination no. 21/2011 of 12 October 2011, the SB arranged an extension of the analysis in order to study in greater depth certain aspects which emerged from the information and the data made available by Telecom Italia. Following further verifications, through Determination no. 5/2012, the SB approved the final technical report of the Supervisory Office during the Council of 8 February 2012. The report shows the compliance of the KPI values analysed with the principles of equal treatment, reserving the right at the same time to start additional verification activities in the future concerning any anomalies which may be encountered in the values of the performance indicators.
Undertakings Group no. 5
(transparency guarantees of the Technical Plans for Quality of the fixed access network)
During February, Telecom Italia sent to the SB the 2011 annual report of the Technical Plan for Quality on the fixed access network and the final balance of the IV Quarter 2011. It can be deduced from these documents that the objectives set by the Annual Plan were basically complied with, and in some cases exceeded. Only in some cases, such as the reclamation of the cabinets, the objectives were not fully reached.
Telecom then sent the 2012 Annual Plan, together with the Programme for the IQ 2012, as provided by the Undertakings Group No. 5; the principal projects and the objectives established for 2012 are basically a continuation of those for 2011.
Telecom Italia also sent the progress report as of the fourth quarter of 2011 of the evolution over time of the stations compared to the levels of quality scheduled, provided for the RTG and ADSL services on a national and provincial basis.
Lastly, Telecom Italia submitted to the SB the document containing the following final data at December 2011:
- Division of the trouble tickets by breakdown reason subdivided by individual regional area and for Retail and Wholesale segments broken down for every geographic macro area;
- Percentage of repeated breakdowns divided by geographic area;
- Percentage of breakdowns resolved by the second day following notifications divided by OLO segment and Retail;
Undertakings Group no. 6
(transparency guarantees of the Technical Plans for Development of the fixed access network)
During the first quarter of the year, Telecom Italia sent to the SB:
- the final balance values of the fourth quarter of 2011;
- the 2011 annual report;
- the programme relative to the second quarter of 2012;
- the 2012-2014 multi-year Technical Plan;
Undertakings Group no. 8
(integration of the regulatory accounting and determination of the transfer charges)
During a special meeting held on 8 February 2012, Telecom Italia explained to the SB the content and implementation methods of Resolution No. 678/11/CONS bearing the Guidelines on Regulatory Accounting of fixed line network and service contracts, with particular reference to its impact on the subjects covered in the Undertakings Group No. 8.
With this Resolution, published as a result of Resolution No. 2/11/CONS which initiated a specific public consultation on the matter, the Authority outlined the instructions that Telecom Italia must follow in the preparation of the documentation relative to the subjects covered.
In particular, during the first months of 2012 Telecom Italia must deliver to the AGCom the Regulatory Accounting documents for the 2010 financial year. Telecom is in the process of defining the 2011 and 2012 Service Contracts between Open Access and the Business Departments which contain the technical and economic conditions of internal transfer of the SPM access services.
Undertakings Group no. 9
(measures relative to the new generation access networks)
As regards Undertakings Group No. 9, the SB has approved Determination no. 3/2012, which orders the start of analysis and evaluation activities regarding the application of the Undertakings to the intermediate access services supplied through new generation networks. This initiative is part of the process of progressive definition of the regulatory framework on the NGAN networks. Such framework views as central element of the reference quarter the publication of Resolution No. 1/12/CONS which includes the identification of the regulatory obligations relative to access services to the new generation networks.
Undertakings Group no. 12
(obligation to signal the activation of services not requested)
Telecom Italia has sent to the SB the document containing the information relative to the fourth quarter of 2011, which shows that during the period in question the Open Access technicians did not record any activation of services which were not requested.
Presentation of the 2012 Annual Report
During the conference “Governance of the networks and digital agenda” held at Palazzo Barberini in Rome on 20 March 2012, the SB presented the Annual Report on the activities carried out during 2011 and the principal activities scheduled which will be started in 2012.
Speeches were held by Franco Bernabè, Chairman of Telecom Italia, Corrado Calabrò, Chairman of AGCom, and Stefano Parisi, Chairman of Confindustria Digitale.
In his opening report, the Chairman, Prof. Giulio Napolitano, outlined the activities carried out during the three-year period: the SB met 37 times, held 24 formal hearings and over 50 informal meetings. As a result of these activities, the SB has issued 81 Resolutions and sent Telecom Italia more than 100 recommendations.
The Chairman also underlined the positive relations that the SB has both with the Operators (both the incumbent and the OLO) and the sector Authority, the AGCom.
The Chairman then identified the subjects which the SB will continue to work on for the duration of his mandate, including the problems relative to equal access to the new generation networks.
The Annual Report and the documents of the Conference were published on the SB website. The document, approved by the Council of the SB which met on 19 March 2012, explains in detail the activities conducted during the 2009-2011 three-year period, with particular reference not only to the analyses started following the notifications received from the alternative Operators, but also those in-depth activities, such as the “KO Retail Project”, realized at the initiative of the SB itself.
Furthermore, the report contains the lines of intervention and the development prospects as regards the future activities of the SB and its monitoring function regarding the actual realization of the Undertakings.
Complaints by alternative operators
Complaint S02/11 Fastweb / Evaluation of the clauses included in the contracts stipulated between Telecom Italia and the contracting firms compliance with the principle of equality of treatment in accordance with Undertakings Group No. 2
Referring to the access procedures of the OLOs to the data and the information in the possession of the Wholesale Department of Telecom Italia, pursuant to Resolutions No. 21/2009 and No. 4/2010, the Operator Fastweb requested certain data, held by that Department, for purposes of jurisdictional action and protection. Telecom Italia refused to provide the aforementioned information since they considered that it fell outside the case in point mentioned above, and since in addition these requests concerned information considered already in the possession of the OLO. Following the expression by Fastweb that the equality of treatment principle was being violated, the SB started a verification activity on the matter, opening Complaint S02/2011.
In October 2011, the Operator Fastweb asked Telecom Italia for specific information held by the Wholesale Department, using the specific procedure prepared by the historical Operator for purposes of jurisdictional action and protection.
The information requested by the OLO concerned in particular the contracts stipulated between Telecom Italia and the contracting firms for the provision of the unbundling activation service for Fastweb customers and for the activation of services to their retail customers, including the payments agreed on.
Telecom Italia objected to this request refusing to provide the data in question, citing among the reasons also the fact that the alternative Operator already had them, since the documents had already provided previously in the context of an arbitration.
In a subsequent letter dated 16 November 2011, Fastweb subsequently reiterated the request for information.
The SB listened to both Companies at a hearing; subsequently, while acknowledging the reasons expressed by the incumbent regarding the lack of pertinence of the request for data submitted, it urged Telecom Italia, with Determination no. 23/2011 of 2 December 2011, to send additional information regarding the questions raised by the OLO.
In particular, the SB ordered the start of verification activities believing that the facts and the questions raised by Fastweb could merit specific attention, since they were likely to compromise, if verified, the actual compliance with the principle of internal-external parity in the context of the contract terms and conditions established by Telecom Italia with supplier firms.
This was in particular referred to Undertakings Group No. 2, as regards the suspicion claimed by the OLO that Telecom Italia applies contract conditions, both financial and technical, that are different with contracting firms depending on whether the services concern Retail customers or Wholesale customers.
Because of this, the SB opened, also following the technical report of the Supervisory Office, Complaint S02/2011, in order to verify the actual compliance with the principle of equality of treatment, by starting with Determination no. 27/2011 a special investigation.
Following the extension of the deadlines for the conclusion of the investigation as provided by Determination no. 2/2012 and the analyses of the case, including those conducted on the subject by the Supervisory Office, the SB proceeded, with Determination no. 6/2012, to close the proceedings, not recognizing, in the conduct of Telecom Italia, violations of the Undertakings.
Certification of data
The certification project of the Key Performance Indicators (KPI), started in 2010, was conducted by Telecom Italia at the request of the SB and under its supervision: its goal is to validate the mechanism of extraction of the data generated by the Monitoring System of the performance for the SPM services of Telecom Italia as regards the Trouble Tickets and the Work Orders. In 2011 a first group of indicators was validated; the remaining KPI will be validated in 2012.
The SB ordered, with Determination no. 4/2011 of 8 February 2011, the start of the verification activities concerning the correctness of the basic data necessary for the calculation of the performance indicators. The verification, which covered a period of 12 months starting in January 2011, was to be conducted by the staff of the Supervisory Office, which would report the results to the SB on a quarterly basis. At the conclusion of the verifications, the SB was to prepare a final report bearing the evaluations concerning any corrective actions to be taken.
Every monthly extraction reviewed a sample of 386 Work Orders for the delivery process (KPI 1 indicators) and 947 Trouble Tickets for the assurance process (KP2 indicators), for a total of 1,333 items.
Following the extraction and analysis operations conducted during 2011 on the data used by Telecom Italia for the preparation of the Monthly Reports on the indicators, the Supervisory Office concluded the analysis activity in January 2012, with the extractions of the data referred to the months of October, November and December 2011.
The records relative to the sample identified in accordance with the rules established by the Certifier were periodically extracted from the database, in the presence of Open Access and the Supervisory Office.
The Supervisory Office was able to verify how, from the comparisons made between the data extracted from the database used for the calculation of the indicators and the corresponding data present on the operational databases, there were no critical issues relative to the data presented. However, in order to investigate further the reasons for the failed population of a field encountered on a limited number of records, it was considered appropriate to carry out special on-site verifications.
Therefore, following the verifications conducted on the year 2011, in January 2012 representatives of the Supervisory Office verified, at the competent Open Access territorial organisation - AOL Sardinia, the integrity of certain records concerning formally incomplete Work Orders: no critical issues were encountered in the check: the anomaly reported was due to the delayed alignment between the systems on accessory data which do not compromise the execution of the calculation formulas of the KPI.
The scheduled work was concluded with the January verifications: at the conclusion of the verifications performed, the Supervisory Office prepared a final report which was approved by the SB during its meeting of 8 February 2012 with Determination no. 4/2012.
This report shows that the Supervisory Office did not encounter any anomalies relative to any discrepancies between the data taken at random together with the Open Access representatives from the Telecom Italia systems and the same data coming from the operating databases; the Office therefore considered that the positive results of the verifications can confirm the validity of the certification system adopted by Telecom Italia, and consequently the reliability of the data used for the calculation of the KPI currently calculated in the context of the Undertakings Group No. 4.
The analysis of the Wholesale and Retail KOs
The "Wholesale KOs Analysis Project" was started in 2010 and permitted an in-depth analysis to be carried out on the rejection reasons of the Wholesale Work Orders; the objective of the Project was to obtain a more in-depth understanding of the rejection reasons of the Delivery process used by Telecom Italia until the transition to the New Delivery Process (NPD). The results of the work performed, which allowed areas of possible improvement in the process to be identified, can be used in the evaluations of the benefits stemming from the introduction of the NPD. At the outcome of the analysis on the Wholesale KO, the SB ordered the start of a similar analysis on the KOs relative to the offer of Telecom Italia Retail services.
With Determination no. 14/2010 of July 2010, the SB approved the guidelines for the execution of the in-depth activities into the reasons for rejections of the Wholesale Work Orders.
The analysis initially involved the Work Orders issued from 1 January 2009 to 31 March 2010, and closed by 31 May 2010, relative to the alternative Operators, on bitstream, LLU and WLR services separated by reason and distributed temporally based on the issue date of the Work Order.
During the Council of 15 December 2010, the SB approved with Determination no. 22/2010, the Final Report containing the results of the Project. At the outcome of the analyses conducted, this Final Report identifies certain areas of improvement in the Delivery process, and suggests possible interventions which could be made to it.
Moreover, the same Determination no. 22/2010 includes some recommendations directed at Telecom Italia relative to possible solutions and initiatives which could create a qualitative improvement in the processes and greater transparency; in particular, the SB asked Telecom to prepare a report on a quarterly basis which includes the information necessary to the SB to evaluate the results of the activities started also as a result of the recommendations cited.
With Determination no. 5/2011 of 8 February 2011, the SB ordered the start of an analysis, similar to the one just described, to be conducted on the reasons for rejection of the Work Order relative to the Retail services offered by Telecom Italia.
This analysis was conducted by the Supervisory Office, which, by mandate of the SB, has thus completed the analysis of the causes for rejection of the Work Orders already started in 2010 on the Wholesale segment. It turned out to be possible to perform a joint analysis of the two segments which permitted evaluating the actual internal-external equality of treatment concerning the management of the Delivery process.
After receiving the necessary specifications from the SB to start the study of the Work Orders rejection reasons, Telecom Italia provided the necessary data to start the analysis.
With Determination no. 26/2011 adopted during the SB meeting of 14 December 2011, the SB published the final report which illustrates the interventions carried out and the results achieved.
The analysis took into consideration all the Work Orders of 2009, 2010 and the first half of 2011.
As in the analysis carried out, no cases of inequalities of treatment emerged as regards the quantitative level of rejection and the relative causes between the Retail WO and the Wholesale WO. At the same time, a slightly greater process efficiency is noted in favour of Telecom Italia as regards the number of Work Orders necessary to satisfy a customer request: this difference should progressively disappear as all the OLOs adhere to the New Delivery Process.
During the Councils held during the quarter, Telecom Italia gave the SB the progress of the surveys performed concerning the Network and Customer KOs of the asymmetrical bitstream Delivery.
The pre-alarm system for signalling exchanges at risk of saturation ("Amber Light")
At the outcome of the results of the analyses conducted concerning the closing of approximately 500 bitstream service providers due to saturation of the network pursuant to Complaint S01/2010 by the OLOs, the SB recommended to Telecom Italia that they arrange a shared mechanism of notifications of the status of pre-alert for the stations close to saturation.
During the first quarter of 2012, the monitoring of the pre-alert system (so-called “amber light”) and of the saturation status of the stations with ATM technology which provide bitstream services continued.
During the period in question, a marked increase was recorded both in the number of exchanges in amber light status and in the number of saturated exchanges. In particular, the stock of the saturated exchanges served by DSLAM ATM 7 Mbit/s reached 109 units at the end of March (+53% compared to the value recorded at the beginning of the year), while on the same date the exchanges under amber light were 617 (+21% compared to the value at 1° January 2012).
These increases can be attributed to the obsolescence of the ATM technology which, following the declaration by the firms supplying the devices that they would be ending production, made unavailable the equipment necessary to expand the DSLAM.
The monitoring also highlights that of the 109 exchanges declared saturated, 67 (equal to 61%) have DSLAM available in Ethernet technology.
Analysis of the deteriorations
In 2011, the SB opened Complaint S01/2011 following the problems reported by the Operator Welcome Italia regarding alleged problems of saturation of the Telecom Italia exchanges in the supply of the bitstream service.
At the conclusion of the in-depth studies conducted on the matter, the SB closed the Complaint, asking Telecom Italia at the same time to provide every month the progressive data relative to the percentage of deteriorated systems repaired within the time limits established in the Service Level Agreement, consistent also with the contents of Resolution 105/10/CIR.
At the closure of Complaint S01/2011, following Determination no. 20/2011, the SB asked Telecom Italia to provide on a monthly basis the progressive data relative to the percentage of degraded systems repaired within the time periods established in the Service Level Agreements starting from April 2011.
Telecom Italia sent the requested data to the SB: the final value of 2011 shows a significant improvement in performance and a reduction in the phenomenon of degradation.
Other activities of the Supervisory Board
- During the Council of 18 January 2012 the SB approved, with Determination no. 1/2012, the Quarterly Report on the activities carried out and the work agenda relative to the fourth quarter of 2011.
- During a hearing held in January, Telecom Italia explained to the SB the Wholesale offers on fiber of the Operator and the new "GIOIA" cartographic system which allows the access requests to the installation infrastructure formulated by the OLOs to be managed.