Telecom Italia Wins Dismissal of Interim Requests by SMT

Cleary Gottlieb obtained the dismissal of San Marino Telecom S.p.A.’s (“SMT”) requests for interim measures against Telecom Italia with respect to the liberalization of electronic communications markets in the Republic of San Marino. SMT, a new entrant in San Marino’s electronic communications markets, sued Telecom, Italy and San Marino’s largest telecommunications operator, for alleged discriminatory practices aimed at preventing its entry in the newly liberalized local markets of the Republic of San Marino.

This case was very complex, because for historical reasons in the Republic of San Marino two different national numbering plans apply: SMT customers use a country code assigned by the competent UN agency to the Republic of San Marino (“+378”), while other operators’ customers established in the Republic of San Marino use the Italian country code (“+39”). Consequently, voice calls between Telecom and SMT customers are treated and billed as international (even though they originate and terminate in the same country). Local authorities have not yet opted for the exclusive application of the local national numbering plan and the dismissal of the Italian codes.

With support from the local administration, SMT claimed that all of the many problems arising from the above situation were in fact the result of Telecom’s deliberate choice to treat SMT numbers as international. With an order dated November 11, 2008, the Milan civil courts upheld Cleary Gottlieb’s arguments that Telecom’s tariffs were not discriminatory. On appeal by SMT, Telecom also demonstrated that the dialing of the international code is not abusive and that the Italian Foreign and Economic Development Ministries have recently decided to negotiate an international agreement with the Republic of San Marino in order to solve this peculiar situation. As a result, the Milan civil court dismissed SMT’s appeal.