SERVICE CONTRACT BETWEEN THE MINISTRY OMMUNICATIONS AND RAI-RADIOTELEVISIONE ITALIANA S.P.A.

Considering article 3 of the Convention between the State and RAI-Radiotelevisione Italiana S.p.A., adopted by the presidential decree of March 28, 1994 - hereinafter referred to as the Convention - which, for supplements to it, refers to a three-year service contract and identifies its scope;

considering article 1 of law no. 650 of December 23, 1996, which maintained the effects produced by the above mentioned article 3 of the Convention and the legal relations established by it;

considering article 2, paragraph 5, provisions 3 and 4, of law no. 122 of April 30, 1998;

considering that the service contract adopted by the presidential decree of October 29, 1997 will expire on December 31, 1999;

considering, therefore, the need to sign a new service contract;

between the Ministry for Communications, hereinafter referred to as the Ministry - represented by its Secretary General Eng. Giorgio Guidarelli Mattioli - and RAI-Radiotelevisione Italiana S.p.A., hereinafter referred to as the licensee, with registered office in Rome, legally represented by the President of the Board of Directors, Prof. Roberto Zaccaria, who was given a power of attorney to this end by the RAI Board of Directors;

whereas

the radio and TV sector is undergoing a phase characterised by deep changes which have an impact on the patterns used to interpret the activities and therefore, in the long run, also on the industrial arrangement and organisation of the companies working in this sector;

the progressive integration of markets leads to include a significant and growing share of the broadcasters' activities (particularly the rights having a higher commercial value) in a "global circuit", so that now the costs and the availability of these means of productions are decided according to market logics which tend to limit their use and enjoyment;

the technological progress of the communications system - characterised by the convergence of the telecommunications sector and the radio and TV sector - is also causing the elimination of national borders and - besides the traditional supply - is favouring the development of new broadcasting tools, new forms to use the media and new ways to fund the supply;

in the establishment of a post-industrial society and economy, a central role is played by the production systems and the exchange of information; the prevailing intangible nature of the productive activities; the radical transformation of the social cohesion and inclusion mechanisms; the change in the very forms of civil society and politics;

said changes raise the issue of access to information, culture, training and communication networks as a prerequisite for the fulfilment of people's rights and the functioning of the democratic system;

the creation of communication infrastructure, the achievement of literacy in the new communication forms, and the production of cultural identity can be fundamental elements for the Country's modernisation and the growth of its economy;

considering

that the mission of public service entrusted to the licensee is made up of a systematic and indivisible set of tasks and duties, defined by the provisions included in the general and specific laws regulating these matters and in the Convention granting the licence, and further specified in this service contract and in the additional agreements reached with the Public Administration, taking into account the guidelines set by the Parliamentary Committee for the general guidance and monitoring of the radio and TV services pursuant to the regulations in force;

that the public service activities in the radio and TV sector are mainly designed to enrich the education dimension of the cultural identity viewed as a set of values, languages and behaviours - particularly those enshrined in the Constitution - belonging to the national community and open to the innovative contributions stemming from the European dimension;

that in the new economic and social scenario, the licensee shall still ensure - also under new forms and according to the criteria of internal pluralism, completeness and objectiveness - the reaching of those information, cultural and social goals which traditionally have characterised it as against the other companies operating in the communication sector;

that it is a precise duty of the public radio and TV system to allow the expression of the multi-faceted realities of the labour world and of the emerging social and cultural situations which find themselves in a weak position in terms of information tools - with specific reference to the situations regarding issues such as voluntary work, equal opportunities, environment, elderly people, migration and North-South relations;

considering

that the public service general aims can be summarised as follows:

to ensure an unbiased, complete and independent information service in the framework of the pluralistic system of all those working in the communication sector;

to allow the widest expression of the various political, social and cultural demands of society and contribute to the creation of a critical conscience;

to promote - by also paying specific attention to the issues of public spiritedness and the history of the national community - the Country's full cultural identity, lifelong education, multimedia literacy, people's free access to events of general interest so as to contribute to enrich the content and the compliance with the fundamental right of citizenship;

to promote the Country's productive, creative and cultural abilities, thus favouring a balanced development of the national audio-visual communication system - and concurrently assisting the development of the European system in order to avoid the technological progress and the multiplication of offers leading to the marginalization of one system or the other;

to promote the technological development of this sector through initiatives capable of favouring multimedia innovations and experiments;

to promote the spreading of the Italian language and culture all over the world- also through innovative tools, ways and means;

considering

that the above stated general aims include the following more specific objectives:

to test new radio and Tv signals broadcasting and dissemination systems, particularly in the sector of digital technologies;

to develop a kind of supply capable of steadily increasing the overall quality of programmes; to this end the licensee can avail itself of systems to measure specific quality parameters and indicators and to monitor the spontaneous opinions of the audience and of consultative bodies such as the Consulta Qualità (Quality Consultative Body), aiming at checking and upgrading the supply;

to develop a complete and multi-faceted supply, capable of reaching diversified objectives and meeting the audience different needs;

to promote and spread the knowledge of the Italian language and culture all over the world by describing the different aspects of the Country's entrepreneurial, cultural and social realities;

to interpret the new needs linked to the local and territorial dimension and the issues which characterise the complex nature of the various social needs - also through the licensee's more appropriate use of its regional network to allow the effective expression of the various demands coming from the various regions in order to enrich also national programmes;

to operate in full respect for language minorities and to enhance them;

considering

that the licensee develops the quality of the public service in all its productions and is committed to pursuing programme quality objectives also as a parameter to compete on the audience market;

that - in order to perform its public service mission - the licensee carries out its activities at regional, national and international levels according to efficiency, productivity and cost-effectiveness criteria and according to an entrepreneurial autonomy logic;

that - in the areas of activity not subjected to the public service tasks and constraints under the above stated provisions which define its scope - the licensee operates according to a competition logic, in line with the above stated general aims and in compliance with the general laws regulating these matters;

that the results in terms of effectiveness and competitiveness reached by the licensee outside the scope of the public service tasks are an essential element to ensure efficiency and cost-effectiveness also in the performance of said tasks;

that - not calling into question the unitarian nature of the public service - the licensee defines its own organisation structure, in line with the national and Community provisions, in order to ensure the necessary transparency while using resources through appropriate organisation, accounting or corporate forms making a distinction between the activities funded by state resources and those funded by the market;

now, therefore, in consideration of the foregoing, the Parties hereto agree as follows:.

1. The licensee shall perform the services under licence at the terms and conditions envisaged by the Convention and this contract, in compliance with the provisions and the principles enshrined in the laws and regulations governing the telecommunications and radio and TV broadcasting sectors, as well as with the EU directives, the international agreements and the technical rules issued by the relevant national and international bodies.

2. This contract is reached by referring to the medium term macro-economic framework as defined in the Government planning documents, with specific reference to the Gross Domestic Product trend, the inflation rate, as well as other possible specific parameters of the radio and TV sector.

3. This contract defines the ways to reach the objectives set in the Convention as regards the industrial and financial organisation and the corporate productivity, as well as the improvement of the service quality, by also considering the best results (where published) achieved by the corresponding European realities which can be compared to the licensee - with specific reference, by way of example, at least to the following macro-areas: level and trend of the operational profitability; level and trend of the financial indebtedness; structure and trend of the various kinds of costs pertaining to the operational management; level and trend of the productivity of the main means of production used; technical and qualitative characteristics of the service granting; average level of the subscription fees, where applied.

1. As from the entry into force of this contract, the licensee shall commit itself to providing a steadily updated TV programs supply, on the basis of the audience and society needs, through a process to re-define the product patterns by means of an innovation and experimentation activity which takes into account specific periodical program quality indicators and of the monitoring of the audience spontaneous opinions, also availing itself of the Consulta Qualità. It shall also ensure adequate quality levels and a complete, honest, unbiased and true information in any form of information, including news bulletins. The licensee shall commit itself to enhancing its education and information mission, by strengthening the structure of its supply of information, culture and entertainment along the lines of the upgrading of its products linked to the public service characteristics. Special attention shall be paid to the issues of computer science literacy and education to communication.

2. While strengthening its productive, creative, education and cultural role - which uses as a guideline the concept of quality involving all TV genres and all sectors ranging from the conception and the design to dubbing - the licensee shall ensure the differentiation of programs on the different TV channels by terrestrial broadcasting, mainly taking into account the following TV macro-genres:

1. news bulletins: daily national and international news programs - through the licensee journalists - which can ensure the necessary coverage all day long and are not interrupted by commercials;
2. information programs: reports, surveys, reportage, programs on topical issues, debates, etc. In thic connection we shall also mention the in-depth reports carried out by the various channels and journalists and all the information programs devoted to the news on the institutional bodies activity, as well as Regions, local authorities and Parliament;
3. culture: programs dealing with the issues of science, history, arts and the environment, which appropriately cover the most significant events in the sectors of theatre, cinema, music and opera, literature, performing arts and ballet, education, teaching and vocational training. In this connection we shall also mention movies and fiction programs (TV movies, series, miniseries, serials, etc.) produced in Italy and in Europe, as well as those having a particular artistic value or those inspired by clearly social issues and documentary films. The broadcasting quotas shall comply with the regulations in force;
4. service programs: programs and reports on topical issues and on social matters which deal with issues of general interest - by means of differentiated languages and formats - with specific reference to the community needs (for example elderly people, health, the environment, pensions, tax issues, housing, the relations between citizens and the Public Administration) and to the needs of the weakest walks of society. In this connection we shall also mention the religious programs, the special news bulletins for deaf people and the programs devoted to specific diseases having a social impact. Among the "service" TV programs we shall also mention "entertainment" programs (such as shows, musical programs, variety shows) provided they are occasionally broadcast and are clearly devoted to specific social issues;
5. programs for children and young people: specific programs considering the needs of infants and young children and programs - involving all TV genres - targeted to children and young people, including those programs containing purchase products (such as cartoons, fiction, etc.) where are destined to be watched with their own families;
6. sport programs: programs and reports of the national and international sport events regarding both the most popular and the less popular sports, with a view to enhancing the social and education role of sports.

3. The licensee shall commit itself to devoting at least 65% of its total yearly TV programs and at least 80% in the case of the third channel - programs classified by genres according to the current specifications used by the licensee - to the programs under sub-paragraphs a), b), c), d), e), f) of paragraph 2 and broadcast in hours recording a good audience, including "prime time". The programs under the previous paragraph shall be broadcast in all periods of the year and in all hours, with specific attention paid to the period of time between 7 a.m. and 11 p.m., and sub-divided in a balanced way among the various channels, including the one recording the widest audience.

4. With reference to the TV programming, worked out in compliance with the principles enshrined in this article and in the subsequent articles 5 and 6 - the licensee shall provide for each six month period (within the three subsequent months) a detailed document for each terrestrial TV channel showing the number of hours really broadcast and the percentage out of the total hours in the period concerned of each of the following kinds of TV programs: news bulletins, information programs, sport programs, culture, programs for children and young people, service programs, movies and fiction, documentary films, entertainment programs. The licensee shall also commit itself to yearly providing a report on the criteria to allocate the resources stemming from the subscription fees to each channel. A similar report shall be also provided for each period on the average daily hours broadcast. On the basis of the data under this paragraph and within the limits set by the current regulations, the Parliamentary Committee for the general guidance and monitoring of radio and TV services can submit grounded proposals to the licensee on the implementation of this article.

1. The licensee shall commit itself to defining for each channel a specific public service mission in the radio sector; to retain and strengthen the guidance and stimulus role played by the modernisation process in the scenario of digitalisation and multimedia activities; to broadening the content of the supply by testing new formats with reference to the audience requirements - also in view of the starting of the digital audio broadcasting (DAB) - also trough an appropriate experimentation activity in broadcasting. The licensee shall also commit itself to ensuring a diversified and upgraded supply responding to the Country's cultural demands which can perform the typical education, information and entertainment mission of the public service, to the benefit of the whole radio broadcasting system both in Italy and abroad.

2. In the framework of its broadcasting, the licensee shall envisage the use of the cable networks being built in the large metropolitan areas and the use of satellite channels in order to achieve the objective of a wider radio broadcasting.

3. The licensee radio programs mainly hinge around four large kinds of supply within which more specific products can be identified also in order to allow a better enjoyment of the supply and to assimilate the issues and content proposed properly:

1. information programs: radio news bulletins, in-depth reports on specific matters, reportage, surveys, "round-table discussions" and debates, reports on the institutional bodies" activity, programs and reports devoted to the various sports;
2. culture and society: programs linked to science, literature, theatre, music - classical music in particular - radio fiction, documentary programs and historical programs which can also enhance the potential of the licensee archives; reports and "talk shows" which - by dealing with social issues and targeting also young people - can establish the necessary link with the people and the territory;
3. entertainment and popularisation programs: shows, games, musical comedies and soft music in all its forms. In this connection we shall also recall programs to delve into social, political and cultural events carried out with innovative forms and tools capable of enlarging the debate on the Country's cultural evolution;
4. service programs: programs and reports of public interest and use devoted both to issues of specific social interest (health, work, social security, tax matters, etc.) and targeted to specific kinds of audience (blind people, elderly people, outcasts, farmers etc.). In this connection we shall also mention the religious programs and all the initiatives devoted to security, safety and in more general terms to the improvement of the standard of living or the quality of life.

4. With reference to the radio programming - worked out in compliance with the principles enshrined in this article, paragraphs 1 and 3 - -the licensee shall provide for each six month period (within the three subsequent months) a detailed document showing the number of hours really broadcast and the percentage out of the total hours in the period concerned of each of the following kinds of radio programs: news bulletins, information programs, culture and society, entertainment and popularisation programs, service programs. A similar report shall be also provided for each period on the average daily hours broadcast.

5. With a view to keeping the current service of radio programs wire broadcasting - pending the development of new cable broadcasting technologies - the licensee shall still provide for the maintenance of plants and the necessary verification with the phone service operators of the issues related to the compatibility with the other signals passing through the equipment and the media of said operators.

1. In the framework of TV broadcasting we shall also include the Televideo service which broadcasts information, culture, entertainment, sports, economy, service information, sub-titles for deaf people and for foreign communities. On the regional channel Televideo broadcasts also regional or local reports. While respecting the autonomy and independence of its journalists and in compliance with the guidelines set by the Parliamentary Committee for the general guidance and monitoring of radio and TV services related to the public service programs, the licensee shall devote - also in its Televideo services - specific attention to the experiences of associations and voluntary work on the basis of the regulations adopted by said Parliamentary Committee in its sitting of April 29, 1999. The possible news published in the Televideo services against consideration shall be indicated as such.

1. In compliance with the prevailing right to the protection of the minors' physical, psychic and moral development, the licensee shall commit itself to carrying out - within the TV broadcasting quotas set in article 2 and by means of authoritative experts - programs for children and young people by respecting their needs and also considering the guidelines set by the relevant institutional bodies in charge of the protection of minors and the self-regulation code related to the relationship between TV and minors adopted by the licensee. In compliance with said right, also in the broadcasting hours not specifically devoted to minors, including the prime time, the licensee shall pay specific critical attention to the violence and intolerance messages conveyed by the TV directly or indirectly and to their influence on minors and the weakest people. The licensee shall also commit itself to carrying out a qualitative and preliminary control on the content, the time schedule and the ways to broadcast commercials so that they can respond to criteria of responsibility and respect for children and they do not undermine the balanced development of their personality. With a view to ensuring the understanding of the commercials message also by young children, the licensee shall commit itself to marking - within the broadcasting under this paragraph - the advertising with perceivable visual and sound signs and avoid TV promotions made by the programs anchormen. In particular it shall commit itself not to broadcasting promotional programs and trailers running counter to the above stated principles during the hours recording good audience by children and young people and during the programs devoted to them or just before and after these programs.

2. In order to implement the commitments under paragraph 1, the licensee shall develop specific projects - carried out also thanks to authoritative experts and consultative bodies on the quality of programs - which envisage also the testing of new programs, besides the already produced special news bulletins for children and young people.

2-bis For the purposes of this article, the licensee can avail itself of committees composed of authoritative experts, 55% of whom proposed by the National Users Council and chosen among parents, educators and citizens. These bodies shall be also in charge of expressing opinions on the programs for minors and the compliance with internal rules and provisions designed to their protection.

2-ter The licensee shall experiment broadcasting devoted to children and families and submit to the Parliamentary Committee for the general guidance and monitoring of radio and TV services the bi-monthly report under article 1, paragraph 5, of law no. 650 of December 23, 1996, informing it of the broadcasting guidelines for minors that it intends to follow and the initiatives adopted.

1. Within the broadcasting quotas set in articles 2 and 3, the licensee shall commit itself to granting adequate coverage and to broadcasting special programs devoted to disabled people and the weakest walks of population, by strengthening the initiatives already implemented pursuant to the 1997-1999 service contract and developing new forms of programs which take into account the needs of this class of people. In particular the number of special news bulletins with the presence of a translator on the screen shall be increased, as well as the special pages devoted by Televideo to deaf people and - thanks to a special software - to the blind people. Sub-titles and audio-descriptions of the programs belonging to the different genres of the TV supply shall be increased, too, also through the use of radio broadcasting in amplitude modulation (AM). Over a three year period this increase shall amount to at least 10% as against the number of hours of programs sub-titled and audio-described in 1999. The licensee shall also commit itself to gradually starting the live subtitling of at least one news bulletin at night time, as well as the audio messages accompanying the social useful information broadcast on the screen. In general terms, the problems of the disabled people and the weakest walks of population shall find wide coverage within the different genres of the radio and TV supply.

In its radio and TV programmes, the licensee shall commit itself to paying special attention - possibly with specific programs in foreign language - to the social, religious and employment problems faced by the foreign citizens living in Italy, both E.U. and non-E.U. citizens, also with a view to promoting integration processes and ensuring adequate information on the migrants' rights and duties.

1. In order to ensure the widest spreading of the knowledge of the Italian language, culture and economy in the international context, as well as an appropriate level of information on the evolution of the Italian society by the Italian communities living abroad, the licensee shall make appropriate TV programs by using the most modern broadcasting means - in the framework of the agreements reached with the Presidency of the Council of Ministers and of other agreements. In the framework of the agreements other than the above stated ones - the licensee shall commit itself to testing new forms of broadcasting for abroad allowing to disseminate the Italian culture also among a wider international public. The relevant State administrations shall be yearly informed of the activities carried out.

1. On behalf of the Presidency of the Council of Ministers and on the basis of appropriate agreements, the licensee shall provide radio services to the Italians living abroad with a view to ensuring the widest spreading of the knowledge of the Italian language, culture and economy in the international context.

2. The radio services are broadcast in short wave through the Rome Prato Smeraldo RAI plants, in night medium wave through the Rome Santa Palomba and Milan Siziano RAI plants, and through relay stations.

3. In order to improve the broadcasting in short wave (SW) and relay - on the basis of a tentative project already adopted by the Ministry - the licensee shall see to the implementation of this project in the framework of an authorisation and an ad hoc funding by the Presidency of the Council of Ministers.

1. In compliance with the provisions of law no. 122 of April 30, 1998, article 2, paragraph 5, during the period of validity of this contract, the licensee shall earmark at least 20% of the total revenue stemming from the subscription fees for investment designed to the production of Italian and European audio-visual works - according to the definitions under paragraph 2 - including films at a share not lower than 40% of the minimum investment share as defined above and cartoons produced on purpose for children education at a share not lower than 8% per year. Should the evolution of the target market show trends which are not in line with said shares - upon a grounded request by the licensee - a committee shall be set up for the revision of the committee composed of representatives of the Presidency of the Council of Ministers, The Treasury Ministry, the Ministry for Communications and the licensee on an equal footing. The above stated 40% share is devoted for at least 51% to the movies to be mainly shown in cinemas.

2. For the purposes of this provision:

1. by total revenue stemming from the subscription fees we mean the proceeds stemming from the shares on the amount of the ordinary subscriptions pertaining to the licensee and regarding the terrestrial TV supply, net of the licence fee;
2. by Italian and European audio-visual production we mean the rights on movies, fiction, documentary films, cartoons, opera, music and theatre produced or co-produced in Italy or within the E.U., with particular attention paid to independent producers as defined in article 2, paragraph 4, of law no. 122 of April 30, 1998;
3. by investment we mean the cost configuration including the amounts paid to third Parties for the rights purchase and the use of works, the costs for external production and those for internal production, and the specific promotion and distribution costs, as well as the editing and publication costs and the additional expenses related to the above stated products.

3. The acquisition of national and European works shall be made in compliance with the European and national regulations and, in particular, in order to promote, protect and foster the national and European production under the premise and previous article 2.

1. In its programs, the licensee shall commit itself to fully protecting confidentiality and people's dignity and supervising the real implementation of the rules included in law no. 675 of December 31, 1996 and of the implementing regulations, as well as its own self-regulation codes.

1. In its programs, the licensee shall take and promote initiatives designed to spreading and enhancing the different cultural and social realities existing at local level, in close co-operation with Regions, Provinces, Municipalities, Universities and cultural bodies, as well as the local radio and TV licensees, also in coordination for a wider spreading at local level.

2. Events directly or indirectly linked to national and regional programs are designed to promoting tourism and handicrafts, quality agri-food production and to enhancing all the initiatives aimed at recognising and disseminating the local cultural identities.

3. The licensee shall promote the reaching of agreements at regional and municipal levels - with charges to be totally or partially born by the bodies concerned - designed to pursuing the aims under the previous paragraphs. Also in order to avoid any danger of misleading advertising and unprecise distinction between the message under the agreements with the subjects pursuant to article 2, paragraph 4, of the ministerial decree no. 581 of December 9, 1993 and the whole of programs - the related broadcasting shall be made outside the usual channel information and news programs and be immediately identifiable as such. In the reaching of agreements an element of balance and territorial dissemination shall be taken into account. The messages broadcast by the local authorities through the Televideo service shall concern information on public useful services.

4. On behalf of the Presidency of the Council of Ministers and on the basis of ad hoc agreements, the licensee shall provide services for the language minorities - as envisaged by law no. 103 of April 14, 1975 - and shall commit itself, however, to ensuring a broadcasting respecting the rights of language minorities in the areas where they live. With reference to the implementation of law no. 482 of December 15, 1999, the Parties shall commit themselves to jointly amending the Convention and the service contract.

5. Pursuant to paragraph 9 of article 3 of law no. 249 of July 31, 1997, the licensee shall envisage appropriate solutions for the Valle d'Aosta and Friuli-Venezia Giulia Regions and for the Trento and Bolzano Autonomous Provinces, jointly with the Autonomous Regions and Provinces, to protect language minorities and in line with a logic of Trans-frontier co-operation.

1. The licensee shall participate in the programmes and initiatives adopted within the European Union and the Council of Europe and shall see to the timely and prompt fulfilment of the procedures connected with the use of the related contributions.

2. With respect to the participation in the programmes and initiatives under paragraph 1, the licensee shall commit itself to yearly submitting a detailed report on the progress of its research and development projects.

3. The licensee shall promote its participation in national and international production programs enhancing the Italian culture and artistic and cultural heritage - with specific attention paid to the initiatives for the Mediterranean basin.

1. In its radio and TV broadcasting, the licensee shall commit itself to devoting specific programs to disseminate information on the traffic and road conditions.

2. The radio news bulletins on the conditions of motorways, ring roads and city junctions and the advice on road safety are broadcast by the Isoradio service during programs repeated by the national channels. The Isoradio service is provided through the network of plants under Annex A.

3. These programs without advertising shall be broadcast along all motorways, ring roads and surrounding areas.

4. The licensee shall commit itself to making the Isoradio service available for all the requirements of advice and guidance to be provided to the Civil Protection Department users.

5. The extension of the Isoradio service - which, where possible, is broadcast on the territory by using the same frequency - to all motorways, ring roads and surrounding areas not reached yet, as well as the improvement of this service broadcasting shall be made through the installation of adequate plants, with the prior authorisation by the Ministry, which will allot the necessary frequencies by also considering the Isoradio service characteristics of public usefulness.

6. In order to pursue the objectives set in paragraph 5 - and also on the basis of demands from the Ministry, upon indications provided by the Ministry for Internal Affairs and the Ministry for Public Works - the licensee shall work out plans to develop the network and submits them to the Ministry.

1. The licensee shall operate the network solely devoted to programs on the Parliamentary proceedings under article 24 of law no. 223 of August 6, 1990, according to the ways and means laid down in law no. 224 of July 11, 1998, through the network of plants under Annex B.

2. The parliamentary proceedings to be broadcast and the criteria to be followed in broadcasting shall be decided jointly with the Speakers of both Houses of Parliament. In general terms the programs shall be marked by strict compliance with the duties of balanced and unbiased information typical of the public service. The licensee is committed to advertising the parliamentary network activity also through its own radio and TV channels, particularly in the framework of the Parliamentary information programs.

3. On the basis of the executive plans submitted to the Ministry and with its prior authorisation - the network under paragraph 1 can be subjected to interventions designed to rationalise plants to be achieved through activities to rationalise the use of frequencies and also to merge the licensee plants. These interventions shall be carried out without downgrading the quality of the service provided and without interfering with other legitimate users of the radioelectric spectrum, with specific attention paid to the protection of people's health and the protection of landscape.

4. The licensee can also broadcast the programs devoted to Parliamentary proceedings through Internet and by satellite in analogue and/or digital format.

1. The coverage degree of the radio and TV broadcasting service shall not be lower than 99% of the population for each of the three national TV channels. The third TV channel shall reach an average regional coverage degree close to 97% of the population.

2. Should real shortcomings be recorded in the service, the licensee shall commit itself to locally extending the coverage to the centres where at least 300 people live, according to the criteria of investment cost-effectiveness and management costs reduction, and on the basis of the provision by the relevant local authorities of the infrastructure necessary to the installation of the broadcasting plants.

3. For the aims under paragraphs 1 and 2 and also for the purposes of article 19, paragraph 1, sub-paragraph a), of law no. 103 of April 14, 1975, and of article 1, paragraph 9, of law no. 650 of December 31, 1996, the licensee can avail itself of agreements and contracts reached with Regions, Provinces, hilly Communities or other local authorities or consortia of local authorities, as well as with other bodies and subjects, which envisage contributions of goods, rights and services.

4. In order to achieve the objectives under the previous paragraphs - also on the basis of the demands from the Ministry, the licensee shall work out plans to extend the radio and TV broadcasting networks and shall submit them to the Ministry every six months.

5. The adjustment of the network of radio and TV analogue broadcasting plants to the prescriptions laid down in the National Plan to allot the TV frequencies shall be carried out according to the programme worked out by the Supervisory Authority for Communications jointly with the Ministry by the deadline set by the regulations in force, with specific reference to the protection of people's health and the protection of landscape.

1. The degree of coverage of the radio broadcasting service provided for each of the three radio channels in frequency modulation (FM) shall not be lower than 99% of the population and the territory coverage shall not be lower than 80% and attach priority to the road system.

2. Where necessary, the licensee shall commit itself to improving the quality of the signal in the areas already covered by the services of the three radio channels in frequency modulation (FM), by enhancing the plants without interfering with the other legitimate users of the radioelectric spectrum or by building new plants after being given the necessary new frequencies, possibly close to the other ones already under licence to the licensee, according to plans worked out to this end, also on the basis of requests from the Ministry and submitted to it every six months.

3. The licensee is committed to enhancing the RDS (Radio Data System) service on the three FM radio channels by introducing the EON (Enhanced Other Network) system, in compliance with the ETSI (European Telecommunications Standards Institute) rules on the basis of the trend recorded on the receivers market and according to the guidelines set at European level, and in order to meet possible needs voiced by the Ministry. Also in relation to European Union projects, the licensee can also experiment the RDS-TMC (Traffic Message Channel) service after informing the Ministry of it.

4. During the activities carried out to adjust the network which is necessary to ensure the coverage degree under paragraph 1 with plants complying with the regulations in force on Electro smog, a temporary reduction in said coverage degree is admissible.

1. The radio broadcasting service in amplitude modulation (AM) shall be carried out through the short wave and the medium wave plants under Annex F.

2. The medium wave service shall be carried out by plants which extend the coverage also outside the national territory. In particular, as to the medium wave radio broadcasting, the licensee shall keep the daily service at a national coverage degree not lower than 95% of the population and 80% of the territory- as regards the first channel. As to the second channel, the national coverage degree shall not be lower than 95% of the population and 78% of the territory estimated on the basis of the internationally recognised parameters. As to the third channel, the licensee shall keep a population coverage degree not lower than 46%, equal to a territory coverage degree not lower than 10%.

3. The licensee has committed itself to submitting to the Ministry for Communications - within December 2000 - the recovery plans to adjust the short wave and medium wave networks to the limits set by the regulations in force on Electro smog.

1. The licensee shall operate the network of plants under Annex G which broadcasts radio services in DAB-T (Digital Audio Broadcasting) in compliance with the ETSI standards.

2. The licensee shall use a dedicated block on the network under paragraph 1 by broadcasting a multiplex of programs whose composition will take into account the usual radio broadcasting and the development of the service at national and European levels, by using the residual broadcasting capacity for "DMB" (Digital Multimedia Broadcasting) multimedia service applications.

3. The licensee shall commit itself to immediately starting the project to extend the network under paragraph 1 in order to reach a 45% population coverage degree by December 31, 2000 and a 60% population coverage degree by December 31, 2001, by ensuring continuity of service and, where possible, continuity of coverage. The extension plans shall be submitted to the Ministry every six months. The starting of the plants shall be preliminarily authorised by the Ministry.

4. The licensee can play the role of carrier as regards third parties' programs through the granting of further blocks or frequencies by the Ministry, according to criteria, timetables and ways and means which shall be agreed upon with it.

5. Where appropriate and in agreement with the Ministry, the licensee shall seek and implement forms of co-operation for the technological testing of the DAB-T service, with specific reference to the use of the L band, including the datacast and DMB multimedia services, as well as the services under chapter IV of this contract, with private companies, firms, consortia and radio licensees, with a view to improving the enjoyment quality of the radio broadcasting in Italy and enhancing all the services provided to users.

1. In order to reach the objectives set in the articles 13, 14, 15, 16, 17 e 18 of this contract, as well as to carry out changes (sites, frequencies and broadcasting systems) of the existing plants, the licensee shall submit - in reasonable advance on the implementation date - an executive plan of the single plants to be built and/or change including the following detailed elements:

1. main radio-electric characteristics;
2. service area;
3. use of the works;
4. estimated costs;
5. nature and characteristics of the kind of broadcasting adopted.

2. Within ninety days since the date when the executive plans are received, the Ministry shall issue a provisional authorisation to operate the plant. Said term can be extended only once for further thirty days if the Ministry requests clarifications and additional information, making supplementary fact-finding activities necessary; the licensee shall answer within thirty days. If the Ministry deems that it cannot adopt the executive plan, the licensee shall be informed of it within ninety days since the date when the plan has been received or within the further thirty days in the event of a request for clarifications and additional information.

3. The testing period - which is necessary to verify the plant radioelectric compatibility with the other plants of the private radio and TV licensee - is of at least two months since the date when the licensee informs of the starting of the plant. After ascertaining said plant compatibility and considering the international co-ordination problems, the Ministry shall issue the definitive authorisation to operate the plant.

4. Every year, the licensee shall inform the Ministry of all the works carried out and of all those works underway under paragraphs 1, 2 e 3.

5. The licensee shall commit itself to enhancing - in terms of broadcasting capacity and according to criteria of cost-effectiveness and operation safety - the fixed links necessary for production and broadcasting under annex H, both by using new technologies and resorting to any new kind of broadcasting available with a view to meeting the service requirements and enabling the Ministry to meet the needs stemming from the introduction of new services in the bands of the frequencies granted to it. The licensee shall eliminate the bounce links when interferences with the radio broadcasting plants are recorded which cannot be solved with rationalisation, streamlining and compatibility works. With reference to the aims under this paragraph, however, the Ministry shall consider the licensee needs, particularly as regards the plants to broadcast regional programs. The licensee shall commit itself to informing the Ministry every year of the works carried out and of those underway.

1. The licensee shall operate - on its own behalf or on behalf of third Parties - mobile links carried out with transportable means installed aboard of parked or moving vehicles operating without interfering with other licensees. Every three months the licensee shall submit a document stating - for each link- the frequency used; the distance of the sections carried out when non moving vehicles are used; the average distance of the sections when moving vehicles are used; the duration of the service provided, also with a view to paying the related fee, according to the legislative and regulatory provisions, as laid down by the Ministry.

2. On its own behalf or on behalf of third Parties, the licensee shall operate links similar to the above stated ones to carry out temporary links among fixed points. Every three months the licensee shall inform the Ministry of the links operated, including the new starting and the end of these links, by stating the frequencies used; the distance of the sections carried out also with a view to paying the related fee, according to the legislative and regulatory provisions, as laid down by the Ministry.

1. Both for national and international licensees and operators, the licensee can provide for the collection of requests for circuits for the transport of TV services from or towards abroad or in transit for abroad and the supply and supervision of said circuits (role of "Programme Booking Centre"), as well as the corresponding accountancy (role of "Accounting Office"). This activity shall not undermine the regular carrying out of the public service under license and the licensee shall submit a yearly report to the Ministry in order to keep it informed.

1. The licensee shall carry out the plants necessary for operating the services under licence in a workmanlike manner, by adopting any improvement allowed by the technological progress.

2. In particular the licensee shall commit itself to complying with the national, E.U. and international technical rules on these matters, by keeping the equipment used in excellent conditions; by carrying out the ordinary and extraordinary maintenance of said equipment timely; by replacing said equipment in the event of deterioration of its performance. The equipment constituting the radioelectric plants bearing the envisaged EC marking shall be type approved or authorised by the Ministry in the cases of provisional operation.

3. The licensee shall proceed to equip its own networks with all the means suitable for remote surveillance and remote control which are necessary for the good operation of the networks themselves.

4. According to the law and the Convention provisions, and with the prior authorisation of the Ministry, the licensee can use its own plants jointly with other licensees and operators. This joint use shall aim at generally optimising the plants - also for environmental purposes - provided that this does not undermine the best carrying out of the public service under license and contributes to the balanced corporate management.

1. As envisaged by the Convention, the licensee shall pay particular attention to the study and testing of new means for production and broadcasting, also through its Research Centre, by actively co-operating in the definition of new international standards. To this end the licensee can reach ad hoc agreements both with the Ministry and with other subjects whose technical competence is well-recognised. The licensee shall commit itself to disseminating - in the whole of its productive structures on the entire national territory - the effects of conception, design and service stemming from the innovation processes defined in the subsequent articles with specific reference to the Southern regions realities.

1. Jointly with the Ministry, the licensee shall provide for:

1. ensuring opportunities and abilities to experiment new forms of multimedia production and new radio and TV languages, also for supplying services abroad (such as Internet services);
2. enhancing the synergies among telecommunications, computer science, information techniques, radio, TV, teletext - also with a view to disseminating the knowledge of computer science and information techniques among the radio and TV public at large, as well as a means to provide services devoted to the areas of social exclusion and marginalization;
3. developing the digital technologies, with specific reference to the entire production chain (for example virtual art-direction, post-production), the filing of radio and TV programs (for example the audio and video library) and broadcasting (for example terrestrial and satellite broadcasting);
4. enhancing the data cast services and developing the multimedia services such as the satellite "fast Internet" service;
5. contributing - in the framework of national research - to define new systems also with reference to the high quality digital TV systems and the electronic cinema applications;
6. experimenting all the modern wide band access systems such as ADSL, the co-axial cable, the optical fibre and the point-multipoint radio;
7. co-operating with the Ministry on projects related to the development of what is known as the "information society".

2. Within the limits set by the current regulations and provided that this does not undermine the public service, the licensee shall also commit itself to extending the range of services managed jointly with national and foreign companies and groups, so as to express its mission as enterprise and acquire new skills and technologies.

3. On each of the intervention areas under the previous paragraphs, the licensee shall submit to the Ministry - within thirty days since the end of each six month period - a report including summary information on the editorial and economic aspects related to these areas, which states and describes their real implementation and spreading.

1. The licensee shall commit itself to implementing the audio and video library project developed pursuant to the 1997-1999 service contract in order to appropriately enhance its own substantial audio-visual heritage and re-use it both in the framework of its radio and TV broadcasting and in the framework of the new thematic channels.

1. With a view to disseminating the knowledge of the Country's language, culture and economy in the international context and promoting technological and industrial innovation - with specific reference to the multimedia convergence processes - the licensee can carry out the following services by using satellites operating on radio broadcasting frequencies, after being preliminarily authorised by the Ministry:

1. satellite decrypted TV services of thematic channels, according to the DVB-S (Digital Video Broadcasting - Satellite) standard adopted at European level;
2. experimental TV services according to the DVB-S standard in 16/9 format, in line with the policy and the measures adopted by the European Union to foster the development of this format;
3. services which use appropriate digital broadcasting and encryption systems of the satellite signal for the protection of the TV programs broadcast, but deprived of the broadcasting rights abroad;
4. decrypted mono and/or stereo radio services with signal digital broadcasting systems;
5. TV and radio services through the use of analogue systems, a round-the-clock information channel broadcasting with digital technology, and capable of testing also simultaneous Internet broadcasting for specific audiences and satellite fast Internet broadcasting;
6. decrypted satellite channels providing public service also pursuant to article 30, among which a service having a great social value.

2. Within its field of competence, the licensee shall commit itself to immediately favouring the full implementation of the provisions under article 2, paragraph 2, of the Legislative Decree no. 15 of January 30, 1999, and of the changes effected to it with Law no. 78 of March 29, 1999 on the "open" digital receiver.

3. As to the markedly social useful programs such as those broadcast by channels such as the "educational" ones or those providing services to volunteers and disabled people, by the channels protecting consumers on agri-food or environmental issues carried out by the licensee directly, on behalf of or jointly with the Ministry for Education, the Ministry for Universities and Scientific and Technological Research, the Ministry for the Environment, the Ministry for Agriculture or other Ministries, and the State University Institutions, the Ministry for Communications can authorise the licensee to carry out experimentation also on ad hoc dedicated channels. After an agreement with the licensee, appropriate broadcasting coverage on said channels can be devoted to programs realised on behalf or jointly with other education and cultural bodies or directly by said bodies.

4. The costs for experimentation under this article shall be fully born by the licensee, unless otherwise provided by law and subject to what laid down in the second sentence of the previous paragraph.

1. The licensee has committed itself to completing the testing plan of the DVB-T (Digital Video Broadcasting -Terrestrial) TV broadcasting technology submitted to the Ministry. The licensee can submit to the Ministry possible extensions of the testing plan. The testing and introduction of DVB-T broadcasting services by the public licensee shall be in line with the regulatory guidelines on these matters, also according to a criterion of equality with the other private licensees and operators which shall be granted equal opportunities by the Ministry in terms of testing and introduction of said services.

2. The licensee shall commit itself to immediately playing the role of carrier according to criteria, timetables and ways and means which shall be defined jointly with the Ministry - also with regard to third Parties' programs - on the frequencies for the DVB-T service granted to it definitively.

3. The licensee can test DVB-T standard TV services in 16/9 format, in line with the policy and the measures adopted by the European Union to foster the development of said format.

4. Jointly with university and research institutes, the licensee can continue to test the MVDS (Multipoint Video Distribution System) systems in the range of frequencies and with the characteristics recommended by CEPT, after being preliminarily authorised by the Ministry. The Ministry shall be informed of the testing results and it can make them available to any Party requesting them.

5. The costs for the tests under this article shall be fully born by the licensee, unless otherwise provided by law.

1. With a view to proceeding to the economic and financial consolidation, to meeting the users' needs and to pursuing the Country's general interests in all its editorial activities, also in line with similar services provided by companies operating in other European Union member states, in the framework of the public service aims as laid down by the European Parliament in its resolution adopted in its sitting of September 19, 1996 - the licensee shall commit itself to performing the activities and services falling within its competence according to proper technical criteria and strict management economic criteria, suitable for reaching the objectives of rationalising the industrial, financial and corporate productivity organisation and arrangement, also in line with the premise to this contract.

2. The public service mission is expressed in a systematic and indivisible set of tasks defined by:

1. special legal provisions on the carrying out of the radio and TV public service and on the licensee;
2. general provisions on the communications system;
3. the license Convention;
4. the service contract;
5. additional agreements reached with the Public Administration and for specific activities in the Country's general interest;
6. guidelines set by the Parliamentary Committee for the general guidance and monitoring of the radio and TV services.

At economic and financial level the funding for these activities shall be ensured - in a certain and appropriate way - by the subscription fees, the refunds of the agreements under sub-paragraph e), as well as further measures linked to the performance of the service. With a view to favouring the process for streamlining the ways and means for the funding of the charges linked to the public service mission, the Parties shall agree on the advisability to gradually group the sources providing state resources to the licensee into two classes, namely the subscription fees and the refunds of the agreements under sub-paragraph e). Within its entrepreneurial choices, the licensee can also allocate commercial resources (including advertising) to fund the above stated activities, as a way to supplement already existing resources.

3. In compliance with the national and E.U. provisions on competition - in order to ensure the necessary transparency in the use of resources while not calling into question the Unitarian nature of the public service - the licensee shall define its own organisation structure through appropriate organisation, accounting or corporate forms making a distinction between the activities funded by the subscription fees and those funded by the market.

4. With a view to pursuing the objectives of efficiency and competitiveness the licences shall define - in the framework of the national and E.U. provisions on communications - the most appropriate forms of organisation structure and arrangement provided that they do not undermine the performance of the tasks linked to the public service license and the quality of the services themselves, thus contributing to the balanced corporate management while not calling into question the Unitarian nature of the public service. In particular:

1. as to the activities pertaining to the provision of the services under licence, the licensee can avail itself of companies controlled by it- after being preliminarily authorised by the Ministry - pursuant to article 1, paragraph 5, of the Convention; the licensee shall ensure the fulfilment of all the obligations envisaged by the Convention and the service contract - also through its subsidiaries - with specific reference to article 5 of the Convention and articles 15, 16 e 17 of this service contract;
2. as to the areas of activity generally connected with the spreading of sounds, images and data or somehow connected with the corporate objective, the licensee shall operate according to criteria of competition on the multimedia global markets, in compliance with the regulation laws and the civil code, pursuant to article 5, paragraph 1, of the Convention;
3. as to the industrial or commercial activities not connected with the exercise of the services under license, pursuant to the provisions of article 5, paragraph 3, of the Convention, the licensee can set up companies or acquire majority stakes, after being preliminarily authorised by the Ministry for Communications, in agreement with the Ministry for Treasury, Budget and Economic Planning. The request authorising the above and, however, any request for the extraordinary investment programmes shall be accompanied by a summary business plan including the following elements: I) description of the activity processes at the basis of the operations; II) criteria for the possible outsourcing of the activities and services adopted to support the decision taken;

III) joint venture contracts;

IV) corporate or management mechanisms to develop the initiative; V) elements for the economic and financial evaluation such as: operational economic profitability, financial practicability and compatibility, profitability for the shareholder.

After making the necessary arrangements with the Ministry for Treasury, Budget and Economic Planning, the Ministry for Communications shall commit itself to issuing the authorisation within 45 days since the date when the request is received. In the lack of denial, this term can be interrupted only once in order to ask the licensee for additional information and data to support the evaluation, and further 45 days can elapse since the acquisition of said information and data.

5. As envisaged by article 32 - and by providing appropriate information - the licensee shall contain its own net financial indebtedness within the limit of a debt/equity (D/E) ratio equal to 0.5% to be surveyed at the end of each financial year after deducting all the amounts for credits vis-à-vis the Public Administration and subject to the extraordinary investment programmes.

6. Except for the effects of the extraordinary initiatives communicated to the Ministry for Communications and the Ministry for Treasury, Budget and Economic Planning pursuant to this contract - in the event of the company recording substantially worse economic or financial results than the estimated ones, said imbalances shall be redressed by means of specific measures taken by the company which shall timely inform the Ministry.

1. The degree of the percentage change in the extra charge due by the ordinary TV subscribers and in the special subscription fee due for possessing radio-receiving or TV equipment outside the family is defined according to the following formula:

Dn = Ip - kP + w

where

Dn is the percentage change in the fee for the year n;

Ip is the objective of planned inflation set by the Government for the year n;

k is the share of the productivity index granted to the benefit of users;

P is the objective of productivity recovery set by the company and defined also considering the results reached by it in the financial years n and n-1;

w is the share of new investment made in innovation and of the additional activities having a public service connotation - to be funded through the subscription fees - carried out by the licensee upon the indications of the committee under the subsequent paragraph 3;

Tn-1 is the economic impact of the investment made in innovation and of the additional activities having a public service connotation under the previous parameter w carried out or being carried out by the licensee during the year n-1;

Fn-1 is the turnover of the subscription fees of the financial year n-1 net of the increases in the unitarian subscription fee;

2. The parameters k and w, ranging between Ø and 1, and the variables P and T shall be set every year by ministerial decree, upon proposal by the committee under the subsequent paragraph 3.

3. The Parties agree that a committee shall be set up and shall be composed of representatives from the Ministry for Communications, the Finance Ministry, the Ministry for Treasury, Budget and Economic Planning and of the licensee on an equal footing. This committee shall be established by a decree of the Minister for Communications and shall draw up and submit - every year by the end of October - a proposal stating the values under the previous paragraph, the criteria used to define them, as well as the classes of investment made in innovation and of the additional activities having a public service connotation to be carried out by the licensee.

4. It is also agreed upon that this committee can propose the appropriate supplements - also extraordinary ones - to the formula defined in paragraph 1 which are necessary to take into account the trend of the means of production markets as against the subscription fee trend, as well as possible changes in the supply or in the composition of the funding sources introduced also by the new regulations on communications which substantially change the current relation existing between the licensee activities and resources.

5. The amounts of the extra charge under the previous paragraph 1 and the amount of the subscription fee for the single kinds of audience shall be yearly set by a decree of the Minister for Communications within the month of November of the year preceding the year to which they refer.

1. For the management and the development of the subscription fees, as well as for their ordinary and compulsory collection, the licensee shall make available to the Ufficio Registro Abbonamenti Radio e TV (U.R.A.R. - TV) of Turin (Office for the Registration of the Radio and TV subscriptions) facilities, means and personnel of the body itself, as well as the necessary premises under the terms and conditions and at the costs laid down by the Convention adopted by the decree of the Finance Minister issued on December 23, 1988, published on the Official Journal no. 25 of January 31, 1988 and subsequent changes.

2. The amounts of the subscription fees to which the licensee is entitled shall be paid by the financial Administration on the basis of the total revenue estimates of the State Budget and of the collected amounts, by means of deferred quarterly part payments and final settlement at the end of each financial year.

3. The Finance Ministry - Revenue Department - shall issue an ad hoc order of payment in favour of the licensee pursuant to article 6 of the Presidential Decree no. 367 of April 20, 1994 so that said amounts are credited to the licensee by the end of the quarter.

1. While pursuing the objectives set in this contract, the licensee shall submit to the Ministry for Communications and the Ministry for Treasury, Budget and Economic Planning - within fifteen days since their adoption:

1. the industrial plans (the economic, financial and investment ones);
2. the financial year economic forecasts;
3. the financial year final balances.

2. By September 30 of each financial year the licensee shall submit a six-monthly report stating the company's final economic and financial results at June 30.

3. In order to provide more exhaustive information on the management trends, by the end of June of each year the licensee shall submit to the Ministry for Communications and to the Ministry for Treasury, Budget and Economic Planning a report on the economic and financial results of the previous financial year which - by using also non corporate sources - shall include also information on:

1. the subdivision of the advertising market, by stating the reference source for the following means of communications: newspapers, magazines, TV, other means;
2. the licensee advertising revenue by medium and kind;
3. the advertising indexes by hour and on the whole.

The economic and financial data under this paragraph shall be submitted by adopting the formal patterns which shall be agreed upon between the Parties within sixty days since the date when this contract is reached.

1. The licensee shall proceed to the re-definition of its organisation structure, in the framework of the national and E.U. provisions on communications, according to criteria of overall efficiency and rationalisation of structures.

2. Every six months the licensee shall appropriately inform the Ministry for Communications and the Ministry for Treasury, Budget and Economic Planning of the initiatives carried out, with specific reference to the impact of the organisation restructuring measures and of the human resources re-arrangement activities.

1. The licensee shall provide the widest co-operation to the Administrations concerned for the purposes of the verifications and checks made necessary by the Parliamentary questions and supervising and inspecting acts.

2. It shall see to respond to the Ministerial requests within fifteen days. This term can be reduced in particular urgent cases.

1. While not calling into question any other control and verification power envisaged by the other rules in force, the Ministry shall have the right to:

1. supervise the fulfilment of the licensee obligations stemming from this contract;
2. supervise the plants and the Ministry officials shall have an unconditional power of access;
3. carry out the verifications necessary for the exercise of the supervision envisaged by the previous sub-paragraphs a) and b).

2. The licensee shall grant access to its own offices to the Ministry officials in charge of the supervision and the checks envisaged by this article and make available documents, means and staff deemed necessary to perform the tasks entrusted to them. At all events it shall be responsible for the reliability and accuracy of the data provided.

3. Every six months the Ministry shall report to the Parliamentary Committee for the general guidance and monitoring of the radio and TV services on the implementation of the service contract in all its different parts.

1. The licensee shall comply with the general provisions on the granting of public services. In particular, the licensee shall:

1. carry out and allow the carrying out of checks on the technical quality and quantity of the service;
2. collect the opinions and assessments of users through questionnaires, interviews and other appropriate mechanisms;
3. make public the yearly verifications on the technical quality standards of the service provided to the users.

2. The additional protocol, enclosed to this contract, which establishes a consultative standing forum for the exchange of views among the licensee, the national Council of users and associations of the third sector, volunteers and consumers shall keep its validity for the whole term of this service contract. The trade unions can be invited to participate in the proceedings of the standing forum for the exchange of views. The results of this exchange of views are reproduced in a document-minutes that the licensee shall commit itself to submitting every year to the Ministry and the Parliamentary Committee for the general guidance and monitoring of the radio and TV services - together with the report on social programs and the association pluralism.

3. Also through the appropriate offices for relations with the public and for complaints - the licensee shall record the audience for the purposes of its own appropriate evaluations on the provision of the radio and TV public service. The telephone services for complaints shall be organised in view of containing the costs for the users. The licensee shall inform the Ministry of the implementation of this paragraph.

4. The licensee is particularly committed to complying with the public service operators' charter of duties and obligations. To this end the licensee shall establish the "Garante dell'abbonato" (subscriber's Guarantor/Supervising Authority) .

1. If, during the period of validity of this contract, laws are issued having a total or partial innovative content for the matters specifically regulated by this contract, it shall be adjusted as a result.

2. Upon request by either Party - if the target scenario records an evolution characterised by differences - as against the scenario set in this contract - higher than the tolerance intervals established by this contract - the necessary updating and revisions shall be made to adjust both the objectives and the amount of the adjustments related to the subscription fees laid down by said contract.

3. After completing the reform process of the communications system - with reference to the whole set of legislative measures being examined by Parliament - the Parties shall verify the revision and adjustment of this contract.

4. By July 1, 2002 the Parties shall start the negotiations to reach the contract for the 2003 - 2005 three year period.

1. As to the non fulfilment of the obligations of this contract which does not entail a more serious penalty, the Ministry shall preliminarily notify its complaint to the licensee and then impose on it the penalty under article 22 of the Convention.

2. The payment of the penalties/fines set in this article shall be made within one month since the related request. After the elapsing of this period, if no payment is made, the amounts due shall be taken from the guarantee deposit set by the licensee, pursuant to article 20 of the Convention adopted by the Presidential Decree of March 28, 1994, which shall be re-integrated with the terms and conditions envisaged by this same article.

1. This contract shall come into force the day after the publication in the Italian Republic Official Journal of the Presidential decree adopting it and shall expire on December 31, 2002. Until its entry into force the relations between the licensee and the Ministry shall still be regulated by the provisions of the previous service contract.

2. The annexes to this contract - which are part and parcel of it - shall not be subject to the publication in the Italian Republic Official Journal. These annexes shall be deposited with the Ministry Directorate-General for Licenses and Authorisations.

Rome, November 6, 2000 Ministry for Communications

The Secretary- General

Eng .Giorgio Guidarelli Mattioli

RAI - Radiotelevisione italiana S.p.A

The President of the Board of Directors

Prof. Roberto Zaccaria