The French Telecommunications Regulatory Authority (ART) recently handed down a decision concerning a dispute between France Telecom and Liberty Surf Télécom over the terms of France Telecom's ADSL internet offer. ADSL (asymmetric digital subscriber line) technology allows high-speed internet access over the regular copper telephone wires of the local loop.

Until January 1 2001 France Telecom held an effective monopoly over these local telephone wires and was therefore able to offer high-speed ADSL internet services to consumers more quickly and more efficiently than its competitors. This led several operators, such as 9 Telecom, to bring proceedings before the French Competition Council, alleging that France Telecom had abused its dominant market position. On February 18 2000 the Competition Council ordered France Telecom either to provide a commercial offer for the provision of ADSL internet services via a permanent virtual circuit or to come up with an equivalent technical solution (Decision 00-MC-01). Pursuant to this decision France Telecom eventually made the offer 'ADSL Connect ATM'.

However, on November 17 2000 Liberty Surf Télécom asked the ART to settle a dispute concerning the pricing and technical conditions of this offer. Within the scope of its dispute resolution power under the Posts and Telecommunications Code, and in accordance with the principle of non-discrimination under applicable EC directives, the ART fixed certain conditions of the ADSL Connect ATM offer (Decision 01-253 of March 2 2001) relating to (i) the reservation minimum for access by the third-party operator and (ii) the prices applied for both access and bandwidth.

The ART imposed these conditions on the grounds that France Telecom's ADSL offer should be fair and equitable in order to achieve effective competition in the market. The prices fixed by the ART's decision are substantially lower than those proposed by France Telecom.

This decision is an important step in enabling effective competition in the local internet market, while awaiting the full implementation of local loop unbundling.

For further information on this topic please contact Eric Morgan de Rivery, Pierre de Girard or Kate Thackeray at Lovells by telephone (+33 1 53 67 47 47) or by fax (+33 1 53 67 47 48) or by email ([email protected], [email protected] or [email protected]).