Broadband Offers Modified
Wireless Local Loop Developments
Interconnection Date Set
Number Portability Guidelines Established
Free Internet Access Disputes Resolved
Local Loop Unbundling Proceeds
Universal Service Costs Modified
The French Telecommunications Regulatory Authority has ordered the French incumbent operator, France Télécom, to modify the prices it charges to provide both advanced digital subscriber line (ADSL) network capacity to competitors and ADSL services to internet service providers (ISPs).
Following discussions with the authority, the company has provided new offers which significantly reduce the proposed prices (by between 25% and 40%) for the provision of ADSL services to competing operators and ISPs.
The authority approved France Télécom's new offers subject to them entering into force on October 15 2002. The period before this date will allow competing operators to formulate and market their own new offers to internet service providers.
According to the authority, the revised offers will improve the position of ISPs and alternative operators on the French ADSL market. Together with France Télécom's reference offer for access to the local loop, the offers should create equitable conditions for the development of broadband internet access in France.
Wireless Local Loop Developments
In March 2002 the French Telecommunications Regulatory Authority ordered four wireless local loop operators - Landtel, Broadnet, XTS Network Caraïbes and XTS Network Ocean Indien - to comply with the network coverage obligations set out in their licences.
The authority followed this order by imposing sanctions on Landtel and Broadnet. It has partially withdrawn their licences to operate a wireless local loop by reducing their geographical scope. Landtel and Broadnet now have licences only for those areas for which they have presented a valid deployment plan.
Despite these sanctions, the authority has reaffirmed its belief that wireless local loop technology will allow the development of alternative broadband data transfer service offers to small and medium-sized businesses.
The French Telecommunications Regulatory Authority has set the date of publication of France Télécom's reference interconnection offer for next year as October 15 2002. The company is considered to have significant power on the French telecommunications market and is thus required to publish a yearly reference interconnection offer giving details of all technical aspects of, and prices for, interconnection to its network.
Number Portability Guidelines Established
The authority has published guidelines on the implementation of number portability for mobile phones in France. They set out the general pricing and technical conditions applicable to mobile number portability services. Telecommunications operators must comply with these conditions in concluding interconnection agreements and when offering mobile number portability services to end users.
The guidelines define the principles governing such services marketed to end users. Among other things, they cover the pricing of these services, the procedure for granting portability, and the time period within which portability must be performed by the mobile operator. The guidelines also set out the general technical and pricing principles applicable to the provision of portability services between operators.
The authority's guidelines require mobile operators to start marketing their mobile number portability services by June 30 2003. Mobile number portability will apply to both Global System for Mobile Communications (GMS) and Universal Mobile Telecommunications System (UMTS) networks.
Free Internet Access Disputes Resolved
On June 27 2002 the French Telecommunications Regulatory Authority settled a dispute between France Télécom and an independent telecommunications operator, Free Télécom (FT), in relation to FT's free internet access services provided through the switched telephone network.
The dispute related to the calculation of shared revenues generated by local calls made by FT's subscribers. The subscribers pay their internet communications charges to France Télécom - as the owner of the local loop infrastructure - at local call rates. France Télécom uses a specific calculation method to evaluate the average revenue generated and transfers the assessed revenue to FT.
FT claimed that the method of calculation used by France Télécom did not properly reflect local call traffic, and therefore the revenue, generated by its subscribers. The same method applied to all independent operators and did not take into account the specifics of the traffic generated by FT's subscribers. This led to France Télécom paying a significantly lower amount to FT than the revenue which it actually collected from FT's subscribers.
FT claimed that France Télécom should be forced to adapt its calculation method. The authority ruled in favour of FT and set out the method of calculation for calculating the revenue resulting from free internet access services.
This was the second dispute between FT and France Télécom over the free internet access services provided by FT. On November 7 2001 the authority ruled in favour of FT in relation to the fixing of communications charges applicable to these services. The authority is thus pursuing its objective of a diversified and competitive market for internet access services in France.
Local Loop Unbundling Proceeds
The French Telecommunications Regulatory Authority has published the latest figures regarding the status of the unbundling of the local loop in France. As at July 1 2002:
- nine new entrants had signed unbundling agreements with France Télécom;
- 124 (of 128) co-location rooms were delivered to new entrants, who are pursuing the installation of their equipment; and
- 764 France Télécom lines had been unbundled.
The number of unbundled lines remains limited in comparison with the number of France Télécom ADSL lines (700,000). These unbundled lines are mainly located in the Paris region (63%).
Universal Service Costs Modified
On December 6 2001 the European Court of Justice found that France had failed to comply with those provisions of certain directives (90/388/EEC, 96/19/EC and 97/33/EC) which relate to the calculation of the universal service cost. The ruling followed a claim brought before the European Commission by two associations of new entrants (the French Telecommunications Operators Association and the Association of Telecommunications Service Operators). The commission found that the calculation method used in France resulted in new entrants paying excessive amounts for universal service.
France is the only EU member state in which new entrants must pay annual contributions for the provision of universal service by the incumbent operator (France Télécom). The European Court of Justice held that the commission's decision was well founded. As a consequence, the method of calculation for the cost of the universal service must be modified and retroactively applied to contributions made since 1997.
In mid-July 2002 the first results of the modification were published. New entrants will be partially reimbursed for contributions made between 1997 and 1999, a sum amounting to over €3.9 million. Additionally, the universal service cost for the year 2002 was lowered from €428 million to €297 million.
The reimbursements for contributions in the years 2000 and 2001 have not yet been published.
New entrant operators in France are critical of the obligation to contribute to the annual universal service cost. Analysts view the modification of the method of calculation as not only implementing the decision of the European Court of Justice, but also a step towards reaching a consensus with new entrants on their obligations. Nevertheless, some new entrants are considering proceedings before the French Supreme Administrative Court to obtain cancellation of the government decree setting out these obligations, especially since the European Court of Justice decision indirectly condemns some of its provisions.
For further information on this topic please contact Eric Morgan de Rivery or Carole Arribes at Lovells by telephone (+33 1 53 67 47 47) or by fax (+33 1 53 67 47 48) or by email ([email protected] or [email protected]).
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