Arcep speaks

ARCEP New Year’s Ceremony - Speech by the Chairman, Jean-Claude Mallet – La Sorbonne, Thursday, 22 January 2009

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Madame Minister,

Mister Rector,

Ladies and gentlemen,

I would like to begin by extending my very deep thanks to Mr. Patrick Gérard for hosting us here at the Sorbonne, which is a place I frequented as a student of the Ecole normale, and later as the Chairman of the Board of the Ecole Normale Supérieure. This is the first time that I have been here in my new capacity.

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I would also like to extend my greetings to all of the personalities, presidents, chairpersons, members of economic and financial groups, journalists and other companies from the electronic communications and postal sectors.

We wish all of you a very happy New Year, as we do to ARCEP staff members who are present here this evening and who, Madame Minister, we very much wanted to be part of this little ceremony.

They are working on a great many complex issues, contributing the full range of their engineering, legal and economic expertise. They work very closely with the members of the Executive Board, all of whom are here tonight.

It is a great pleasure for me to discover this new continent, and a great honour to succeed two Chairmen who took on both a weighty task and a role of pioneer. I say pioneer because we are only at the dawn of this digital age. Both Jean-Michel Hubert and Paul Champsaur – who welcomed me with the greatest of courtesy, with much friendship and warmth – have already mapped out extremely promising paths for an Authority in charge of regulation, a term whose full scope I am now discovering and which is situated, Madame Minister, at the very heart of the development of the digital economy.

Just a very quick word about my appointment. I was appointed after receiving the approval – or in any case in the absence of opposition – and unanimously in this case, of the competent parliamentary committees. I did want to underscore the relationship between an authority such as ours and the Parliament which votes on laws, and to which we report in accordance with our mandate.

An independent authority, independent of Government but which works closely with it, in other words which is part of the State apparatus. We are not a "floating" authority occupying some "extra-terrestrial" space, belonging neither to the market nor the State, but rather an authority that is very much part of the State apparatus and which exercises its powers in an independent fashion. An Authority like others that you know well: the Competition Authority, the Broadcasting Authority, Conseil Supérieur de l'Audiovisuel

I should like to take this opportunity of well-wishing to provide a brief description of the thus renewed Board, and to say a few words about the major issues we will be addressing in 2009.

Fist, and this will surprise no-one who knows my background, ARCEP’s priorities and its strategy.

Starting with La Poste and postal services.

There have been a great many signs lately that postal services and organisations are changing at an accelerated pace. As a result of this acceleration, there are some very significant changes that are affecting the market. Public postal services are having to contend with both a decline in traffic, and so in revenue, and with new demands from their customers, and particularly from their largest customers which are sensitive to the price of services.

Postal services nevertheless remain an essential infrastructure that serves the people, of course, and so citizens, but it also serves the justice system, the press, mail order sales, etc. This entire sector has entered into a stage of major transformation, and I would like to underscore my tremendous interest in the first talks I had with the President of La Poste, Mr. Jean-Paul Bailly.

As the Authority which is also responsible for regulating the postal sector, we have planned for the impact that the change in status and opening postal markets up to competition on 1 January 2011 will have on La Poste. As we see it, the role of the Authority is naturally to pave the way for opening the market up to competition but also, in a more general and political manner, to accompany the universal service operator’s evolution.

On the matter of electronic communications I would like to try to define our philosophy, and my own philosophy: two main objectives, four instruments and one attempt to define a more strategic vision, an overall strategy.

Two concrete objectives.

First – and this is truly the top priority – is to stimulate the deployment of new digital networks, both fixed and mobile. This means freeing up investments. Investments that can be considerable and help accelerate growth.

Clearly our decisions, our policies, cannot ignore the economic crisis that the world, Europe and our country is experiencing. This is something that will factor into the decisions we will be called on to make and into our plans.

These investments concern fixed networks and fibre rollouts. These new networks, which are meant to replace current networks, could be as important as electrical networks, water networks, etc. So this is a strategic issue. Thanks to my previous positions, I am somewhat familiar with this particular strategic dimension.

The second main, concrete objective is to achieve nationwide coverage for fixed and mobile broadband and ultra-fast broadband solutions. A little aside: in my previous jobs and in situations of sometimes dire crises, I was always using mobile phones and different forms of secured communication. Quite simply, I would say that although France can boast of being at the leading edge compared to other countries, I think it still has some way to go in improving quality and coverage…

I think that we need to make a commitment with the Government over this remaining distance. We need to help local authorities and market players. We need to define a framework that would allow us to truly meet the needs and hopes of consumers, but also of citizens, and enable the projects of the economic stakeholders that are the sector’s operators and equipment manufacturers.

So, two objectives: new networks on the one hand, and coverage on the other.

And four instruments.

The first is an industrial policy. It is a term that surprises a little in our sector. It is not a term to which I would attach a negative Colbertist or historical connotation.

It is my view that an industrial policy that encourages the deployment of new infrastructure is an essential instrument and one that is key to France’s economic development.

Here again we need to take account of the new economic situation that governs current decisions being made by the Government and public powers, and of the need to encourage the creation of powerful French players on the world stage.

We should also add that the deployment of new infrastructure will influence the development of what is called the Internet’s ecosystem. This ecosystem could develop, in part thanks to new economic activities that involve the retail and distribution sector, for instance, which, like other sectors, will experience a profound change in their business model and will be transformed by this digital revolution.

So industrial policy in this direction.

Second, a decidely European policy.

Europe comes into play here not only because it is now the cradle and source of applicable law, community law, but also because we will need to integrate the European dimension into our policies in two ways.

The first is to focus on achieving harmonised regulatory practices in the different European Union countries with the members of the European Regulators Group. To do so, current negotiations – which the Authority is monitoring closely – over the package that was approved by the European Union Council under the French presidency, on 27 November, need to be completed. But we also need to support the Commission’s proposals, and particularly those concerning recommendations on call termination and the one concerning new access modes. These proposals are either underway or will be submitted by the Commission.

So, a harmonisation of legal practices, but also the affirmation of a European player at the global level. Here, management of the spectrum resource is an absolutely major issue. I can confirm that I believe that promoting a European position on these major issues is an essential part of our actions, and will certainly be the goal that I will set and the terms that I shall use during my mandate at the helm of the Authority.

Third central method: an ongoing search for satisfactory responses to end users’ demands.

End user means the consumer in the classic sense of the word, but also the citizen – and we need to keep both meanings in mind. We will continue to devote our efforts to reinforcing symmetrical regulation, and I think this is an important element. ARCEP is establishing symmetrical regulation that applies to all market players, and will continue its efforts in the area of asymmetrical regulation, which I will come back to in a moment.

Enacting and monitoring compliance with the rules that apply to all operators, and which are viewed as the rules that apply to the market as a whole and the rules that apply to all.

There are consequences to bear in mind with respect to transparency, quality and security.

The security and resilience of these networks fall under the Authority’s purview. Under the terms of our legislative mandate we, i.e. ARCEP and the Government, must take charge, each in its own way, of this somewhat fledgling issue.

On this topic of taking account of the end user, the role of consumers needs to be considered as well, their needs taken into account. To this end there is a Consumer affairs committee to which members of the Executive Board contribute. This will also be one of our priorities in 2009.

The last point, the fourth major instrument, is maintaining the conditions that enable fair and effective competition.

Coming back to the topic of asymmetrical regulation. Parallel to the development of symmetrical regulation, we will continue to devote ourselves to asymmetrical or competition regulation. This means that we will need to ensure, and especially when it comes to the deployment of new networks, that there is fair and effective competition between the players. This issue is and will remain at the heart of our mission. It also shapes a close and abiding cooperation which my predecessors established with the Competition Council and now the Competition Authority (Autorité de la Concurrence).

Beyond these objectives, these four instruments that I have just listed, I would like to stress that it is my view that the Authority’s actions need to be part of a global perception of France’s strategy with respect to the digital economy for which you, Madame Minister, are responsible.

I very much hope that ARCEP will develop its capacity to look forward and of its interaction with players from all corners of the industry. I hope that under your guidance, Madame Minister, we will engage in discussions devoted to defining France’s digital strategy. All of the players in France, which are currently divided by powers assigned by the Government and the legislator, need to be associated equally with this strategy.

This strategy is particularly critical given that the considerable investments required will be beneficial on three fronts: beneficial for the country of course, to the extent that they will benefit the best technologies. But beneficial for content providers which will have a growing need for this type of capacity; beneficial, in return, for operators which will be able to generate a profit; and beneficial, finally, for consumers who will reap the rewards of more varied content and increased capacities adapted to the world today.

We will also need to think about the development and consequences of what we call the convergence of content and networks. These consequences are many. I will not dwell on this any further today, if only to repeat that this is a central issue.

All of this to underscore the importance I give to having ARCEP’s actions be an integral part of a shared strategic vision, which implies defining this strategy and its implementation, a highly ambitious international policy and a strengthening of relations with the different players, and particularly with the Conseil Supérieur de l'Audiovisuel in this area.

A word, if I may, on our agenda for 2009.

Coming back to La Poste. As I said earlier, one of our tasks is to accompany the changing status of La Poste, and to work on forward-looking solutions for financing the universal service after 2011. We will devote particular efforts to developing and implementing universal postal service cost calculation methods, notably through the notion of relevant cost.

As concerns electronic communications, I think that our priorities are clear: the development of optical fibre, with stepped-up efforts on the task begun late last year and which was reasserted at the Ministers meeting held by the Prime Minister on 12 January, which I attended.

We have an ambitious roadmap.

We have launched trials and our goal is to be ready by summer 2009. I would also like to point out that if we will need to think of freeing up investments, and private investments in particular, we must not rule out eventual discussions over the public monies that may be necessary, particularly when market players are unable to satisfy the demands, not only of consumers but, as I said earlier, of citizens.

On the matter of mobile network frequencies, the Prime Minister announced the Government’s general strategy on 12 January. A strategy that concerns the unallocated frequencies tied to the use of UMTS, what is referred to as the fourth UMTS licence, but also the entire spectrum of frequencies and the eventual development of ultra high-speed mobile. A Parliamentary debate on the subject will be held on 5 February. I will address the concerned parliamentary committees just prior to that date. Once the Government’s decision on the financial terms is known, we will be able to launch the ensuing call for submissions.

Nationwide coverage.

Parliament has laid out several objectives for us. I will not go into too much detail here, but only say that we will meet these objectives. The ARCEP Executive Board meets twice a week. It examines these various subjects, whether it be second and third generation mobile network coverage, increased bandwidth in the different regions or the rising number of public-initiative projects launched as part of the Public Initiative Network Committee, CRIP, which we continue to support actively.

These areas offer proof of the positive results of ARCEP’s efforts over the past several years, which we will to continue to build on. Some members of the Board will devote themselves to these issues in particular.

A word about economic regulation in 2009.

The Authority requires France Telecom and the country’s mobile operators to produce detailed regulatory accounts. This information is of particular importance as it forms the basis of the price of a great many products. These accounting obligations were specified during the first cycle of market analysis, then confirmed at the end of the second cycle in late 2006.

Over the course of 2009, drawing on past experience, the Authority will re-examine the details of these obligations and make the necessary adjustments. In addition, France Telecom’s publication of its accounting elements for fiscal 2007 elicited queries from both ARCEP and other operators. This topic has already been an issue of focus at the Authority for several months, and will constitute a priority in the early part of 2009.

A word about efforts devoted to consumers in 2009.

Several directions that I will not elaborate on here. We are launching a site today,, whose goal and purpose is to provide answers to consumers’ most frequently asked questions: what to do when I move? How to handle a dispute with my operator? etc. The consumer mission, which is under my supervision and overseen by certain Board members, receives around 10,000 queries every year. The site is likely to receive even more, which also means managing an added service.

Providing the Government with assistance in its designation of the operator in charge of the universal service. This procedure was launched last week. Once this new universal service operator has been designated, the Authority will be able to define a new multi-annual tariff schedule for the universal telephone service.

And the last two issues of focus that I will touch on very briefly.

First, the possibility of what is referred to as portability, fixed number portability, in other words the ability to keep the same phone number when switching to another service provider. Substantial efforts have already been made in this direction, and more are still to come. I would like to salute the creation of the Association for fixed number portability (l'Association pour la portabilité des numéros fixes) on Tuesday, 20 January, and to tell you here this evening, and especially consumer association representatives, that these will be focal issues for us.

Second is the launch in 2009 of a change in the mobile numbering plan as we will be adding numbers starting with 07. Why? Because we are running out of numbers starting with 06, which is further proof of the ongoing popularity of cellular telephony.

And a final word about method.

It is the Authority’s task to manage all of the mandates that the legislator has assigned it in a balanced and ongoing fashion.

It is the words: competition, investment, consumer, public service, universal service… This balance evolves according to the times, the issues, but we need to take continual account of all of these elements, all of these parameters. Second, dialogue and transparency. From the outset of my mandate, my intention is to increase the instances of dialogue with the different partners I mentioned earlier, in particular, building a special relationship with Parliament, elected officials, the sector’s operators and manufacturers.

And, finally, the very clear, very open desire to make use of the entire gamut of means and tools at the Authority’s disposal. These means are asymmetrical regulation decisions, symmetrical regulation decisions, but also dispute settlement and, when appropriate, a power of enquiry and imposing penalties.

We will employ these means fully, as the legislator intended, to serve the public interest.

Madame Minister, ladies and gentlemen, I extend my very best wishes to you and yours for the new year ahead. These wishes come a little late in the month, but still in time. I would also like to extend my warmest thanks to you, Madame Minister, for honouring us with your presence this evening, and I now hand the floor over to you.

Linked documents

Smiley The audio version of the Jean-Claude Mallet's speech (mp3 - ) Smiley

Smiley The consumer new web site