Only the speech as made may be considered authentic
Mister Minister responsible for the for the Digital Transition and Electronic Communications, dear Jean-Noël,
Members of Parliament,
Local elected officials,
Authority chairs, notably independent administrative authorities, I know that several of my colleagues are here, for which I am very grateful,
Heads of government services, Stage agency heads,
Madame Chief of Staff for the Rector of the Paris Academy,
Presidents and CEOs of telecom operators, postal operators, print media operators,
Ladies and gentlemen,
After a close to two-year absence, I am delighted to be reviving the tradition of Arcep’s New Year’s Greetings ceremony, in this magnificent hall in La Sorbonne and, on behalf of the Arcep Executive Board who is here with me today, to extend our very best wishes for 2023.
Indeed, I would like to start by thanking every member of the Arcep Executive Board, for the quality of our relationships and our discussions and for having welcomed me, close to two years ago, with so much goodwill.
And a special word of thanks this year for Monique Libert-Champagne whose term of office will be ending shortly, on January 3rd.
Dear Monique, your true dedication to the work we do, your commitment to representing Arcep at outside events, when travelling in the field and at regional digital strategy committee meetings, your tireless investment in press distribution stakeholders and representatives from across the sector, your knowledge of this sector, your legal expertise, and your pragmatism have been invaluable and illuminating to our Board discussions. So let me take this opportunity to thank you most sincerely.
It has been almost three years since we last gathered for this New Year’s Greeting ceremony. Three years during which the sectors that Arcep regulates have changed dramatically, in some cases due to Covid, but more often because of changes in our society.
Covid only accelerated existing trends. In terms of the digital transition, it triggered a tremendous change in user habits, upending French consumers and businesses’ behaviours, and this in a lasting fashion. And any close analysis of the sectors that Arcep regulates will do nothing to contradict this.
Regarding press distribution:
The Covid crisis naturally altered readers’ habits, due to the lockdowns, but the trend was already in motion and had a profound impact on the entire sector. It is increasingly rare for people in France to buy their paper from the local newsagent, as they instead get their news more and more from online sources. To give an example: in three years, newsagents’ sales for the top seven daily newspapers plummeted by 37%, between 2019 and 2022.
The rising cost of paper and the impact, shared by every sector, of the energy crisis and inflation are only aggravating these difficulties. It was in this very complicated market context that Arcep introduced the Bichet Act provisions, which were reviewed in 2019.
In 2020, we had to take emergency action, due to the Presstalis bankruptcy. And our first decision, to put a freeze on publishers switching distributors, was taken out of necessity, and is not in keeping with Arcep’s cultural DNA which is to foster competition and opportunities, and expand users’ choices. We are fully determined to build a proper architecture in the medium term, a more open and viable framework for this market.
The Act of 2019 sought to re-empower all of the sector’s economic stakeholders, and particularly newsagents, by establishing the regulation. Where CSMP approved pricing, Arcep gives an opinion, where CSMP set the conditions for title selection and quantity caps, the Act of 2019 hands these decisions over to business contracts, which Arcep examines with respect to compliance with the overarching principles set out in the laws…
We still have a great many irons in the fire for the press sector: including an agreement on title selection, which gives newsagents more freedom, the work being done on newsagent revenue, which is crucial to the profession’s attractiveness, the work being done on regulatory accounting…
What forces guide us in these actions? Number one is always putting readers at the heart of any consideration. As it is end users’ satisfaction, whether in the press sector, or any other sector, that lies at the heart of Arcep’s actions.
We will continue to help shepherd this sector in the throes of great change.
Despite which, we are well aware of the sector’s fragility, and are calling on stakeholders to think about how to improve and optimise their organisation, to safeguard the future of press distribution.
Regarding the postal sector we are tasked with regulating, here too the Covid crisis amplified pre-existing trends.
Eighteen billion letters were delivered in 2008, a number that fell to seven billion in 2021. Last year, plummeting mail volumes cost La Poste 600 million euros in revenue. And forecasts for 2022 are similar.
At a time of changing user behaviour, the economic balance of the universal postal service is naturally being called into question. Which led the Government to negotiate a new State Enterprise-La Poste contract, authorising a complete overhaul of the product line included in the Universal service, and the financial compensation decision adopted in the Finance Act for 2022. Arcep was entrusted with a new task, assessing the net cost of providing the Universal service, to verify that La Poste was not being overcompensated.
Arcep also issued an opinion on pricing changes for the new line of services included in the Universal service, and which La Poste plans on implementing on 1 January 2023. We were careful to ensure that these prices remain affordable.
I want to salute the strategic foresight that La Poste executives have had and continue to have, as well as the commitment of the hundreds of thousands of postal workers who, over the years, have worked to transform their company and diversify the parcel business of course, but also the personal, home services they provide, as well as their digital services, at a time when the traditional business, the longstanding core of this great enterprise, has been steadily collapsing over the past several years.
The Covid crisis also left its mark on the telecommunications sector
Let’s start with the good news!
The pandemic did not impede operators’ spending. On the contrary: they have invested more than 40 billion euros over the past three years, in bringing better fixed and mobile connectivity to people in France, not to mention public contributions from the Government and local authorities.
I would like to acknowledge that. First, of course, to commend operators’ commitment to achieving this objective, and I never pass up an opportunity to do so, but also to offer a reminder that it is the fruit of resolutely pro-investment regulation, which has borne concrete results, in the competitive telecommunications market, in a way that has benefitted French users.
I’ll refrain from citing all of the figures that testify to the concrete progress that’s been made. They were referred to yesterday during the French Telecommunications Federation New Year’s ceremony. And I hope you’ll allow me a small aside to FFT president, dear Liza Bellulo, how sorry I am not to have been able to be there last night, as I was in the last days of isolation.
Before the Covid crisis, 5G had not yet been launched, the New Deal’s targeted coverage mechanism had not yet produced any concrete results, and the number of sockets in areas covered by public-initiative networks and by calls for expression of local interest (AMEL) was still low. Today, the New Deal is paying off and widely embraced. This paradigm shift in frequency allocations, spurred by elected officials’ policies, came from a commitment across the board: from the Government and Arcep in its conception, operators of course, in the collective and constructive work they achieved, local authorities and the State in the choice of areas to be covered, Arcep for monitoring compliance with obligations: it is working well.
It is a radical departure in the approach to frequency allocations, and one that creates the ability to more fully satisfy the population’s needs.
At the same time, fibre become the internet access network of choice for people in France, since fibre’s share of broadband and superfast broadband subscriptions overstepped the 50% mark in 2022, and the number of premises passed for fibre will reach close 80% by the end of the year.
All of these investments are truly remarkable industrial efforts from operators and local authorities. It has also meant the development of a fully-fledged sector of sub-contractors committed to the success of the France Très Haut débit / Superfast broadband scheme, which is creating jobs in every territory and must provide working conditions that these sub-contractors to perform service calls safely and according to the rules.
If I am able to welcome this good news this evening, it is because the sector was able to invest in a way that aligns with the French population’s now very demanding requirements.
All we need now, is to keep going!
The Covid crisis only accelerated existing trends, which has also been the case in terms of French people’s expectations of their fixed and mobile connectivity! It was like an electroshock to the collective conscience, driving home how vital digital technology is to our society’s resilience and ability to operate.
The challenge of having high quality fixed and mobile networks that are available nationwide is immense: healthcare, remote working, home care, education (interactive learning tools, distance learning…), access to culture and entertainment… all of the services that people in France used heavily during the lockdowns.
It is now up to us to translate this electroshock effect that the pandemic had on digital’s place in our society into ambitions for tomorrow. And for these ambitions to match French people’s expectations, whether in fibre deployments, improving connection quality, the copper switchoff plan, or issues surrounding the digital environmental footprint.
Everyone will need to do their part over the coming years to rise to and meet these challenges.
Our responsibility as regulator is to reconcile the private interests of the players in the sectors we regulate and public interest objectives. Having access to high quality internet access at all times, in every part of the country, is one irrefutable objective. And, in fact, the very core of our regulatory goals.
It is up to the major decision-makers (commercial operators and infrastructure operators) to safeguard the attractiveness of the sector as a whole, to be able to meet the sector’s needs over the long term and ensure high quality work – to guarantee a decent quality of service to all users. This is a major goal, and it seems to me that recent discussions between stakeholders are pointing in the right direction. But they must be vigilant as, without properly trained and properly paid women and men, the sector will not achieve its objectives.
Additionally, at Arcep and the Government’s request, in September the sector submitted an action plan to improve fibre network quality. I would like to acknowledge the tremendous collective work that has been done on this front. Arcep is responsible for monitoring the action plan on a monthly basis, and we shall be particularly vigilant in ensuring its completion. The situations that fibre network users in certain municipalities are experiencing are absolutely unacceptable. Nationwide, improving work practices and rehabilitating dilapidated infrastructures must also be ongoing processes.
This quality-of-service issue strikes us as especially crucial as Orange prepares to switch off its legacy copper network. It is even a prerequisite: we need to be able to count on the fibre network being well built and well run before being able to have this new infrastructure replace the old copper network. Just as copper network quality must be maintained right up to its switchoff. It is essential.
But that’s not the only prerequisite: fibre rollouts need to be complete before planning to switch off the copper network. We have, however, observed that, while remaining high overall, notably due to deployments in public-initiative areas, the pace of rollouts is slowing in a concerning way in the less densely populated areas served by private initiative, and in very high-density areas.
The national commercial switchoff of the copper network, which Orange has planned for 2026, therefore supposes that the deployment trajectory aligns with this deadline. As it stands today, there is room for doubt: once again, everyone needs to assume their responsibilities. I cannot stress that enough. We cannot want to switch off the copper network and stop fibre deployments in those parts of the country where the Government has issued a call for investment letters of intent ("zones AMII") and very high-density areas.
That being said, the copper switchoff process has begun, with the second trial involving 11,000 premises and the announced commercial switchoff of 200,000 premises at the start of 2024, three months later than the notified plan. But it is still very much a future workstream and still evolving plan, as further details are required on a number of aspects.
How can we ensure this copper switchoff plan is successful?
It all starts with excellent governance and perfect coordination!
The plan’s success will depend on Orange effectively putting into place a system of governance that truly involves all of the stakeholders, built on a bedrock of full cooperation with the local infrastructure operator, of course, but also all of the concerned operators and local authorities. In addition, Orange must share the information at its disposal much more widely, particularly information that makes it possible to cross-reference addresses connected to the copper network with addresses connected to the infrastructure operator’s fibre network, to enable a handover between the two networks.
The copper network switchoff is a strategic concern in the business market as well, given the large number of companies that still rely on it. The switchover from copper to fibre represents an opportunity to develop and future-proof competition in this market, and Arcep has devoted itself for several years now to creating the conditions that will enable the emergence of alternative FttH access products, with increased quality, aimed at the business market. But the right pricing will need to be in place to drive the migration of copper solutions used by businesses to fibre (FttE) solutions. Arcep will therefore pay particularly close attention to this.
If I have spent so much time talking about the copper switchoff, it’s because it really is an undertaking that will have an impact on the entire sector, not only from an economic standpoint – it would not make sense to maintain an aging network alongside the new infrastructure of reference that is fibre – but from an environmental standpoint as well, as a fibre subscriber consumes four times less energy than a copper network subscriber. It is also a crucial project for the people of France, notably those who are not yet fibre subscribers and who, by and large, are not aware that the copper network they have always used will be disappearing in a few years. This topic will naturally be central to the next five-year market analysis decisions, for 2024 to 2028, on which we began working this summer.
Also at the heart of future regulatory directions is the consideration of digital environmental issues and challenges.
Arcep launched its first workstreams on this topic back in 2019, resulting in the production of a series of reports, including one with ADEME on assessing the digital carbon footprint in France, which was submitted in 2022. The forward-looking portion of this report (containing scenarios up to 2030 and 2050) is due to be submitted to the Government early next year.
Thanks to the REEN Act, on reducing the digital carbon footprint, passed in December 2021, we are going to increase the scope of our environmental data collection to include a large number of digital market players: operators, of course, but also data centres, device manufacturers, network equipment suppliers… to expand our annual “Achieving digital sustainability” survey to include the entire digital ecosystem. The findings will deliver an unprecedented snapshot of the digital environmental footprint.
As a neutral expert, Arcep wants to contribute what it can to the debates.
And, finally, I would not want to conclude these few words on the environmental issues surrounding digital technology without alluding to the topical matter of revenue sharing between Big Tech and operators, and to express my personal views on the subject. You may not see any link, but I assure you, there is one.
This debate is not new, but has been ongoing for more than 10 years and, as it stands, it seems that the networks have adapted, and net neutrality has been preserved.
I believe that debates at the European level over “fair share” must exclude any challenge to the Open Internet regulation, which is a fundamental principle safeguarding innovation and the freedom to communicate.
Once this is established, the question of accountability must also be raised. I believe it is legitimate to discuss holding Big Tech accountable for increasing network traffic. Some argue that only operators’ customers are responsible for that increase, as they alone decide how to use their internet access. But that would also mean overlooking the fact that these massive content providers’ business model is based on the attention economy, generating ever more self-activated and bandwidth-hungry video streams. Making these players accountable for the steady increase in volumes of data traffic on the internet therefore makes sense to me, notably given these data’s impact on the environment.
The European Commission has announced a broad consultation on this topic for early 2023, apparently with a desire to expand the discussion to the changing business models of the different players involved in providing electronic communication services. This is no doubt the right way to go, and Arcep will contribute to these investigations, particularly during debates on the matter within BEREC.
It‘s time to wrap this up, and I realise that are is so much of Arcep’s work I have not spoken of: the steady take-off of 5G in business networks, major changes to the numbering plan, the still too poor results in the area of accessibility, to name but a few. There won’t be time enough to talk about them tonight, but there will be other opportunities to do so.
To conclude, I also wanted to mention that we have begun thinking in house about how we do things. Listening to the market and its different stakeholders is already part of Arcep teams’ DNA. As an adjunct to that, I would like us to look at the work we do through the lens of users’ expectations. In terms of how we operate in-house at Arcep, this means listening more closely to what they have to say to us, but also communicating more about our actions, and their limits, using simple terms that everyone can understand, but which I believe are vital to ensuring that our regulatory choices are effective. It is important for me to talk to you about this internal process going on at Arcep.
So let me end by thanking you all for being here this evening, how delighted we are to see you, and in such great numbers, despite the weather that told us to stay home, despite France playing in the World Cup semi-final match. It lets us know the singular place that Arcep holds. I would also like to thank all of the women and men of Arcep, the executive team, for their commitment and their professionalism.
Mister Minister, I’m going to hand the floor over to you and, while you are making your way to the podium, I’ll take the opportunity to let everyone here know that, after the Minister’s speech, we hope that you will all join us for the cocktail reception and… a little later, the semi-final match between France and Morocco!
All of the Board members and I would like to wish you a very happy holiday time and a most excellent New Year in 2023. Over to you, Mister Minister. Thank you!