AFORST vs. France Telecom

Paris, 18th June 2009

After examining the facts and given the recent cuts to some of France Telecom’s access and interconnection offer tariffs, ARCEP’s director general has decided to end the enquiry, thereby closing the procedure initiated by AFORST.

 

AFORST’s complaint

On 9th September 2008, Association Française des Operators de Réseaux et de Services de Télécommunications (AFORST) asked ARCEP to open a sanction procedure against France Telecom.

Having noted the positive balances of France Telecom's 2006 expense and revenues accounts on several access and interconnection markets published on 28th December 2007, AFORST considered there to be evidence that France Telecom had not respected its pricing obligations on the fixed access and interconnection markets.

ARCEP's sanction procedure

ARCEP has the power to impose administrative sanctions as defined in Article L.36-11 of the Post and Electronic Communications Code (CPCE). This power is used to ensure that operators respect their obligations under the CPCE and all regulatory and individual decisions taken to guarantee its application.

On its own initiative, or when called on by a third party, ARCEP may open a sanction procedure against an operator. Following an enquiry, ARCEP’s director general may order the operator, via a formal notice decision, to respect its obligations within a time period of at least one month. Should the operator not respect this order within the time allotted, the ARCEP board of directors, called by the director general, may sanction the non-respect of the notice.

Enquiry and observation of no need to continue

Following this referral and in accordance with Article L. 36-11 of the Post and Electronic Communications Code, ARCEP opened a sanction procedure against France Telecom. In the enquiry, the examiners heard both parties and examined the elements submitted at their request by AFORST and France Telecom.

France Telecom’s expense and revenues accounts for 2007, published on 31st December 2008, were also examined in detail to determine whether France Telecom had respected its pricing obligations in force.

In particular, the enquiry covered call origination interconnection and access services, full unbundling and wholesale sales of analogue and digital telephone service access (VGAST). All these offers are subject to a cost-oriented pricing obligation.

France Telecom modified its reference offers on 28th May, during the course of the enquiry, cutting its call origination tariff by about 9%, its monthly full unbundling tariff by 3%, monthly analogue VGAST tariffs by 4%, and the monthly digital VGAST tariff by 20%. These prices took effect on 1st January 2009.

The activated high-speed access service with regional delivery (the "bitstream" offer) allows alternative operators to sell high-speed multi-service access offers in geographic areas where they do not have access to full unbundling. This offer is subject to a pricing obligation which forbids France Telecom from marketing this service at an excessively low tariff, which would discourage alternative operators from investing in the deployment of capillary networks and from using the full unbundling offer. The enquiry confirmed that France Telecom’s positive accounting balances on this offer did conform to its obligations.

Following examination of all available accounting elements, and in consideration of the pricing modifications made by France Telecom, ARCEP’s director general closed the procedure, observing that, in accordance with ARCEP’s by-laws, there was no need to pursue the enquiry.


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