ARCEP adopts analysis decisions on broadband and superfast broadband markets for mid-2014 to mid-2017

Paris, 27 June 2014

After having taken utmost account of the observations of the European Commission, ARCEP adopted analysis decisions on the fixed broadband and superfast broadband markets for the regulatory period running from mid-2014 to mid-2017 (1).

These decisions define, for the period running from mid-2014 to mid-2017, what is referred to as asymmetrical regulation - in other words which applies only to SMP operator Orange (2) - for the fixed broadband and superfast broadband markets, i.e.:

- wholesale (physical) network infrastructure access (including shared or fully unbundled access) at a fixed location (market 4);
- wholesale broadband access (market 5);
- wholesale terminating segments of leased lines, irrespective of the technology used to provide leased or dedicated capacity (market 6).

Prior to their adoption, these decisions were the subject of an in-depth consultation with the sector's stakeholders for more than a year:

- publication of a market "scorecard and outlook" (3),
- two public consultations on successive draft decisions (4),
- soliciting the opinion of the Competition authority (5),
- the European Commission's observations;
- in-depth discussions with local authorities as part of GRACO (6) technical meetings and ad hoc meetings throughout the process.

Increased consistency between the regulation of wholesale consumer offers and offers aimed specifically at businesses

This revised regulation strengthens the consistency between, one the one hand, the regulatory obligations that apply to so-called "general" wholesale offers, i.e. which are aimed chiefly at consumers and, on the other, those designed specifically to meet the needs of businesses.

This was in fact the first simultaneous review of the analyses for markets 4, 5 and 6, which made it possible to examine all of the competition issues identified in the fixed broadband and superfast broadband markets at once. The result for ARCEP is a clearer regulatory framework, equipped to address the changes at work in the enterprise market.

Increased ties between symmetrical and asymmetrical regulations governing FttH networks

Parallel to this review of asymmetrical regulation, ARCEP also worked on completing the symmetrical regulation - i.e. which applies equally to all operators - governing fibre-to-the-home (FttH) networks. The aim was to shore up the effectiveness of the regulatory framework which, for superfast access networks, rests on two pillars: asymmetrical regulation for existing infrastructure (copper local loop and associated resources, civil engineering) and symmetrical obligations relating to new networks, insofar as they will be deployed by a large number of private and public sector undertakings. In early 2014, ARCEP thus strengthened FttH network sharing (7), and began a series of projects (8) whose aim is to ensure that the wholesale market for FttH network access - which will be populated by a wide array of public and private sector players - runs smoothly, and above all is a homogenous one:

- public consultation currently underway on pricing these networks in the least populated parts of the country;
- launch of a consultation in the summer on a draft decision on operational network sharing processes;
- draft of a decision defining the specifications for an accounting system that traces the costs and revenue tied to building and operating shared optical local loops (submitted for public consultation in the second half of 2014).

By completing the asymmetrical component of fixed market regulation being published today, all of this work helps consolidate the regulatory framework, and supports market players in their ongoing efforts to achieve more structured fibre-to-the-home rollouts and subscription processes, to meet the challenge of a swift and large-scale transition to superfast broadband in France.

Main new additions in the adopted decisions

This new regulatory framework increases the opportunities to share existing infrastructure, and so reduce the cost of deploying superfast broadband access: wider and less restrictive reuse of Orange civil engineering, clarification of the terms and conditions of the LFO fibre backhaul offer and, more generally, of the solutions needed to deploy and operate fibre local loops.

It will also make it possible to render available services, and particularly TV services, on the copper network more homogenous: first, by allowing alternative operators to enhance their plans without being involved in unbundling and, second, giving Orange all of the means to begin selling TV services in non unbundled areas, within a predictable legal framework, and enabling alternative operators to step up the pace of unbundling the smallest cabinets. Thanks to these measures, the existing disparities in the services that are available in unbundled and non-unbundled areas should gradually disappear.

Several operational improvements have been brought to existing wholesale offers (LLU, civil engineering, sub-loop unbundling, reproducing bundled plans, expanding the range of available bitrates and including optical fibre back-up services for wholesale fibre bitstream offers on dedicated local loops, etc.)

This new framework defines the strengthened non-discrimination obligations, pursuant to the European Commission recommendation of 11 September 2013 on "consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment".

It also provides for increased monitoring of submarine cable tariffs.

Lastly, a partial and progressive deregulation of wholesale markets that are specific to businesses will begin on 1 January 2015, to provide market players with the predictability they need.

(1) ARCEP must review its analysis on its own initiative, "when changes in the marketplace warrant," and every three years regardless.
(2) And to GCN for wholesale capacity services on inter-territorial segments landing in the overseas collectivity of Saint-Barthélemy
(3) 4th July 2013 press release
(4) 27th November 2013 press release and 19th February 2014 press release
(5) 17th April 2014 press release
(6) Forum for discussions between ARCEP, local authorities and operators
(7) 27th January press release
(8) 16th May press release