ARCEP adopts guidelines on public-initiative network pricing

Paris, 7 December 2015

To provide local authorities that are investing in fibre with greater clarity, on 7 December 2015 ARCEP adopted pricing guidelines for public initiative networks (PIN). This adoption is pursuant to the Act of 6 August 2015 on Growth, Business and Equal economic opportunity, and part of France's superfast broadband programme, Plan France Très Haut Débit.

Local authority involvement is vital to ensuring fibre network rollouts in the more sparsely populated parts of the country, and to preventing a digital divide. To protect public investments, the legislature concluded that the principles governing the wholesale prices that Internet Service Providers (ISPs) are charged to access these public initiative networks needed to be clarified, and gave ARCEP the task of helping local authorities establish their pricing structures. To be able to build as homogenous a national superfast access market as possible, local authorities need more information to help with their negotiations with ISPs, which often enjoy significant buyer power.

ARCEP has taken utmost account of the European framework, and particularly European laws on State aid, to ensure that projects instigated by local authorities remain viable over the long term. The principles set by law and the European framework stipulate that the purpose of public subsidies in public initiative service areas is to make it possible to charge the same prices as in private initiative service areas. The Authority nevertheless asserts that, because PIN have certain specific characteristics, it is not always possible or opportune for prices in these two types of service area to be identical from the outset. As a result, to take these specific features into account, notably potential marketing difficulties for PIN, ARCEP established a three-stage roadmap that will allow the prices charged in public and private initiative service areas to align gradually over time.

The public consultation that ARCEP held from 6 October 2015 to 6 November 2015, on its draft guidelines detailing these measures, received a tremendous response from the sector's stakeholders. The Authority received 33 responses from local authorities and their representative associations (9 responses), from developer operators that do not have an ISP business (4 responses) and from ISPs and various other stakeholders (20 responses). ARCEP welcomes this strong feedback, which testifies to the players' interest in deploying and marketing fibre in areas that depend on public initiative.

The public consultation served to reveal the points on which market stakeholders agree: in particular, several of those who responded expressed their support for the approach to initiating PIN marketing set out in the guidelines, and for framing the terms and conditions for renewing the right to employ co-financing.

On the matter of pricing active solutions, which are not yet very developed in France, the responses helped to pinpoint areas for improvement. Based on the information provided by market players, the price of active solutions has undergone a downwards re-evaluation, whose soundness will be assessed by ARCEP 18 months from now.

As requested by stakeholders, more detailed information was also provided on the system for transferring rights of use over the final connection, depending on the different pricing schemes employed. In particular, these added details made it possible to underscore that the different pricing schemes applied to the final connection are compatible with introductory discounts.

Lastly, passive access pricing was also updated based on the rate of return hypothesis set by Decision No. 2015-1369 of 5 November 2015 for regulated fixed network operations.