ARCEP defines the terms of optical fibre rollouts to stimulate investment

Paris, 22 June 2009

Deploying new ultra high-speed digital networks nationwide constitutes a major challenge for France, from both an economic and societal standpoint and in terms of regional development.

On the fixed network front, the momentum in the broadband market in France and the willingness of several operators to invest in a new fibre-to-the-home (FTTH) local loop is helping to create a unique environment in Europe, which is particularly propitious to nationwide ultra broadband rollouts.

This involves deploying new infrastructure with potentially unlimited and symmetrical bitrates and which will be used for decades to come.

This major shift in technology must not, however, result in creation of a new monopoly over the local loop.

The issues raised by nationwide fibre rollouts require an ambitious and coordinated approach, of which ARCEP is an essential component.

• Reminder of existing regulatory provisions

 

Ultra-fast broadband regulation contains two points:

• Regulation of France Telecom civil engineering (ducts)

 

Stipulated in mid-2008 as part of the market analysis performed by the Authority, it allows alternative operators to deploy their optical fibre networks under the same conditions as France Telecom, keeping in mind that civil engineering accounts for between 50% and 80% of the cost of deploying an optical fibre local loop;

• Regulation of the last segment of the optical fibre network (closest to subscribers, inside buildings and up to the shared access point).

 

The legal framework was defined in summer 2008 by the Law on modernising the economy (LME) which:

- instils the principle of having operators share the last segment of the networks, thus reducing the amount of work that needs to be done on the private property while also limiting the dangers of a local monopoly forming in the buildings;

- stipulates that the shared access point will be located outside the boundaries of the public property, except in cases defined by ARCEP.

• ARCEP’s draft legal framework submitted today to public consultation

 

To kick-start this coordinated approach, investments in very densely populated areas need to be freed up as quickly as possible. The goal is to enable each operator to develop its strategy according to its technological choices.

The Authority is not seeking to impose any given technology but rather, on the contrary, to encourage their coexistence – which itself constitutes a opportunity for the still nascent ultra-fast broadband market, on both the innovation and competition fronts.

To achieve this, the draft legal framework produced by ARCEP specifies the following points:

- Very densely populated areas

These are areas with a concentrated population where it is economically possible for several operators to deploy their own infrastructure, in this case optical fibre networks, in the vicinity of customer premises.

148 municipalities are concerned at this point, representing 5.16 million households (more than half of which are outside the metropolitan Paris area), including 3 million which can be served immediately.

• Cases where the shared access point can be located inside the private property

 

ARCEP has today defined the exceptions to the principle stipulated in the law of having the network share point located outside the boundaries of the private property. These exceptions are confined to very densely populated areas only, where the deployment of several dense networks is possible. The shared access point can be located on private property in two cases:

- A technologically neutral framework for deploying optical fibre in buildings

In a bid to ensure a neutral approach to operators’ technical-economic choices, ARCEP proposes:

- the optional installation of additional dedicated fibre: any operator may request that the building operator (i.e. the operator appointed by the property owner to outfit the building with optical fibre) install an additional dedicated fibre on its behalf for each unit, in exchange for pre-financing its installation and co-financing of the initial investment;

- installation of a cross-connection point: all operators are guaranteed the option of having a cross-connection apparatus installed on its behalf, at the shared access point, for instance.

This provision does not impose a multi-fibre standard but gives operators the ability to exercise that option.

It has a positive impact on the competition dynamic and offers a guarantee for the future without creating excessive restrictions for operators. First, it involves a modest additional cost compared to a single fibre architecture and, second, it stimulates investment in outfitting buildings with fibre by encouraging shared costs, hence shared risks.

From a consumer standpoint, installing additional fibre will make it easier for them to switch operators (without losing their service) and to subscribe to different operators’ services. For property co-owners and residents, this option should limit service calls in the long run, particularly at the shared access point located inside of buildings.

• ARCEP publishes a new version of the sample agreement that property owners can sign immediately

 

After a series of talks with players from the real estate sector (co-op boards, property managers, trustees, property co-owners, landlord and consumer association representatives) and the leading operators (France Telecom, Free, Numéricâble and SFR), an updated version of the sample agreement produced by ARCEP in 2008 has been published.

This document achieved full consensus. Operators’ signature of this sample agreement guarantees property owners the installation of fibre in their building under satisfactory terms and conditions, provided the building operator complies with the regulation defined by ARCEP.

• Procedure that is currently underway expected to result in the official adoption of decisions in the autumn

 

The Authority will consult with the competition authority, the Consultative Committee for Electronic Communication Networks and Services, CCRSCE (Commission consultative des réseaux et services de communications électroniques) and the European Commission on these drafts. The decisions will then be submitted to the Minister responsible for electronic communications for endorsement.

These decisions are thus expected to come into effect in autumn 2009.

• ARCEP continues its work on ultra fast broadband solutions

 

Outside of very densely populated areas, the implementation of a system of infrastructure sharing higher up in the network is a more complicated matter, and one that requires greater cooperation between the players.

A second stage of work has now begun under the aegis of ARCEP, which involves close collaboration between operators, local authorities and the Caisse des dépôts et consignations – the purpose being to specify the methods for deploying operators’ networks or public-initiative networks in less densely populated areas.

This new work will be based on the efforts of technical groups that will perform a new series of trials.