Communiqué de presse

ARCEP launches a public consultation on its draft decisions until 15 July

Paris, 15 June 2005

ARCEP is launching a public consultation on its draft market analysis for fixed telephony, prior to submission to the European Commission. The consultation will run until mid July with ARCEP adopting its final decisions at the end of the summer. These decisions will transfer responsibility for retail pricing controls from the government to ARCEP in September, and will require that France Telecom publish two reference offers: one for interconnection services and one for wholesale sales of access to telephone service. ARCEP’s procedure is technologically neutral, it therefore integrates services using the "voice on IP" technology when they can be substituted for traditional services.


Autorité de régulation des communications électroniques and des postes (ARCEP) is submitting for public consultation two draft decisions on its relevant market analysis of fixed telephony :

- The first concerns :

. retail markets (access and communications)
. wholesale markets (call origination, carriage and termination), except for call termination services to alternative operators
(This draft decision follows the public consultation of July 2004 and the opinion of the competition authority, Conseil de la concurrence, of February 2005).

- The second draft decision concerns the geographic call termination markets of other operators on the fixed local loop.
(This draft decision follows the public consultation of January 2005 and the opinion of the competition authority, Conseil de la concurrence, of May 2005).

  • Retail fixed telephony market analysis

Six markets have been delimited as fixed telephony retail markets: three residential markets and three professional markets; these cover access to the public telephone network as well as national and international calls.


ARCEP has considered the observations of the Conseil de la concurrence and operators and modified the delimitation of the market as established in December 2004. As a result, services used primarily to access the telephone network, for both the residential and professional markets, are now considered as access to the public telephone network. All telephone calls are included in the same market, including "voice on IP" (VoIP).


For the general public, double play and triple play offers (high-speed Internet, telephony, television) are not included in the relevant market, and are therefore not subject to sector-based regulation. For the business segment, the delimitation chosen includes in the relevant market the components of telephone access provided in leased line services, and excludes "all IP" telephone services provided on virtual private networks.


ARCEP has analysed these markets, and concluded that they are pertinent for ex ante regulation, given their obstacles to competition, and that France Telecom has significant power on each of them.


As a result, ARCEP plans to impose the following obligations on France Telecom:
  no abusive coupling
  no excessive pricing
  no predatory pricing
and, to monitor their respect:
  prior or subsequent information on pricing
  multi-year pricing framework for fixed-mobile calls
  accounting obligations



Two points should be noted: these obligations do not apply to "voice on IP" (VoIP), and major professional contracts may be exempted from prior submission.


On the first point, ARCEP has taken into account the maturity of the retail fixed telephony markets and the persistence of France Telecom’s quasi monopoly on the retail access market. This situation is in sharp contrast with that of the multi-service offer market, which includes VoIP offers, and the wealth of underlying wholesale offers, which guarantee that all players have the possibility of replicating France Telecom’s offers.


As a result, ARCEP considers that it is not warranted to extend the scope of pricing controls to include "voice on IP" offers. Nonetheless, ARCEP will closely monitor competition on this market segment and, if appropriate, may decide to impose additional obligations on France Telecom.


Moreover, the drafting of major contracts seems too complex to be subject to prior submission. Therefore, ARCEP considers it pertinent to exempt from this obligation contracts whose annual sales for relevant market services equal or exceed one million euros. This exemption requires, however, that France Telecom inform ARCEP on an annual basis of the volumes and sales of each contract of this type. Depending on the results of the public consultation which begins today, ARCEP may modify these elements prior to submitting them to the European Commission.

  • Wholesale fixed telephony market analysis

As concerns the market delimitation, ARCEP has defined a national market for call origination and another call termination market per local loop operator for geographic numbers (call termination services to alternative operators will be covered by the second decision). Carriage services will be covered by two types of markets, in order to take account of France’s unique situation (Metropolitan France and the DOM).


ARCEP has also added a prospective dimension to the definition of these markets, highlighting that the call origination, carriage and termination products which might in the future be exchanged using technologies other than that currently used (based on the public switched network), would be de facto included in the same markets, in accordance with the principle of technological neutrality. In particular, it is probable that interconnection services will soon be delivered on VoIP interfaces. These services will be included in these markets.


ARCEP has analysed these markets, and concluded that they are pertinent for ex ante regulation, given their obstacles to competition, and that France Telecom has significant power on each of them.


In addition to the obligation to provide the access and interconnection services required for carrier selection, ARCEP has imposed on France Telecom the obligation to accede to any reasonable request for access, the obligation of transparency and non-discrimination as well accounting obligations for all of these markets. It also requires that France Telecom publish a detailed technical and pricing offer for interconnection and access, in which it must include structural interconnection services for the market it currently offers (interfaced with the public switched network). Finally, ARCEP requires that France Telecom ensure the prices of its call origination and termination services, as well as the inter-territory carriage services, are cost oriented. For other services, France Telecom must practice neither excessive nor predatory prices.


ARCEP also requires France Telecom to publish a reference offer called "telephone service", in which it must specify the access services it will offer to allow operators to propose complete telephone services to users connected to France Telecom's local loop, including the subscription to the service. The details of this offer will be established in a later decision, given the multilateral works currently underway on this subject.

  • Market analysis of geographic call termination on alternative fixed networks

On 11 May 2005, Conseil de la concurrence published its opinion of the market analysis of geographic call termination on the networks of alternative fixed operators. It confirmed ARCEP’s analysis that each operator had significant market power for call termination to geographic numbers on its own network.


At this point, the analysis of geographic call termination does not include call termination services for calls to 087B numbers.


ARCEP plans to impose obligations of access, non-discrimination and transparency, and to forbid excessive pricing on each of the powerful operators.

  • The consultation

The comments that ARCEP seeks on this draft decision will be made public. Since an initial consultation has already been held, players are invited to discuss elements which have since undergone substantial modifications.


Once the results of this consultation have been considered, the final decisions on the definition of relevant fixed telephony markets, the designation of operators having significant influence on these markets and the obligations imposed on them will be submitted to the European Commission, in accordance with article 7 of the "framework" directive and articles D.301 to D.304 of the Post and Electronic Communications Code.

Linked documents

 The draft decision concerning fixed telephony markets is available for downloading (pdf - 1.36 Mo)  fr  The draft decision concerning fixed geographic call termination on alternative networks markets (pdf - 410 Ko)  fr
Comments should be sent to ARCEP, before 15 July 2005, preferably by e-mail to the following address:  fixe(@) , or to the postal address below:

Autorité de Régulation
des communications électroniques et des postes (ARCEP) Consultation publique "Téléphone fixe" Service "Régulation des marchés fixe et mobile" 7, Square Max Hymans 75730 Paris Cedex 15 France