Communiqué de presse - Superfast Broadband

Arcep sets the regulatory framework for Orange fixed networks for the next three years

Paris, 14 December 2017

Today Arcep is adopting its analysis decisions on broadband and superfast broadband markets, for the period running from 2017 to 2020, after having received the European Commission's observations.

These decisions mark the end of a more than year-lng work cycle, punctuated by an ongoing dialogue with operators, the Competition Authority's opinion and the European Commission's observations. The purpose of these draft decisions is to define the asymmetric regulation - i.e. which applies only to the country's SMP operator, Orange - for the three broadband and superfast broadband markets, namely:

- Wholesale local access provided at a fixed location (Market 3a);
- Wholesale central access provided at a fixed location for mass-market products (Market 3b); ;
- Wholesale high-quality access provided at a fixed location (Market 4).

Structural decisions for accelerating fibre rollouts over the next three years across the whole of France

These decisions, which will shape regulation for the next three years, aim to accelerate the pace of optical fibre rollouts across the country. Optical fibre is the baseline communications infrastructure for the coming decades, and prepares the "Gigabit society" being promoted by the European Commission, the imperative need to digitise the French economy through its SMEs. From operators' perspective, these decisions seek to satisfy their need for a clear and stable regulatory framework, to accelerate subscribers' migration to superfast access to be able to monetise investments and foster future rollouts everywhere, including rural territories.

What supervisory regime for Orange residential FttH access? Pro-investment regulation to involve all operators in the work being done on fibre rollouts and regional connectivity

By eliciting the involvement of every operator, the regulator hopes to maximise the sector's investment and marketing capabilities, and thereby accelerate broadband subscribers' migration to superfast access plans.

Changes to the regulatory framework will enable more fluid rollout processes thanks to a more streamlined civil engineering offer from Orange, in addition to making alternative operators more autonomous and improving the indicators used to monitor quality of service, and so to be able to prevent any deterioration of the network.

On the matter of ensuring access to fibre to the home (FttH) networks, Orange has proposed changes designed to address the operational difficulties its competitors have encountered in marketing their fibre products. Arcep has taken note of the improvements that Orange has already anticipated the implementation. In light of these concrete changes, the regulator does not believe it is currently necessary to introduce specific obligations that apply only to Orange.

Echoing the European Commission's observations, Arcep will be especially mindful of ensuring that Orange put these changes into practice, and will perform its first assessment before 1 September 2018.

For Sébastien Soriano, 'Arcep has thus put a pragmatic approach on the table. Of course, if it does not work Arcep could employ methods that will be more stringent for Orange, imposing an obligation of means and no longer of results.' (AFP, Monday, 11 December 2017)

Business market: redrawing the competition map by January 2018, to democratise optical fibre access in micro, small and medium enterprises, and help French businesses in their digital transition

For Arcep, the goal is to capitalise on the arrival of residential fibre (FttH) to expand this market, which is vital for the competitiveness of French economy, and currently heavily dominated by Orange. The objective being to provide the country's many micro, small and medium-size enterprises with a real choice, born of innovations in fibre-based services and at affordable prices, while also ensuring a high standard of service, notably guaranteed service restoration time in case of a malfunction.

By imposing several new obligations on Orange, Arcep's actions aim to:

- stimulate the emergence of new access products, midway between residential FttH plans and customised solutions designed for large corporations, via tiered quality of service levels;

- foster dynamic competition by laying the groundwork for the development of a wholesale market populated by at least three national infrastructure operators, dedicated to a business clientele;

- allow retail market business operators to flourish and to innovate by capitalising on this wholesale market, and on the ability to resell Orange FttH retail products.

On this matter, the Chairman of Arcep stated that, 'we have high ambitions for the business market. We will therefore keep a very close eye on these developments. Here, the first half of 2018 will be critical, and we hope to see a change in model with the arrival of wholesale market players who are capable of bolstering competition in the fibre market for businesses.' (AFP, Monday, 11 December 2017)

Arcep will be especially vigilant, to ensure the timetable for developing new offers is fully respected by Orange.

Civil engineering prices: encouraging the development of new networks by providing greater simplicity and predictability

Arcep is also adopting a new decision on the prices charged for using Orange local loop civil engineering. This decision implementing the analysis decision on market 3a was also subject to two public consultations (7) and notified to the European Commission (8). It maintains the same principles as the 2010 decision (9) which it replaces, while also providing market players with a more simplified and thus more predictable framework. To this end, Arcep has also published additional transparency tools regarding the evolution of this tariff which is vital to the deployment of new superfast networks (10).

To find out more

Arcep's market analyses, a more than one-year process of in-depth consultation with the sector:

- publication of a "current status and future outlook" document (1);
- first public consultation on draft decisions (2);
- Competition Authority's opinion (3);
- second public consultation on draft decisions (4);
- European Commission's observations (5);
- in-depth dialogue with local authorities within GRACO (6) technical meetings, and meeting throughout the process.

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(1) Press release of 21 July 2016
(2) Press release of 9 February 2017
(3) Opinion No. 17-A-09 of 5 May 2017 (pdf - 332KB)
(4) Press release of 27 July 2017
(5) European Commission decision of 24 November 2017 (market Analysis).
(pdf - 491KB)
(6) Discussion forum between Arcep, local authorities and operators
(7) Press release of 9 February 2017, Press release of 11 May 2017
(8) European Commission decision of 24 November 2017
(pdf - 419KB)
(9) Decision No. 2010-1211 of 9 November 2010 (pdf - 255KB)
(10) Cost projection (xlsx - 23KB) and civil engineering price simulation tools (xlsx - 16.17KB)