ARCEP welcomes the Competition Authority's opinion to the Senate on ultra-fast network rollouts performed by local authorities.

Paris, 23 January 2012

ARCEP has considered local authorities to be central players in digital regional development for several years, which is why it created the public-initiative network committee back in 2004. In 2009, this became the GRACO discussion forum between ARCEP, local authorities and operators which enables ongoing dialogue, in particular on the creation of a regulatory framework.

ARCEP therefore welcomes the perspective provided by the Competition Authority's opinion, which was made public on 19th January and which helps specify the legal terms under which public-initiative projects can be prepared and put into action.
The Competition Authority's opinion echoes the analysis delivered by ARCEP, and expressed during the latest GRACO plenary meeting on 6th December of last year:

  • as fixed network rollouts are not subject to any system of authorisation, local authorities are free to deploy networks acting as informed investors - although naturally with no guarantee of having a monopoly. It is therefore in their own interest to take private operators' rollout plans into consideration, and vice-versa;

  • when they plan on subsidising their networks, local authorities must ensure that they comply with European regulation governing State aid;

  • lastly, local authorities can deploy a network throughout their entire region (which may include both profitable and unprofitable areas) using the system of State aid for services of general economic interest (SGEI), but only provided they comply with the terms of Altmark case law in content and form. They will also need to work closely with private-sector operators to define a realistic and clear-cut business model.

ARCEP welcomes the Competition Authority's view that co-investment is a crucial element in new fibre-to-the-home (FTTH) network rollouts, even in the case of public-initiative networks. The regulatory framework defined by ARCEP indeed goes a long way to encouraging undertakings to pool their investments.
ARCEP also welcomes the fact that the Competition Authority shares its conclusions on the need for operators to be very clear about their plans for local deployments, and for public authorities to verify on a regular basis that these plans are going forward.

By the same token, ARCEP can only agree with the Competition Authority's view that, although facilities-based competition continues to be beneficial for the market, undertakings will need to share passive infrastructure outside of very-high density areas. It is worth remembering that ARCEP's regulatory framework calls for 90% of network expenditures to be shared outside of these very-high density areas.

ARCEP also takes note of the Competition Authority's conclusions on the dangers of integrated operators enjoying a competitive advantage during calls for proposals for the creation and operation of public-initiative networks:

  • on the matter of technical advantages, as recommended by the Competition Authority, ARCEP has been working for several months on harmonising and standardising technical specifications, operational processes and information system interfaces. It has already planned to meet in the near future with all of the affected operators and local authority representatives to clarify solutions that will consolidate this work;

  • ARCEP has taken equal note of the Competition Authority's analysis of the commercial advantages that integrated operators could enjoy, which are issues that fall solely under the purview of competition law.

Finally, ARCEP recalls that it recently expanded the membership of the interconnection and access committee to include :

- local authority associations that specialise in digital regional development;
- and the main managers of public-initiative networks.

The next meeting of the newly-expanded committee will be on Wednesday, 8th February.