ART publishes its third market analysis public consultation about fixed-telephony markets

Paris, 9 July 2004

The Telecommunications Regulatory Authority published on July 9th its third public consultation on market analysis, which concerns the fixed-telephony retail and wholesale markets.

 

This document contains ART's analysis of the competitive situation in these markets.

 

It defines the scope of relevant markets to be ruled by ex ante regulation, identifies operators with significant market power in each market (SMP operators) and outlines the obligations ART considers necessary to promote competition.

 

This document is made available for public consultation for a period of 6 weeks.

 

After taking into account the comments to be received, ART will submit its analysis (for recommendation) to the French Competition Authority, "le Conseil de la Concurrence", which will rule on definition of the markets and on the designation of SMP operators. The draft decisions corresponding to market definition, designation of SMP operators and the specific obligations to be imposed will then be forwarded to the European Commission and the other national regulatory authorities of the EU member states.

 

Definition of relevant markets

 

The retail markets are defined for France as a whole (metropolitan France + overseas territories) with the exception of the Saint-Pierre-et-Miquelon administrative area. ART proposes identifying 4 relevant access markets and 3 telephony calls markets. Each market in the second category is further divided into a residential market and a non-residential one:

 

  • the access market for residential customers
  •  

  • the three access markets for non-residential customers: analogue, basic-rate digital and primary-rate digital access
  •  

  • the local and national calls markets
  •  

  • the fixed-to-mobile calls markets
  •  

  • the international calls markets.
  •  

 

Product

Customer segment

 

 

 

Retail

markets

Analogue access

Residential

Non-residential

Basic-rate digital access

Non-residential

Primary-rate digital access

Non-residential

Local and national calls

Residential

Non-residential

Fixed-to-mobile calls

Residential

Non-residential

International calls

Residential

Non-residential

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The corresponding wholesale markets are:

  • call origination at the local exchange (the intra-CA market)
  • conveyance of traffic between a local exchange and a tandem exchange (the CA-CT market)
  • conveyance of traffic between two tandem exchanges in metropolitan France and conveyance of traffic between two tandem exchanges located in two different of the following territories : metropolitan France, the 4 overseas departments, Mayotte and Saint-Pierre-et-Miquelon (the CT-CT markets)
  • call termination from a local exchange, in the network of France Telecom.
  •  

 

 

 

Product

Customer segment

 

 

Wholesale markets

Call origination at the local exchange

 

 

Electronic communications operators

Call termination from a local exchange of France Telecom network

CA-CT transit

CT-CT transit
Metropolitan France

CT-CT transit
Overseas départements

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A separate public consultation will be launched within the fall concerning the analysis of the "call termination on each alternative local loop operator network" markets.


Identification of SMP operators

 

ART's analysis leads to consider that France Telecom has significant market power on all of these markets.

The analysis focused on observation of the incumbent operator's market share and on the other criteria for assessing its capacity to behave regardless of its competitors and customers.


The proposed remedies: reference offer for interconnection / subscription resale / prior notification of tariffs and accounting separation

 

In accordance to the spirit of the new framework, ART was keen first to define the measures that it considered most appropriate in the wholesale markets to allow the establishment of strong competition in the retail markets in the long run.

 

- Hence, ART proposes imposing the following obligations on France Telecom in the wholesale markets: obligation to publish a reference offer covering all interconnection services along the same lines as the existing interconnection catalogue, obligation to meet reasonable requests for access and interconnection, obligations of non-discrimination and transparency, charge control, accounting separation and cost accounting obligations.

 

Moreover, ART proposes requiring France Telecom to sell a new wholesale connection service(subscription resale).

 

- ART proposes maintaining ex ante regulation of the retail markets before the measures decided for the wholesale markets have a significant impact: obligation of non-discrimination, prohibition against unreasonable bundling of services, against excessive pricing or against prices resulting in forced exit of competitors, obligation to reflect true costs, prior notification of tariffs, accounting separation and cost accounting obligations.

 

As far as the new regulatory framework allows it, ART proposes to ease the scope of tariff control by establishing selective ex ante control of tariff offers, thereby announcing its intention to reduce the scope of the control and to initiate the process of repositioning regulation from the retail markets towards the wholesale markets.

 

Replies to the call for comments should be sent to: fixe(@)art-telecom.fr