Clarification brought to the framework governing FTTH rollouts in very high-density areas after the Paris Court of Appeals upholds an ARCEP decision.

Paris, 30th January 2012

Through an order dated 19th January 2012, the Paris Court of Appeals rejected France Telecom's appeal of a decision issued by ARCEP on 16th November 2010 concerning a dispute between Bouygues Telecom and France Telecom. The dispute was over the France Telecom offer for accessing the last metres of optical fibre lines (i.e. installed indoors) and purchased by Bouygues Telecom in what are referred to as "very high-density areas" in France.

The Court of Appeals confirmed, first, that when ARCEP is empowered to issue a regulatory decision on a given topic, this does not prevent if from being equally competent to settle a dispute on that same topic.

Second, the Court maintained that ARCEP could require France Telecom to agree to a posteriori co-financing of its network which would lessen the carrier's property rights, provided it was justified by public economics and the incumbent carrier receive fair financial compensation in exchange.

On the matter of sharing the cost of "branching units" (1), the Court confirmed that it was essential that the process not result in a barrier to entry for a new entrant operator with a small market share, and that the cost-sharing scheme imposed by ARCEP (i.e. the operator providing the service is to assume 90% of the costs) adequately reconciles the interests of the different parties.

The modalities of application for the regulatory framework governing co-financing offers and for deploying branching units have thus been validated. In 2011, these modalities were also the subject of two ARCEP decisions on disputes between the firms Free Infrastructure and France Telecom which, having not been appealed, are now final.

In particular, ARCEP considered that the building operator (i.e. who installed the internal cabling in the building) must:

- either ensure the third-party operator's customer's connection to the branching unit (riser), if the operator so requests (Decision No. 2011-0846),

- or allow the third-party operator to install its customer's connection to the branching unit (riser), if the operator so requests (Decision No. 2011-0893).



(1) Deploying a branching unit involves installing an optical network unit (ONU) inside the customer premises and connecting it to a riser (box or cable) which is generally installed on the same floor. In most instances, this operation takes place when a customer subscribes to an ultra-fast broadband service after the indoor cabling has been performed in the common areas in the building.