Estimated cost of universal service for the year 2000

Paris, 20 January 2000

The Secretary of State for Industry has just announced the estimated cost of universal service for 2000 and has determined the contributions due from operators, in accordance with the measures set by Autorité de régulation des télécommunications (ART).

Since 1^st January 2000, the cost of universal service is financed under a new system established by the law of 1996. The Secretary of State for Industry decided to move to the new system on 29 September 1999, upon a proposal from Art. Under the system, the component related to the imbalance of France Telecom’s pricing structure no longer exists¹ ; it is replaced by the payment by operators to France Telecom of a surcharge to interconnection charges; the cost of universal service is now fully financed by the universal service fund to which operators contribute on a pro rata basis of their traffic volume.

The evaluation of the cost of universal service for 2000 applies and extends the methodological improvements made in 1999, especially with respect to the creation of a calculation model for the cost of unprofitable subscribers located in profitable zones. Moreover, the cost of geographical deaveraging is now calculated based on real observation and not on a statistical observation of the physical characteristics of the local network for France Telecom, which decreases the cost of unprofitable zones.

1- It had been reduced from FRF 2,027 million to FRF 16 million by 1999 following France Telecom's increase in the cost of the main subscription on 1st March.