In an injunction to France Telecom, ART establishes the economic and competition conditions for the establishment of universal directories and directory services

Paris, 26 September 2003

Autorité de régulation des télécommunications (ART) has ruled on a complaint lodged by Iliad concerning a dispute with France Telecom regarding access to the incumbent operator’s list of subscribers for the provision of universal directory services.

ART has directed France Telecom to propose to Iliad, within 60 days, an offer which respects the principles of cost orientation and non-discrimination.

• Necessary for the development of universal directories and universal directory services

To date in France, fixed-line local loop operators and mobile operators have all had their own lists of subscribers.

However, in accordance with the Post and Telecommunications Code, one of the components of universal service is a directory containing all subscribers, both electronic (Minitel or Internet) and printed. Another component is the provision of telephone directory services.

In order to provide these services, the publishers of directories and the providers of directory services must obtain subscriber lists from all telecoms operators, both fixed and mobile.

The means of obtaining access to these lists are covered by both the law and regulations requiring non-discriminatory access and a fee reflecting costs, as well as the protection of personal rights. These measures have been defined in an implementing decree, published on 6^th August, which will make it possible to establish true universal directories and directory services, which include mobile subscribers.

The dispute between Iliad and France Telecom concerned the technical and pricing conditions of access to France Telecom’s list of subscribers, which is essential for the development of universal directories and universal directory services under competitive conditions.

• The dispute between Iliad and France Telecom

Iliad requested access to France Telecom’s list of subscribers in order to provide universal directory services.

The incumbent operator offered access to its directory base under the conditions established in its pricing catalogue. Iliad considered that these conditions were not in conformity with regulatory obligations.

Therefore, in March 2003, Iliad submitted a dispute resolution request asking ART to rule on the non-conformity of the offer and to direct France Telecom to present an offer which respects the conditions of cost orientation and non discrimination, in particular.

• ART considers that France Telecom’s offer does not respect the principles of cost orientation and non discrimination

=> Cost orientation

ART noted that there was a significant discrepancy between the incumbent operator’s revenues generated by access to its subscriber base and the cost of creating the base, and concluded therefore, that France Telecom’s offer was not cost oriented.

ART’s analysis is part of a more general concern for access to subscriber lists, an issue which the Conseil de Concurrence also ruled on on 12^th September 2003.

The Conseil and ART have both ruled on disputes regarding access to France Telecom’s subscriber lists, but in different legal frameworks. ART ruled in application of article L. 33-4 of the Post and Telecommunications Code, as concerns the provision of universal directory services and the publication of universal directories, whereas the Conseil de la Concurrence’s ruling was based on the general framework of competition law on the practices of handing over subscriber lists for the publication of commercial directories. ART has carefully analysed the Conseil de la Concurrence’s decision, which concerned the cost orientation of the access offer.

=> The principle of non-discrimination

It appeared to ART that the structure of France Telecom’s pricing offer would restrict the development of competition.

In particular, while France Telecom’s flat-rate pricing allows access to the entire subscriber base at a single price and for a specific use, the weight of the charge varies significantly according to players’ volumes of activity on the retail directory and directory service market. The decision to privilege players with the largest volumes of activity by allowing them to benefit from such major effects of size, is not based on cost orientation and introduces a major entry barrier to this market. It also privileges major players without any justification in terms of cost.

=> ART set orientations which would open this sector to competition

ART directed France Telecom to propose to Iliad, within 60 days, an offer which respects the principles of cost orientation and non-discrimination.

Thus, ART’s decision, while respecting the general principle of cost-oriented prices, establishes pricing which guarantees as much as possible equivalent conditions of access to the subscriber list to all players who also operate in equivalent conditions in terms of market and volumes of activity.

• ART will launch an initiative to facilitate the implementation of universal directories

In addition to this dispute, which concerned France Telecom’s subscriber lists, ART emphasises that the implementation of universal directories is a complex process of concern to many players.

In order to assist this process, ART will organise discussions with involved players in the near future.