Public consultation on the re-examination of the obligations imposed on France Telecom for calls to VAS

Paris, 14 June 2007

ARCEP is submitting for consultation its proposed modification of France Telecom’s obligations on the wholesale call origination market. This adaptation of the regulation applicable to France Telecom alone due to its competitive position is based on the establishment of symmetrical regulation (i.e. applying to all operators) in May.

France Telecom’s implementation of a repayment offer for other operators, instead of the current third party invoicing offer, will help to make invoices easier to understand for France Telecom customers.

ARCEP continues its improvement process for the VAS market’s functioning

In 2006, ARCEP initiated an analysis of the functioning of the VAS value chain (08, 3BPQ and 118XYZ numbers). This showed that the increase in the number of local loop operators and service providers, which is also a factor of competition and choice for consumers, has made the task of content publishers wishing to be reached by as many subscribers as possible more complex. ARCEP has also observed increasing dissatisfaction on the part of consumers, for whom trust in the use of VAS is based in large part on improving transparency, pricing clarity and the ethical control of content.

ARCEP’s process is organised around three major stages

First, ARCEP put in place a "symmetrical" regulation decision, applicable to all operators, in order to clarify the legal framework for end-to-end accessibility of VAS and inter-operator relations. The second stage of the regulatory aspect launched today by ARCEP involves adapting, following this first stage, the so-called "asymmetrical" regulation, which is applied solely to France Telecom, and will end with the adoption and implementation of this new decision (cf. the call for public consultation appended to this press release). The third aspect of ARCEP’s action will continue through discussions with players and consumer associations aiming to ensure greater transparency and pricing clarity, which are key to restoring consumer trust in the use of these services.

ARCEP renews its call for ethical control of the content of VAS, which was formerly performed by CST-CTA, with the announced creation of a national deontological commission of on-line public communication services.

Towards greater invoice clarity for France Telecom customers

The modification of France Telecom’s offer for third-party operators should help to make invoices easier for customers to understand. Currently, France Telecom’s operator offer, called "third party billing", has VAS calls managed by third party operators which are billed in the "third section" of France Telecom customers’ invoices. This section shows the names of the technical intermediaries between France Telecom and the content publishers, which are invisible and often unknown to the consumer. The invoice is often issued by France Telecom several months after the call has been made.

Figure 1: VAS chain from the France Telecom customer to the content publisher

Before the end of the year, France Telecom customers’ invoices will have all calls to VAS in the same section, and the "third section" will disappear. France Telecom will invoice all VAS calls on its own behalf and will answer directly any question regarding these calls through its customer service, as do other fixed or mobile operators which already propose this service to their own customers.

If customers have a question regarding the "third section" of France Telecom’s invoice, depending on the VAS, they must contact either France Telecom’s customer service or the third party operator’s. By the end of this year, if there is a problem with a VAS, customers will always contact France Telecom’s customer service.

Figure 2: Changes to France Telecom’s customer invoice

Appendix

Call for public consultation on the re-examination of the obligations imposed on France Telecom for calls to VAS

ARCEP proposes modifying the obligations on the relevant call origination market

On 27 September 2005, ARCEP adopted decision number 05-0571 on the definition of the relevant fixed telephony markets, the designation of operators with significant power on these markets and the obligations imposed because of this. This market analysis decision is valid until 1^st September 2008.

In its analysis, ARCEP identified the wholesale call origination market as being relevant for ex ante sector-based regulation, on which France Telecom’s significant market power had been highlighted. Therefore, ARCEP imposed several specific obligations on France Telecom bearing on this market and its related services, in particular that of invoicing for third parties.

The regulatory framework gives ARCEP the possibility of modifying the obligations imposed on the powerful operators prior to the term of its market analysis decision, without having to revise the relevant market definition.

Given the entry into force of decision no 2007-0213 on 11 May on the symmetrical obligations imposed on the operators controlling access to the end user for routing calls to added value services, as well as the resulting change to France Telecom’s wholesales offers, ARCEP considered it justified to re-examine the remedies imposed on the wholesale call origination market.

Decision n° 2007-0213, a symmetrical regulation, establishes a number of obligations for fixed and mobile operators. Its main objective is to improve the interoperability of value-added services accessible on the public numbering plan and relations between operators. In particular, this decision submits France Telecom, and all other operators, to an obligation to grant all reasonable requests to make available a repayment offer for which ARCEP has organised several multi-lateral meetings since late 2006.

ARCEP wishes to adapt the regulation of the services related to the wholesale call origination market, in order to take into account the evolution of the wholesale offers announced by France Telecom and in particular the introduction of its new repayment service. It considers that like the current third party invoicing service, the new repayment service is a service related to call origination services for VAS. Therefore, ARCEP proposes imposing on it obligations of non-discrimination, transparency, cost accounting and account separation, as well as prohibiting excessive pricing.

The re-examination also plans to raise the obligation to provide the third-party invoicing service from France Telecom’s fixed local loop. Indeed, ARCEP considers that the obligation to provide simultaneously both third-party invoicing services and repayment services would not be reasonable, primarily because of the foreseeable increase in the costs of third party invoicing and additional implementation times for the repayment service, announced by France Telecom.

Therefore, ARCEP suggests raising the obligation on France Telecom to provide a third-party invoicing service as soon as a repayment service which is respectful of the related obligations has effectively been put in place.

Figure 3: Excerpt of the VAS value chain originating on fixed local loops

Public consultation and notification to the European Commission of the draft measures

The draft decision proposing the re-examination of remedies for the regulation of the wholesale call origination market is being submitted for public consultation and notified to the European Commission and to all National Regulation Authorities (NRA) today.

ARCEP invites contributors to express their opinions on its analysis as well as on the modification of the remedies it plans to implement upon the completion of the public consultation it is launching today and which will end on 16 July 2007.

ARCEP will adopt its final decision once it has considered the comments to the public consultation and to the notification to the European Commission and to the NRA.