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ARCEP continues to ease regulation on fixed telephony retail markets by raising France Telecom’s obligations on residential markets. In this way, the end consumer will benefit from a market richer in innovative offers while still enjoying protection from regulation of France Telecom’s base prices under universal service.
ARCEP plans to ease regulation on fixed telephony business markets only once the quality of service offered by France Telecom to alternative operators is considered satisfactory.
The deregulation of retail fixed telephony residential markets eases constraints on France Telecom and benefits the end consumer by encouraging innovation
During its market analyses, ARCEP prefers to impose on operators obligations on wholesale markets (also called "intermediate markets") to prevent competition problems identified on retail markets. Nevertheless, in 2005, given the difficulty in foreseeing the effect of obligations imposed on these wholesale markets on the functioning of competition, ARCEP considered it necessary to complete this measure with obligations applied to France Telecom directly on fixed telephony retail markets.
After easing regulation of retail residential markets in 2006, ARCEP is now continuing this by raising most of the remaining obligations on these markets.
This is made possible through the implementation of the wholesale subscription sale offer which had been imposed on France Telecom, with initial sales in 2006.
This dynamic regulation of the fixed telephony market (cf. appendix 1) let the consumer enjoy innovative offers, such as unlimited call offers as early as 2004, and, in recent months, the first offers combining subscriptions and calls for a flat rate offered by all operators.
Telephone call base rates remain regulated to protect the end consumer
While easing its regulatory action on fixed telephony retail markets, ARCEP continues to protect the consumer, in particular through universal service.
France Telecom’s services covered by universal service (subscription, "base" tariff national and international calls) remain subject to the regulator’s control, which ensures that they are affordable. To this end, ARCEP established a multi-year pricing framework for national calls in 2005 which covers national calls under the universal service offer and ensures that these prices are reduced by 3% over the period 2005-2008 (cf. appendix 2). Remaining universal service prices, i.e. primarily those for international calls as well as telephone subscription fees, are subject to prior individual checks which ensure directly that they are affordable.
It is also important to note that other deregulated France Telecom retail prices may be appealed to the competition authority, Conseil de competition, under the normal framework of competition law.
The easing of regulation on business fixed telephony markets will be considered only once the quality of service of France Telecom’s wholesale offers improves
The alleviation measure currently proposed by ARCEP does not involve raising the obligations currently in force on business fixed telephony markets which do not yet present satisfactory and complete characteristics for regulation to be removed.
Indeed, on business markets where the concept of quality of service (guaranteed effective recovery times, or guaranteed service availability) is structuring, the quality offered by France Telecom to alternative operators buying its wholesale offers could still be improved.
So, ARCEP believes that before taking on any new phase of alleviating retail obligations imposed on France Telecom on business markets, it should first check that France Telecom has established optimal and complete conditions, in terms of quality of service, allowing alternative operators to reproduce its offers.
So, ARCEP is conducting works with all sector players which will allow it to identify reliable indicators on all of France Telecom's wholesale offers underpinning the retail offers (wholesale access to telephone service, unbundling, regional ADSL collection offer, capacity services, etc) and to conduct a precise review.
Source: ARCEP, France