The French regulatory authority ART today published a public consultation document in the context of the market analysis procedures in application of the new EU regulatory framework for electronic communications.
(the French transposition legislation has been adopted by Parliament, but has not yet been enacted)
It concerns the markets corresponding to Markets 11 and 12 of the European Commission's Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation, i.e.: "wholesale unbundled access (including shared access) to metallic loops and subloops for the purpose of providing broadband and voice services" and "wholesale broadband access".
However, the ART is putting forward refinements in terms of market definition, as follows:
The product market for unbundled access corresponds to Market 11, but is geographically split into two: France, including major overseas departments and territories (where France Télécom is the main operator of metallic access networks), and the islands of Saint Pierre and Miquelon, where SPM (a France Télécom subsidiary) is the main operator of metallic access networks (only 4500 lines).
The product market for wholesale broadband access, is considered NOT to include access to cable-tv-based networks (this stands in sharp contrast with the conclusions reached by Ofcom in the UK) and is further segmented. The ART introduces a distinction between:
a) xDSL-based bitstream access, including the so-called Option 3 (ATM interface) and Option 5 (IP interface) and also including the TurboDSL product (ATM interface - aimed at business customers) of France Télécom which today is a retail product, where traffic is handed over at regional level, corresponding to Market 12, and,
b) xDSL-based wholesale access without bandwidth guarantees, where traffic is handed-over at national level (de facto corresponding to the so-called Option 5 (IP interface) with national hand-over), which is considered not to be substitutable with the market with hand-over at regional level, and is therefore defined as a separate relevant market.
In terms of geography, the islands of Saint Pierre and Miquelon (only 4500 lines) are again considered separately.
The ART has also investigated (notably because several operators requested it) defining a relevant retail market for broadband access, but has decided against this.
For all of the markets defined (M11, M12, and Option 5 with national hand-over), France Télécom is considered by the ART to have Significant Market Power. The situation of SPM will be considered separately at a later stage.
In terms of proposed regulatory remedies, the ART essentially proposes to apply the 'full menu' of remedies from the Access and Interconnection Directive 2002/19/EC for Markets 11 and 12 (i.e. including the publication of a reference offer for access and related facilities, accounting separation and cost-orientation).
For the newly defined market corresponding to Option 5 with national hand-over, the ART proposes to maintain ex-ante regulation, but to reduce it compared to what exists today, i.e. to apply only an obligation of non-discrimination and wholesale tariff information (no reference offer), an obligation of accounting separation (no cost-orientation), and a specific wholesale tariff obligation on France Télécom "not to practice eviction tariffs" towards its competitors. It is also proposed that the obligations on Option 5 with national hand-over will be reviewed within one year from their adoption.
The deadline for responding to the ART consultation is 9 August 2004.
For an in-depth discussion, please contact Yves Blondeel.