Image

The European Commission has today issued a press release in which it announces that it has endorsed the market definition and market analysis proposals of the French regulatory authority ARCEP relating to wholesale and retail voice markets (1-6 and 8-9-10).


Update 18 Sep 2005: The full text of two separate eCCTF letters (addressing retail markets and wholesale markets respectively) has now been released. The letters have been added to the T-REGS repository of eCCTF letters, which can be accessed by clicking here (access is restricted to registered users only, but registration is free of charge and subject to our Privacy Statement).


One of the key points of interest in this notification is the ARCEP's proposal to define retail telephone calls markets (Markets 3-6 of the Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation) in accordance with the Recommendation, and to find France Télécom as having Significant Market Power on these markets, but to put forward differentiated (i.e. less) regulatory obligations ('remedies') for Voice over Broadband (VoB) than for traditional PSTN/ISDN telephony and for contracts having an annual value exceeding €500.000.


It would appear (to be confirmed upon study of the eCCTF letter's full text - this analysis will follow later) that the European Commission has endorsed both of these proposals. As regards VoB, the European Commission's press release states the following:


[...] ARCEP concludes that VoB products are now easy to install, use an identical telephony device with a dial tone and allow internet telephony call carriers to ensure and guarantee the same degree of quality and reliability as traditional PSTN carriers. In addition, VoB enables end users to call and to be called by a range of other VoB or PSTN customers.


Conversely, “Voice over the (public) Internet” (VoI) require the installation of software on a computer and are therefore available only to a limited customer base. In addition, unlike VoB telephony services, providers of VoI services are not able to guarantee a quality of services comparable to traditional telephony, since they do not control the underlying broadband infrastructure. Therefore, such services are not part of the relevant markets under review.


ARCEP considers that France Télécom is a dominant player in the provision of telephony services under review, but takes the view that regulation should be limited to the PSTN segment whereas regulation of France Télécom’s retail VoB services is not necessary at present. [...]


and


[...] In a letter sent today to ARCEP, the Commission considers that ARCEP’s decision not to impose ex ante obligations on Voice over broadband (VoB) is justified because VoB is provided by via wholesale access lines that are already regulated and because VoB, as an alternative service to “PSTN” (traditional telephone lines), can in principle be provided by any broadband access provider.


The Commission also notes the existing wholesale regulatory obligations on local loop and wholesale broadband access and ARCEP’s commitment to monitor closely this part of the retail market for any anti-competitive practices. It considers that, should such practices occur (e.g. predatory pricing, unfair bundling), ARCEP has both the right and the duty to take appropriate steps.


Finally, the Commission also invites ARCEP to ensure full, effective and appropriate enforcement of the obligations imposed in the corresponding wholesale markets as soon as possible, and to undertake to review its present retail market analysis following such enforcement and in any case before the proposed 2008 review. [...]


The full text of European Commission press release IP/05/1146 can be accessed by clicking here.