The French regulatory authority ART has today published its formal Opinion (Avis n° 04-615) on proposals put forward by France Télécom to substantially reduce various elements of the wholesale charges for the so-called 'Option 5' «Accès IP/ADSL» and «Collecte IP/ADSL», which constitutes a form of bitstream access with IP hand-over.

This Opinion was adopted in application of article 133 of the new law on electronic communications of 9 July 2004, but the ART makes clear that the new law maintains previous regulation in effect until the market analysis under the new regulatory framework is completed.

The ART rejects France Télécom's proposals in a particularly strongly worded statement, noting that these proposals would have the effect of preempting the outcome of the market analysis, and that accepting the proposed charge reductions would destabilise the business plans of operators making use of local loop unbundling, and would structurally limit the geographic expansion of unbundling.

More specifically, the ART concludes the following:

  • The proposals on backhaul charges (-24%/-25%) are deemed unacceptable, in that they would render uneconomic the deployment of unbundling by alternative operators beyond the 800 to 900 largest MDF sites in France (alternative operators are currently present in 730 MDF sites).

  • The proposals on access segment charges (-6% to -22%), depending on the bandwidth of the connection) are deemed unacceptable UNLESS they would be accompanied by a reduction of unbundling/shared access charges.

The ART Opinion is slightly more favourable on a possible reduction of the access segment charge for 2048 kbit/s, subject to strict conditions, and insofar as the wholesale charge for 'Option 3' «ADSL Connect ATM» (bitstream with ATM hand-over) is also reduced by a maximum of €5.

More generally, the ART expresses its position that reductions of 'Option 5' as well as 'Option 3' wholesale charges are not desirable during 2004, and the document highlights the spectacular development of local loop unbundling/shared access in France (the number of shared access lines increased from 40.000 to 730.000 between July 2003 and July 2004).

The timing of this ART Opinion is rather special, given that the public consultation on the ART's proposals for the future regulation of Markets 11 (wholesale unbundled access) and 12 (wholesale broadband access) is ongoing (deadline 9 August 2004, see also a previous T-REGS news item), and that the ART is proposing the re-qualification of some access products (including part of 'Option 5') in its consultation document. The necessity to take a decision at this time was triggered by an application filed by France Télécom on 6 July 2004.

The full text (in French) of Avis n° 04-615 can be accessed by clicking here.

For a discussion (the ART Opinion contains various elements that cannot be summarised in a short news item), please contact Yves Blondeel.