Internet service provider, America Online Inc; German media group, Bertelsmann; and two units from the French Vivendi group (formerly the Compagnie Generale des Eaux); have finalized a deal to form an alliance for internet service in France, according to a spokesperson for one of the Vivendi units, pay TV operator Canal+. The other Vivendi arm in the deal is telco Cegetel. The four groups actually began negotiations for the alliance in January this year, when they signed a memorandum of understanding on the matter. The deal gives Cegetel a 36.7% and Canal+ 18.3% in AOL France and Compuserve France, bringing the Vivendi group’s share collectively to 55%. America Online and Bertelsmann will jointly hold the other 45%. The main thrust of the alliance will be to push development of the internet in France, where it has suffered from competition with the well- established Minitel, a proprietary text-based on-line service. Some 2% of the country’s population is currently on the net, compared to 6% in the UK, 7% in Germany and 20% in the US. The partners plan services over the phone, called AOL par Cegetel and Compuserve par Cegetel. There will also be a more consumer- oriented service via cable or satellite, called AOL par Canal+, which will basically carry the ISP’s sports and entertainment feeds. That said, the new-look ISP will clearly also represent a muscular competitor for FranceTelecom’s Wanadoo internet offering. Now that the agreement between the four partners has been concluded, they have notified the European Commission, whose competition authority DG4 will be studying the deal for signs of monopolistic or dominant-player tendencies.
