France’s Council of Ministers sent the text of its telecommunications deregulation law to Parliament for debate on Wednesday that, in principle, eliminates France Telecom’s monopoly, while preserving certain key privileges in its role as the state-owned carrier. The law will also establish an ostensibly independent, three-member Telecommunications Regulatory Authority by January 1 1997 to oversee the technical aspects of deregulation and a national agency to manage radio freqencies. The members of the regulatory agency will be appointed by the government for non-renewable, irrevocable six- year terms, Fillon said, a status he believes will ensure their independence. The government, however, will remain the largest shareholder in France Telecom, which does not preclude a certain prejudice among those members from the outset. The agency’s functions will include proposing the technical rules for applying laws and decrees; authorizing independent networks; attributing numbers; approving equipment and interconnect tariffs; ensuring respect for licenses; mediating interconnect and network access conflicts; meting out administrative and financial penalties; and assisting the minister in international negotiations. France Telecom will be the only carrier charged with providing universal service, that is, providing specially tariffed service for the disadvantaged, directory assistance and phone booths. The cost of providing this service will be financed through interconnection charges and contributions from all operators to a universal service fund. Minister of Posts, Telecommunications & Space Francois Fillon said that naming France Telecom as the only operator capable of providing such service throughout the country for the next several years, would not prevent another operator from installing phone boxes or directory assistance service. But they won’t get any public funds to do so, he said. Thus, since operators will be obliged to finance such operations for France Telecom, it is highly unlikely that anyone else will undertake them. Fillon noted that interconnection charges will be different for network operators and service providers, implying that companies that invest in a network infrastructure rather than just reselling capacity would get better rates. Contributions to the fund, the minister said, will be prorated according to the operator’s share of the total telephony market. This deregulation is total, said Fillon. There will be no limit on the number of operators, and they will have the right to do anything. Nowhere does the law mention the transformation of France Telecom into a private company; fear of the unions was apparently too fresh in the government’s memory. The law provides that the state will take over the financing of high-level telecommunications instruction next year and will continue to pay for the research it requests from France’s CNET National Center for Telecommunications Studies. When necessary, it will have the right to impose security and defense-related requirements on operators that may involve unspecified costs. Fillon said he was confident that the law will bring all of the benefits of competition, but with the appropriate regulation to France, where telecommunications account for only 1.6% of gross national product, compared to 2.1% in the UK and 2.2% in Sweden.
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