Preservation of public service obligations for telecommunications services and establishment of an independent regulatory authority are among the main features of the outline of the telecommunications deregulation law presented last week by Francois Fillon, France’s Minister of Post, Telecommunications & Space. Fillon will submit the proposed law to parliamentary debate in the spring, for implementation by the deregulation date imposed by Brussels of January 1 1998. Since Fillon issued the document outlining the main themes of the law in mid-October, Bruno Lasserre, managing director of post and telecommunications, organised a public consultation, collecting comments from 94 respondents, including operators, service providers and foreign regulatory authorities. Said Lasserre, It’s true that support for the reform is not unanimous, but I would say there is a general consensus in support of universal service, even if there is dispute on the means to assure it, and on the need for regulation of the competition. For example, said Lasserre, Many people disputed the idea that France Telecom should be designated the national provider of universal service. Rather, it was thought that the country should be split into different geographic zones to allow others to compete in this area.
Universal service
It was clear that, even though France Telecom insists that universal service represents a burdensome obligation, others want to assume it and see it as an asset. France Telecom chief executive Michel Bon was not adamant about remaining the sole provider of universal service. It is a bit of a theoretical question, since we won’t be as of January 1 1998. But, anyway, it depends on what will constitute universal service, he said. If it were costly to support, he added, I would not be opposed to seeing others do it. If others were not allowed, I would demand compensation for being the only one obligated to support it. Nonetheless, said Fillon, France Telecom will, for the time being, meet all of the current obligations for public telephony service. Fillon’s proposal defines universal service broadly, and will link it for the first time in law to the term public service in order to guarantee that all French citizens have access to all technologies at the same price. The minister defines public service in telecommunications as access to vocal telephony at the same price, regardless of location; free transmission of emergency calls; directory service; phone booth installation and maintenance; provision of leased lines and ISDN; special interest services for defence, education and research institutes.
By Marsha Johnston
We refuse the idea of an impoverished universal service, Fillon said. If the obligation to provide universal service is to be split up among operators, said Jean-Marie Messier, chief executive of Compagnie Generale des Eaux SA, the parent company of mobile operator Societe Francaise de Radiocommunication, certain conditions must be met. The cost of providing universal service must be proven, not presumed. New entrants should not have to pay for a lack of productivity at the public operator. I don’t believe M Bon would want new entrants to have to pay for France Telecom to be one of the world’s largest companies, he said. The last reference was to Bon’s remark that the new law should provide France with an international champion. Lasserre noted that the majority of respondents insisted on complete transparency in the cost of network interconnection, and Fillon later acknowledged France Telecom’s obligation in that area. Speaking from experience, Messier went further. The cost of interconnection must be only the cost of using the network, not a subsidy for inequitable call rates. Interconnection charges for Societe Francaise represent one third of revenues and, for a long distance operator, could represent up to 50% of revenues. Such charges in France are up to 50% higher than in the US or UK. As for an independent regulator to ensure transparency for interconnection, Fillon said he will propose that the government set the rules of the game and award new licences, but that the regulator be created under conditions that assure its independence. The regulator will be charged with applying the rules, punishing infractions and negotiating where necessary, he said. Noting that British Telecommunications Plc still commands between 85% and 90% of the British market after 12 years of independent regulation, Pierre-Henri Drevon, managing director for BT France, stressed the need for a strong regulator, because the dominant operator can crush the competition.
Protect
I’ve heard lots of talk this morning about the need to protect France Telecom’s franchise, he said. We have enormous respect for France Telecom, but I am certain that it has absolutely no need to be protected. Au contraire. Lasserre noted that only one respondent, an investor, suggested merging the telecommunications regulator and France’s audio-visual regulator CSA. Rather, people wanted a clear separation between the economic regulation of telecommunications infrastructure and the ethical supervision of content, he said. Furthermore, he said respondents were split over whether the regulator should be established as a permanent fixture or gradually disappear, as market rules and competitor rights become entrenched. The respondents also demanded:- punctual, detailed notification of impending changes;- proof of the economic viability of operator applicants;- portability of terminals;- a clear means of comparing service offerings;- equal access to frequencies and efficient management of them; and – European-level standardisation.
