Brussels, 15 September 2005
The European Commission today endorsed the plans of French national telecoms regulator ARCEP to boost competition in fixed-line telephony markets. The Commission agrees that ARCEP’s regulatory approach to Internet telephony is an efficient way to encourage competition between internet carriers of telephone traffic and traditional telephone networks, but also calls upon it to monitor this part of the retail market closely for any anti-competitive practices and if necessary intervene to remedy them.
“I stand for an open, pro-competitive approach to internet telephony in all 25 EU Member States”, said Information Society and Media Commissioner Viviane Reding, adding “I note with satisfaction that national telecom regulators increasingly share this view. I’m confident that the approach chosen now by the French telecom regulator, together with the existing regulation on wholesale broadband access and given the level of retail broadband competition in France, will deliver the best results for French consumers and provide legal certainty for market players.”
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.
On 29 July 2005, ARCEP notified the Commission, as required by the EU regulatory framework for electronic communications, of a draft decision on the retail markets for national and international fixed-line telephony.
From an EU competition law perspective, voice telephony services provided over a broadband internet connection (referred to as “Voice over Broadband” or managed IP-telephony) are considered substitutes for traditional fixed-line public service telephone network (PSTN) telephony services.
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.
On the Article 7-procedure: MEMO/05/255.
 Autorité de Régulation des Communications Electroniques et des Postes” (“ARCEP”)